(MENAFN- The Peninsula) By Satish Kanady / The Peninsula
QNB Group has made it clear that the ongoing stand-off in the region has not diluted its growth targets. 'Qatari economy is very strong, the banking system is solid. We have maintained our positions and are looking to our growth targets. QNB has not adjusted any of its strategies or aspirations, QNB Group CEO Ali Ahmed Al Kuwari said.
In a rare, free-wheeling interview, the Group CEO (pictured) told CNBC that the bank sees opportunities coming from the ongoing conflict. These opportunities will help reposition Qatar as a very good strong trading hub.
Currently, Qatar is sitting on huge reserves. Rated by AA- by S & P and AA by other rating agencies, the country's banking system is one of the best performing systems in the world. QNB believes that things are going to continue like this for some time and the bank is looking to operate on a standalone basis, going forward. 'It (the crisis) does not really affect our position, it does not affect our strategies, and it really does not affect our growth targets, the Group CEO said. Be it in terms of economy, financial system, Qatar is very resilient. The country already faced three month blockade unwaveringly. Yes, it lost some foreign deposits in between. Remember, Qatar is a country with QR170bn of foreign deposits in the system. Leaving QR20bn from this system is not a big deal. In a situation like blockade it will happen to anyone. But don't forget, Qatar is a ‘AA' rated country with ‘AA' rated banks .So, I don't see whatever the minor stress the country is facing, will continue, he said.
And eventually what's going to happen is even international investors and it's the international investors who will care about it the most will very soon start realizing this situation is not going to prolong and they would look at Qatar on a standalone basis. 'This is already happening; we are already seeing it. So we have not really seen this very much. Asked to what degree have QNB seen the withdrawal of deposits from the blockading countries customers, Al Kuwari said : ' Whatever has been withdrawn was in line with our expectations. But let me tell you replacement of two to three percent deposits is not a big deal….You know, this is a two way relationship. There is deposit coming from the blockaded countries into Qatar and vice versa. Also Qatar has investments and has placements with these economies. We have to say that for every dollar lost in one side that there is a dollar lost in the other side and I am saying it in a very conservative way, sometimes it's a dollar and a half, or two dollars from one side over another, because Qatar is not dependent on these countries. While you know some countries are dependent in certain trade flows with Qatar. On QNB's funding diversification strategy, the Group CEO said the idea is really to build multiple funding platforms as well as multiple profitability engine platforms. 'Our diversification strategy is paying off now because we are not exposed fully to any single economy and the Qatar brand is so powerful that we see clients across the borders increasingly reposing faith in QNB. On QCB's advise to local banks to tap international investors to raise capital rather than relying on government funding, Ali Ahmed Al Kuwari said it is already happening. QNB just completed its Formosa bond issuance under its Euro Medium Term Note (EMTN) programme in the Taiwanese capital markets. Under this programme, a $630m tranche was issued with a maturity of 30 years callable every 5 years, carrying an attractive fixed coupon rate of 5 percent per annum. It was one of the biggest issuance in the Taiwanese market.
'Crisis or not, it's an ongoing programme for us. A $17.5bn EMTN programme is already underway. We will do it in opportunistic places wherever we see a chances, in terms of appetite and the right price.
The QNB Group CEO said Qatar's construction works in the run up to the FIFA 2022 will continue as per the original project schedule, despite the siege. The siege is not going to affect the project works. The country made deft moves immediately after the blockade, and opened up alternative routes to bring in resources. Qatar's newly opened Hamad Port is one of the largest in the region. Hamad Port has already started direct shipping from India, China and Malaysia. The Port will soon start operating in its full-fledged capacity. The goods are going to reach the customers much cheaper rates and faster, he said.
On Trump's Presidency vs Qatar relations, Al Kuwari quipped: I'm not in the position to comment on President Trump but this is maybe an issue for the US to look at. And I think, we have to deal with any presidency system in the US We have a very strong relationship with all US banks, excellent relationship, and this relationship is continuing. We have very good support from all the US banks and again this is more for the US to talk about. As far as we are concerned, we're dealing with any presidency or any leadership in the US.
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