(MENAFN- The Peninsula) By Satish Kanady I The Peninsula
DOHA: Supported by strong balance sheet growth along with stable NIM (net interest margin), Qatari banks are expected to lead to strong net interest income growth in Q1, 2018. The combined net profits of top 21 banks in the GCC region, including four from Qatar, are estimated to grow by 15 percent for the first quarter of 2018, on quarter-on-quarter, SICO Investment Bank noted in its quarterly results preview yesterday.
The Saudi banks will continue to report weak balance sheet performance, however will benefit from NIM expansion. UAE banks would report strong net interest income growth, along with higher operating expenses.
Bahrain Banks earnings growth is expected to be driven by retail lending and higher fee.
Among the Qatari banks, QNB's first quarter earnings are estimated to grow by 10 percent year-on-year. The growth is to come from robust balance sheet expansion. Commercial Bank's earnings are projected to grow by 11 percent on Y-o-Y. Healthy balance sheet growth and lower provisioning is expected to revive Commercial Bank's earnings. The earnings of Doha Bank and QIB are also projected to grow for the first quarter.
The earnings of Industries Qatar are estimated to grow by 7 percent on year-on-year. Ooredoo is estimated to jump 34.6 percent on quarter-on-quarter basis. While higher product prices are expected to positively impact Industries Qatar's earnings on year-on-year, Ooredoo's quarter-on-quarter improvement is expected to drive mainly by strong Myanmar Kyat.
The SICO covered a total of 76 top listed companies in the region, including six from Qatar. Its GCC coverage universe's aggregate 1Q18 earnings are expected to increase 3 percent year-on-year and 12 percent quarter-on-quarters led by petrochemicals.
The combined revenue of the 21 top banks in the region, including four from Qatar is estimated to grow by 15 percent on quarter-on-quarter and 2 percent on year-on-year. On an aggregate level, SICO analysts forecast petrochemical companies' earnings to increase 10 percent year-on-year led by higher product prices. Average petrochemical product prices for a basket of major products gained 8 percent year-on-year and 5 percent quarter-on-quarters during 1Q18. The net income of GCC's petrochemical companies is projected to grow by 36 percent on quarter-on-quarter.
GCC's real estate and construction companies' net income is expected to grow by 20 percent on quarter-on-quarter and estimated to slip by 2 percent on year-on-year.
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