Qatar National Bank – Ratings Affirmed with a Stable Outlook

(MENAFN- Capital Intelligence Ltd) 18 March 2026

Capital Intelligence Ratings (CI Ratings or CI) has today announced that it has affirmed the Long-Term Foreign Currency Rating (LT FCR) and Short-Term Foreign Currency Rating (ST FCR) of Qatar National Bank Q.P.S.C. (QNB or the Bank) at ‘AA’ and ‘A1+’, respectively. At the same time, CI Ratings has affirmed QNB’s Bank Standalone Rating (BSR) of ‘a-’, Core Financial Strength (CFS) rating of ‘a-’ and Extraordinary Support Level (ESL) of Very High. The Outlook for all ratings remains Stable.

The Bank’s LT FCR is set four notches above the BSR and at the same level as the sovereign to reflect the very high likelihood of extraordinary support from the government in case of need. This is based on the government’s strong track record of support for Qatari banks in general and for QNB in particular. At different points in time, such support for the sector has included the transfer of ‘difficult investments’ to the state, the transfer of real estate loans, and the injection of additional equity. The government’s financial capacity to support the Bank is also considered to be very strong given Qatar’s sovereign ratings (‘AA’/‘A1+’/Stable). In addition, given QNB’s position as the largest bank in the system with approximately half of sector assets and with the government as major shareholder, and its ‘national bank’ status, the probability of government support in the event of need is considered to be very high.

QNB’s BSR is based on a CFS rating of ‘a-’ and an Operating Environment Risk Anchor (OPERA) of ‘bbb’. The OPERA reflects Qatar’s very strong external balances, including very high current account surpluses as well as strong foreign exchange reserves and significantly declining external debt. It also takes into account the substantial volume of state assets under Qatar Investment Authority management and Qatar’s very large hydrocarbon reserves. The CFS is supported by QNB’s very strong domestic banking franchise in the government and corporate segments, still good asset quality with robust credit loss absorption capacity, solid and resilient profitability, and strong capitalisation. These strengths are counterbalanced to some degree by the limited size of the Qatari banking market; this restricts scope for domestic asset growth given the Bank’s already dominant position, as well as giving rise to some loan concentrations; these and some concentration in terms of customer deposits are also a credit challenge. Other credit challenges include regional geopolitical risk, some limited reliance on foreign sources of both capital markets and deposit funding at the parent level, and the sub-investment grade country risk and foreign exchange exposure arising from key overseas operations – although the latter are self-funding with the FX risk limited to the OCI impact of FX movements on the capital invested by the parent.

QNB’s asset quality is still considered to be good overall; Stage 2 exposures are low, while the quality of the securities portfolio is also very good. Credit loss absorption capacity remains strong. While the operating environments in all regional markets have been impacted to some degree, the severity and nature of these impacts will vary depending on geographical location, the pre-conflict economic conditions within each market and the ability of governments to provide assistance if needed. For banking sectors, the area where assistance might first be needed is funding and liquidity – as this area is the one where sudden impacts to confidence are most likely.

QNB’s profitability is solid and earnings quality is good, with the Bank posting consistent results. Profitability is a little below the sector average, but close to the sector median. Profitability is supported by its rising and best-in-sector net interest margin, while the Bank has continued to be able to post efficiency gains. The cost-to-income ratio had been on a declining trend, but there was a small uptick to a still very good 23.6% in 2025.

The Bank has a good liquidity and funding profile, supported by a stable and diversified customer deposit base. There, however, remains a degree of dependence on foreign-source funding at the parent level, albeit this is mostly in the form of medium-term money from debt capital markets. Funding and liquidity metrics have been stable and consistent in recent periods. Liquidity risk is considered low due to diversification of funding by provider, geography, instrument, and by the ability to turn to the government in extremis. All foreign subsidiaries are self-funding.

QNB is well-capitalised with strong CAR and Tier 1 capital ratios, despite an ongoing capital buy-back programme. The record on internal capital generation has been good, as is the current level of balance sheet leverage. With still good asset quality and more than full loan-loss reserve coverage, capital is seen as being unlikely to be impaired by unprovided NPLs in the future, especially as strong operating profitability would allow annual provisioning to the stepped up significantly. One change that took place last year was the application of the OECD minimum 15% corporate tax rate. This impacted both ROAA and internal capital generation – although both ratios remained strong.

Rating Outlook

The Outlook for the LT FCR and BSR is Stable. This indicates that CI does not consider a change in either rating likely in the next 12 months.

Rating Dynamics: Upside Scenario

An upgrade over the next 12 months appears remote at this stage since this would require an upgrade of the sovereign ratings or outlook – something that is unlikely given its current very high level.

Rating Dynamics: Downside Scenario

A downgrade of the Bank’s LT FCR would require a significant deterioration of its standalone strength or a downgrade of the sovereign. Given that the ratings for QNB are so closely tied to those of the sovereign, the most likely downside risk for QNB’s LT FCR is related to potential downward changes in the ratings or outlook assigned to the sovereign. A lowering of the Bank’s BSR appears unlikely in the short term, as this would require an unexpected and very significant weakening of key financial metrics.

Contact

Primary Analyst: Rory Keelan, Senior Credit Analyst; E-mail: ...
Secondary Analyst: Darren Stubing, Senior Credit Analyst, E-mail: ...
Committee Chairperson: Morris Helal, Senior Credit Analyst

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