QNB, the country’s largest lender, is eyeing as much as 40% of its net profit from overseas operations by 2017 as it has embarked on an effective strategy, which include ramping up international asset management fund offering across selected markets and strengthening fund distribution capabilities in Europe, Asia and Africa.
“In 2015, international growth contributed 31% to net profit, having grown from 28% in 2014. By 2017, this contribution is expected to reach 40%,” Finance Minister and QNB chairman HE Ali Shareef al-Emadi told shareholders at the annual general assembly, which ratified all items on its agenda, including a cash dividend of 35% of the nominal share value (QR3.5 per share) and bonus shares of 20% of the share capital (two shares for every 10 held).
The increasing geographic diversification of QNB, whose presence through subsidiaries and associate companies extend to 27 countries across three continents, not only assists in its bottom line but also positively contributes to lowering the inherent risk and volatility of its business, he said.
Driven by the dual considerations of on-going domestic and international expansion along with the continuing adoption of a prudent approach to risk management, QNB had reaffirmed its status as the leading financial institution in the Middle East and Africa (MEA) region.
Providing an overview of the bank’s business plans for 2016, al-Emadi said retaining its leading position through diversifying income sources and expanding the range of activities across the QNB group was of primary focus. “The ability to meet shareholders’ expectations remained a core consideration for 2016,” he said.
QNB Group chief executive Ali Ahmed al-Kuwari said beyond Qatar, it captured extensive business opportunities flowing both into and out of Qatar and the broader Middle East, Africa and South East Asia regions. On its 2017 plans to accelerate international growth, the bank said it will continue to expand business origination centers, ramp up its international asset management fund offering selected markets and enhance it risk appetite to support growth in new geographies and segments/sectors.
“We will continue to capture opportunities for sustainable growth. This means both in the products and service offering to our customers, and in the expansion into new geographic territories. We cannot stand still in a market that is constantly evolving and highly competitive,” said QNB, which has reported a net profit of QR11.3bn in 2015.
Moreover, the bank will also continue to expand structured finance capabilities across regional hubs, deepen its relationships with its strategic partners across MEA and augment the QNB First International offering through additional value-added services.
Although recent macroeconomic headwinds present challenges to the banking industry, QNB said the MEA and South East Asia continue to be focal points for global growth with these regions requiring trade and investment flows to support the foundations for socio-economic development such as infrastructure, including transport, real estate, power telecoms, healthcare, education and tourism.
“By strategically positioning our business in these key growth corridors, we are securing our vision to become a MEA icon,” QNB said, adding “we have formulated an effective strategy to leverage our operating environment and secure sustainable value.”
In the domestic market, QNB said it is planning to “significantly” grow market share and profitability in the private commercial sector by 2017 by increasing transaction banking’s share within Qatar and enhance specific small and medium enterprises value proposition.
The bank will also develop innovative services across the consumer banking multichannel mix and deepen product offering for high net worth and ultra-high net worth customers.