Fitch affirms Qatar National Bank at 'A+'; outlook stable

QNB's IDRs are support-driven, reflecting Qatar's strong credit fundamentals and the very high probability of external support available to the bank in case of need.

Fitch's view of support is based on QNB's majority state ownership, systemic importance as Qatar's largest lender/deposit taker and the authorities' recent support measures.

The bank's Individual Rating reflects QNB's growing and more diversified operations, 40% market share and solid financial track record. The rating also considers the risks of a weaker operating environment in Qatar and QNB's large concentrations in both loans and deposits.

As part of Qatar's banking support package, the State purchased proportion of QNB's local equities book and real estate loans, which has helped to shore up the bank's liquidity and asset quality. QNB received cash and bonds for the transaction, and was one of the main beneficiaries of the support due to its size and exposure to Qatar.

The bank's H109 results are satisfactory and show strong core earnings, good capitalisation (Tier 1 ratio of 13%), healthy liquidity and a still low NPL ratio (0.9%). Nevertheless, Fitch warns that rising retail and SME defaults could still exert negative pressure on future profitability.

QNB is, by far, the largest bank in Qatar in terms of assets and by most financial indicators. Listed on the Qatar Exchange, QNB is 50% owned by the Qatar Investment Authority, Qatar's sovereign wealth fund.

QNB is the primary banker to the government/public sector and also enjoys a leading retail and corporate franchise. QNB has extensive international operations from its stakes in Ansbacher Banking Group, UK (100%) Housing Bank for Trade and Finance, Jordan (34%), Tunisian-Qatari Bank, Tunisia (50%), Mansour Bank, Iraq (23%), Commercial Bank International, UAE (24%) and QNB Syria (49%). QNB also has branches in London, Paris, Singapore, Yemen, Oman and Kuwait and representative offices in Iran and Libya.

In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs.