DOHA: The collective net profits of Qatari banks totalled more than QR16bn ($4.38bn) in 2012, up from QR14.98bn ($4.1bn) in 2011, but analysts said the figure could have been more impressive.
A slower growth in the non-hydrocarbons sector in the year was largely responsible for marginally lower profits of the banking sector, said stock and financial analyst, Bashir Yusuf Al Kahloot.
When told that the banks disappointed shareholders with lower dividend payouts for 2012, Al Kahloot asked tongue in cheek: “How can you expect them to announce handsome dividends when they have made lower profits?”
The last of the eight listed banks that announced their 2012 financials was alkhaliji that posted full-year net profits of QR512.2m, it said in a statement yesterday. The profits were up 5.2 percent over 2011.
The country’s largest lender, Qatar National Bank (QNB), maintained its lead with net profits amounting to QR8.33bn, accounting for half the profits of the entire sector put together. Commercial Bank of Qatar trailed with QR2.01bn in net profits.
The QNB declared a cash dividend of 60 percent (QR6 per share), while in 2011 it had announced a lower dividend of 40 percent, albeit that was coupled with 10 percent bonus shares.
The Commercial Bank of Qatar has declared QR6 per share as cash dividend, while Doha Bank announced 45 percent (QR4.5 per share) and QIB 37.5 percent.
Al Kahloot, obliquely referring to overseas expansion plans of several Qatari banks driven largely by what he hinted was a saturating local market, said that they were looking for other markets for more profits.
A prominent corporate figure, meanwhile, said Qatari banks would do better to create blocs within themselves and go for acquisitions and stake buys mainly in the European market.
“I don’t support individual banks going all alone looking for acquisitions and stake purchases overseas. They should create blocs within themselves and then go on a prowl looking for buyouts,” said Nasser Al Khaledy, CEO of Qatar-Oman Investment Company, which is listed on the Qatari bourse.
This is the right time to acquire or buy large stakes in banks in Europe since they are facing financial woes. “This step (overseas expansion by Qatari banks) should have been taken before,” said Al Khaledy.
He said the banking regulator, Qatar Central Bank, should have encouraged Qatari banks earlier to create blocs and venture into Europe for acquisitions and larger stake buys.
He said the idea of some banks to set foot in Arab Spring countries was erroneous because there were no legislations that would protect their investments. “I would personally prefer Europe where the legal frameworks are time-tested and very strong.”
Arab Spring nations also suffer from a severe lack of liquidity. Take the example of Pakistan and Syria. Some foreign Islamic banks set foot there and are now suffering, said the CEO.