Qatar National Bank’s second-quarter profit fell after it booked sharply higher loan loss provisions due to the global economic conditions, the Gulf’s biggest lender said on Sunday.
Fitch Ratings said last month that it expects Qatar’s non-hydrocarbon sector to contract by 5 percent this year and gross domestic product to shrink 3.8 percent.
QNB posted 2.84 billion riyals ($779.90 million) in net profit in the second quarter, down from 3.83 billion riyals a year earlier
The second-quarter figure was lower than EFG Hermes’ forecast of 3.316 billion riyals for QNB, which operates in more than 31 countries, including large operations in Turkey and Egypt
The bank increased its loan loss provisions in the second quarter to 1.5 billion riyals from 650.5 million a year earlier.
“Considering the global economic conditions, QNB Group opted to increase the loan loss provisions during the first half of 2020 by 1.2 billion riyals ($320 million) to protect the Group from any adverse shocks in the loan book,” the lender said.
“This affected overall profitability for the group.”
QNB, which serves more than 20 million customers, is 50 percent owned by Qatar’s sovereign wealth fund, the Qatar Investment Authority.
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