Qatar’s top bank Q2 profit slides over virus

Qatar National Bank is the largest lender in the Middle East. (File/AFP)
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Updated 12 July 2020

Qatar’s top bank Q2 profit slides over virus

  • QNB net profit in the 2nd quarter plunged 25.8%

DOHA: Qatar National Bank, the largest lender in the Middle East, said Sunday its net profits for the second quarter sank over the impact of the coronavirus pandemic.
QNB net profit in the second quarter plunged 25.8 percent to 2.84 billion riyals ($780 million) compared to $1.05 billion in the same period a year ago, the bank said in a statement.
The first quarter net profit of QNB, which has operations in 31 countries including Turkey, Indonesia and India, dropped only slightly.
Its net income in the first six months of the year also dipped 13.6 percent to $1.76 billion from $2.04 billion a year ago, it said.
The bank said it increased the loan loss provisions by $320 million in the first half to safeguard itself from any adverse shocks from the pandemic, thus affecting its profitability.
Total assets rose 10 percent to $267 billion on June 30, making it the largest lender in the Middle East and North Africa in terms of assets.


Turkey on brink of recession as economy collapses

Updated 13 August 2020

Turkey on brink of recession as economy collapses

  • Consumer debt has increased by 25 percent to more than $100 billion in the past three months

JEDDAH: President Recep Tayyip Erdogan’s popularity is plunging in lockstep with Turkey’s collapsing economy and the country is on the verge of a potentially devastating recession, financial experts have told Arab News.
The value of the Turkish lira has fallen to 7.30 against the US dollar and the central bank has spent $65 billion to prop up the currency, according to the US investment bank Goldman Sachs.
Consumer debt has increased by 25 percent to more than $100 billion in the past three months as the government moved to help families during the coronavirus pandemic, but the result has been a surge in inflation to 12 percent.
With the falling lira and increased price of imported goods, the living standards of many Turks who earn in lira but have dollar debts have fallen sharply.
The economy is expected to shrink by about 4 percent this year. The official unemployment rate remains at 12.8 percent because layoffs are banned, although many experts say the real figures are far higher.
To complete the perfect storm, tourism revenues and exports have been decimated by the pandemic, and foreign capital has fled amid fears over economic trends and the independence of the central bank.
Wolfango Piccoli, of Teneo Intelligence in London, said logic dictated an increase in interest rates but “this is unlikely to happen.”
Piccoli said central bank officials would strive to avoid an outright rate hike at their monetary policy meeting on Aug. 20. “A mix of controlled devaluation and backdoor policies, such as limiting Turkish lira’s liquidity, remains their preferred approach,” he said.
There is speculation of snap elections, and Erdogan’s view is that higher interest rates cause inflation, despite considerable economic evidence to the contrary.