Qatar National Bank (QNB) SAQ is turning its focus to Southeast Asia for growth after hitting expansion goals for Africa and the Middle East three years earlier than planned.
“We believe this region, the Middle East, Africa, Southeast Asia, gives us the best growth opportunity,” CEO Ali Al Kuwari said in an interview with Bloomberg TV at his office in Doha on Tuesday. “The business environment in Southeast Asia is great for us.”
While QNB isn’t actively pursuing a large acquisition at the moment, the Middle East’s biggest bank will make use of opportunities as long as they fit the lender’s strategy, he said. With operations across 30 countries, QNB is boosting its presence in India, Indonesia, Vietnam and Myanmar, and turning its Singapore operation into an Asian hub, adding staff there and introducing Islamic finance products. It also plans to open a branch in Riyadh, Saudi Arabia’s capital, this year.
QNB has almost doubled its assets to $198 billion over the past five years by increasing lending in its home market, and through acquisitions, buying 77.2 percent of Société Générale SA’s Egypt unit in 2012, about 20 percent of Togo-based pan-African lender Ecobank Transnational Inc. in 2014 and its $3-billion purchase of Turkey’s Finansbank AS last year. After reaching its ambitions of having operations in the Middle East and Africa before a 2017 goal, the lender’s plan will extend to Southeast Asia as its focal point until 2020, the CEO said. Al Kuwari, who has led the bank since July 2013, is presiding over an era of oil prices that have almost halved since mid-2014, and strains in two of its main markets, Egypt and Turkey.
“Looking at Egypt and Turkey, the banking systems have been resilient to any problems and issues,” Al Kuwari said. “There is a promising future for the banking systems in both countries. We have a long-term commitment.”
In Qatar an increase in oil prices of more than 20 percent over the past six months will add liquidity to the country’s financial system, the CEO said. There also haven’t been any signs of a slowdown in major projects, and companies and contractors are meeting their obligations, he said.
“What we promised our shareholders is 15-percent return on equity,” Al Kuwari said, referring to a key measure of profit for banks. “But for us we will do our best to maintain 20 percent. As we diversify to mature markets, this number becomes a challenge.”