June 14, 2017 / 3:40 PM / 5 months ago

UPDATE 1-Qatar National Bank sees no big deposit outflows

(Adds detail, context)

By Tom Arnold

DUBAI, June 14 (Reuters) - Qatar National Bank (QNB), the largest bank in the Middle East and Africa, has seen no significant outflows of deposits since a diplomatic rift started between Qatar and certain other Arab countries, it said on Wednesday.

Last week, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt decided to cut diplomatic ties with Qatar and impose stringent economic sanctions on the country, which threatened to suck deposits from its banks and curb foreign investment.

In an emailed response to questions, QNB said it had a “robust” liquidity position.

“There are no significant outflows of deposits and other funds ... except for business as usual rollovers and, or maturities,” QNB said.

The bank maintained a prudent capital adequacy ratio, “well in excess” of local regulatory and Basel III (international) requirements and continued to generate growth in profitability, it said.

QNB’s capital adequacy ratio stood at 15.7 percent at the end of March, compared to the minimum required by Qatar’s central bank of 14.8 percent.

“The group manages its liquidity very wisely and benefits from a diversified local and international funding base holding a global footprint across Europe, Asia, and MEA [Middle East, Africa], with a very minimal funding from the GCC markets,” QNB said.

Qatar National Bank gets 56 percent of its funding and 49 percent of its deposits from outside Qatar, according to Goldman Sachs.

Last week’s action by the Arab powers included the blacklisting of a number of entities and individuals with links to Qatar. The UAE central bank also urged banks in the UAE to act with caution in dealing with six Qatari banks, including QNB.

QNB, which is 50-percent owned by the Qatar Investment Authority, has a presence, either directly or through affiliates, in more than 30 markets including Egypt, Turkey, the UAE and several African countries.

The bank said it had not seen any impact on its overall group operations from its business in Egypt, the United Arab Emirates and Saudi Arabia.

The bank’s business in Egypt was fully independent from a funding perspective with no reliance on the group, it said.

In the UAE, it operates through Commercial Bank International, a 40 percent-owned affiliate, which it said had no direct business links to QNB. It said the contribution of CBI to QNB’s overall business was minimal.

QNB said its branch in Saudi Arabia was in a start-up phase. QNB last month inaugurated a branch in Riyadh offering retail and corporate banking services.

The bank also planned to apply for an investment banking licence in Saudi Arabia, QNB Group Chief Executive Officer Ali Ahmed al-Kuwari told reporters last month. (Reporting by Tom Arnold. Editing by Louise Heavens and Jane Merriman)

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