Middle Eastern bank plans SE Asia expansion
(7 February 2017 – Asia) Qatar National Bank, the biggest bank in the Middle East and Africa, is turning its focus to South-East Asia for growth after hitting expansion goals in the region earlier than planned.
“Our previous target to become a Middle East and Africa icon by 2017, was achieved in 2014, so we have upscaled our aspiration to become a Middle East, South-East Asia and Africa bank,” chief executive officer Ali Al Kuwari said in an interview with Bloomberg TV at his office in Doha.
“The business environment in South-East Asia is great for us.”
QNB is turning its Singapore operation into an Asian hub, adding staff and introducing Islamic finance products, along with boosting its presence in India, Indonesia, Vietnam and Myanmar.
While the bank isn’t actively pursuing a large acquisition at the moment, it will make use of opportunities as long as they fit the lender’s strategy, Al Kuwari said.
QNB has almost doubled its assets to US$198bil over the past five years by increasing lending in its home market, and through spending about US$6bil on acquisitions in countries including Egypt and Turkey, according to data compiled by Bloomberg.
It bought Societe Generale’s Egypt unit in 2013 for US$2.45 billion, about 20 percent of Togo-based pan-African lender Ecobank Transnational Inc in 2014 and spent US$3 billion on the purchase of Turkey’s Finansbank in 2016. That helped the bank expand to cover 30 countries across the region.
As the bank expands into more mature markets, its return on equity will come under pressure, Al Kuwari said. Return on equity was over 20 percent last year, beating global peers including JPMorgan Chase & Co, Citigroup, and HSBC.
Profit rose 10 percent last year to US$3.3 billion the bank reported last month. “What we promised our shareholders is 15 percent return on equity – still this is excellent and a dream for many banks to achieve,” Al Kuwari said.
“But for us, we will do our best to maintain 20 percent. As we diversify to mature markets, this number becomes a challenge.”
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