The net profits of Qatar’s listed companies amounted to QR38.57bn for the year 2019. The combined profit of 46 listed companies, of the total 47, is down by 5.53 percent compared to the previous year. Baladna’s financial disclosures will coincide with its Q1, 2020 announcements.
Banks and Financial Institutions reported QR24bn net profit, up 6.50 percent, compared to QR22.85bn posted in 2018. Reporting a record 20.74 percent year-on-year surge in its profits, Commercial Bank led the pack. Banking major QNB reported 4.08 percent growth in its net profit, compared to the previous year. While QIB recorded a 10.89 percent year-on-year growth, Maraf Al Rayan’s net profit grew by 2.27 percent.
The net profits of Services and Consumer Goods sector fell by 10.36 percent on year-on-year, as the profits of Industry sector plunged a huge 32.86 percent. The combined net profit of the sector fell to QR6bn from QR9bn reported in 2018. Industries Qatar’s profit shrank by a huge 48.81 percent to QR2.5bn from the previous year’s QR5bn.
The Insurance sector also took a beating declining by 46.26 percent. The combined profits of insurance companies stood at QR333m in 2019, down from QR620m.
The net profits of real estate sector also fell drastically by 20.86 percent to QR2.27bn, from QR2.86bn.
Telecom sector witnessed a significant 11.03 percent growth in the profit, with Ooredoo reporting 10.21 percent growth and Vodafone’s profit rising by 21.98 percent. In 2019, the transportation sector’s net profit increased by 10percent to QR1.79bn.
Analysts are bit cautious on the GCC banking sector performance in their near term outlook.
“The banking sector witnessed two significant events during Q1- 2020 that could lower asset quality in the near term and put pressure on margins. First, the COVID-19 pandemic that has lowered credit offtake across the board as entire countries go into lockdown. Regulators are also instructing banks to implement measures like rescheduling loans, deferrals of loan installments for as long as next six months and not to charge profits on credit card payment delays during this period. These measures could affect profitability and the quality of loan portfolio in the near term,” analysts at Kamco Invest noted.
Some of these concerns are well reflected in the performance of banking stocks across the GCC exchanges, they said. Secondly, the lowering of interest rates during Q1-2020 is expected to affect banking NIMs in the near-term. Noninterest income is also likely to be affected due to the decline in overall business activity in the region.
Moreover, specific pockets of businesses like the real estate sector is experiencing lower pricing and increased supplies. This puts pressure on the asset quality of loans given to real estate borrowers.
