DOHA • 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.
QNB, as the bank is known, 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, and opening its first branch in Saudi Arabia this year.
"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 Ali Al Kuwari said in an interview with Bloomberg TV on Tuesday. "The business environment in South-east Asia is great for us."
While the bank is not actively pursuing a large acquisition at the moment, it will make use of opportunities as long as they fit the lender's strategy, he added.
QNB has almost doubled its assets to US$198 billion (S$281 billion) over the past five years by increasing lending in its home market, and through spending about US$6 billion on acquisitions, according to data compiled by Bloomberg.
Mr Al Kuwari, who has led the bank since July 2013, is presiding over an era in which oil prices have almost halved since mid-2014.
In Qatar, a rise in oil prices of more than 20 per cent over the past six months will add liquidity to the country's financial system, the CEO said. There are no signs of a slowdown in major projects, and companies and contractors are meeting their obligations.
As QNB expands into more mature markets, the bank's return on equity, a key measure of profitability, will come under pressure, he noted. Return on equity was more than 20 per cent last year, beating global peers including JPMorgan Chase and HSBC Holdings.
Profit rose 10 per cent last year to 12.4 billion riyals (S$4.8 billion), meeting analyst estimates, even as oil prices slumped and economic growth in Qatar fell to its slowest since 1995, the bank reported last month.
"What we promised our shareholders is 15 per cent return on equity - still this is excellent and a dream for many banks to achieve," Mr Al Kuwari said. "But for us, we will do our best to maintain 20 per cent."