By Santhosh V Perumal/Business Reporter
QNB, which is present in 24 countries and aims to be a dominant player in other markets, is contemplating “sizeable” acquisitions to achieve scale as part of its comprehensive to become a Middle East and Africa (MEA) icon by 2017.
It is planning to roll out QNB First, a priority banking service where members need to maintain an average daily balance of QR350,000 or more (or equivalent in other currencies) or have a monthly salary of QR35,000 or more, in “select” countries.
Preparations are on in full swing for the launch of QNB First in the UK. France, Kuwait, Lebanon and Oman.
“The bank began implementing its strategy into 2017 that aims to transform QNB Group into a MEA icon,” its chairman and Finance Minister HE Yousef Hussein Kamal told the ordinary general assembly where shareholders approved the 60% cash dividend and net profit of QR8.3bn in 2012.
The three pillars of the strategy are aimed at maintaining dominant position in the domestic market, developing and growing the ongoing high return on equity and “refocusing” international expansion.
The bank — with assets of QR367bn in 2012 — is planning to invest in new markets, strengthen presence in existing markets and “cross-pollinate” products and services across network.
Refocusing its global expansion; QNB aims to build its brand in MEA by increasing share and profitability in existing key markets and “achieve scale by pursuing sizeable acquisitions.”
QNB in 2012 entered into an agreement with Societe General Bank to buy the entire 77.17% stake in the Egyptian unit NSGB.
“The process of obtaining regulatory approvals is currently underway and it is expected to be completed by the first half of this year,” Kamal said.
Terming the transaction to be the largest acquisition in the QNB Group’s history, its CEO Ali Shareef al-Emadi said “it is a significant step towards fulfilling its long-term objective of expanding its presence in the Middle East and North Africa region.”
About QNB First, which comes under retail, the bank said it is prepared for the launch in the five overseas locations with cross-selling of its exclusive products and services to key corporate clients in these markets.
“Overseas presence is expected to fuel new growth opportunities, enabling QNB First to continue enhancing its brand propositions domestically and abroad, in response to customer demands in new markets,” it said.
During 2012, QNB First physical footprint grew from 4 to 12 dedicated sites, including the opening of a premier flagship QNB First branch on Airport Road.
It also expanded its wealth management product suite to encompass retirement and education savings plans, “a segment it will continue to focus on and broaden in 2013.”
QNB First increased its lifestyle partnerships from 6 to 48 in 2012 and secured representation from a wide range of exclusive product and service providers offering unique privileges and upgrades, including world-class hotels, restaurants, airlines and boutiques.
On the domestic front, the bank’s line of strategy for the corporate segment has been to expand offering to new and growing segments (mid-sized corporates as well as small and medium enterprises); while on asset and wealth management, it sought to strengthen onshore private banking and in the retail side, it plans to expand distribution network through branches and ATMs.
In order to enhance return on equities, the bank plans to grow investment banking arms, enhance financial institutions offerings and maintain leading position in structured finance for the corporate sector.
The bank said it would continue to launch innovative asset management funds and expand its brokerage arm QNB Financial Services and on the retail side, it aims at increasing product penetration.
US Fed hold rates low, keps stimulus after economy ‘paused’
The Federal Reserve left its ultra-loose monetary policy unchanged yestgerday, saying the US economy had “paused” in recent months largely due to transitory issues.
The Fed kept its record-low key interest rate between zero and 0.25% , as expected, to push down long-term interest rates to boost the economy.
“Growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors,” the Federal Open Market Committee, wrapping up a two-day meeting, said in a statement.
The FOMC noted that job growth was rising at a “moderate” pace but the unemployment rate “remains elevated.”
It said it would continue its $85bn a month bond and mortgage security purchases to support a stronger economic recovery.
The easy monetary policy “will remain appropriate for a considerable time after the asset purchase programme ends and the economic recovery strengthens,” it the panel said.
The announcement came the same day as the government estimated the economy contracted for the first time since 2009 in the fourth quarter of last year.
Describing the nation’s job market as continuing its modest pace of improvement, the Fed repeated a pledge to keep purchasing securities until the outlook for employment improves substantially.
It added business investment had picked up as financial conditions eased in recent months.
The Fed’s bond-buying programme is part of the central bank’s unprecedented efforts to spark a stronger economic recovery and drive down unemployment.
The Fed has kept overnight interest rates near zero since late 2008 and it has tripled its balance sheet to about $3tn through its purchases of securities, which are aimed at pushing longer-term borrowing costs lower.
