CI affirms FCRs of Egypt-based QNB Al Ahli with stable outlook
International credit rating agency, Capital Intelligence (CI), yesterday affirmed Egypt-based QNB Al Ahli’s long-term foreign currency rating (FCR) at ‘B-’ and short-term FCR at ‘B’, with a ‘stable’ outlook.
These ratings, which are constrained by the ratings assigned to the sovereign denote significant credit risk, as the bank’s capacity for timely fulfilment of financial obligations is very vulnerable to adverse changes in internal or external circumstances, CI said.
Notwithstanding the high sovereign credit risk, including Egypt’s weak balance of payments position and vulnerable exchange rate, QNB Al Ahli’s financial strength rating (FSR) is affirmed at ‘BBB-’.
The FSR is supported by sound loan asset quality, comfortable liquidity and an expanding customer deposit base, good capital adequacy, and robust profitability at both operating and net levels.
Although the operating environment remains challenging and credit risk high, QNB Al Ahli has maintained sound risk metrics thanks to adept balance sheet management, CI said, adding the FSR remains constrained by high concentration to Egyptian government securities and elevated sovereign risk, comparatively large borrower concentrations, and sustained rapid loan expansion over the past few years.
The outlook for the bank’s FSR is maintained at ‘stable’ and the support rating of ‘2’ (also affirmed) denotes a very high likelihood of support in case of need from the parent, QNB, as well as from the Central Bank of Egypt (CBE).
The bank’s sound liquidity was stable with key loan-based liquidity ratios moderately higher than local counterparts mainly due to the larger share of loans in total assets and, conversely, the moderately lower proportion of government securities.
As is the case with peer banks, the bulk of QNB Al Ahli’s liquidity is invested mostly in Egyptian treasury bills and bonds, the rating agency said.
While the liquidity of government bonds has reduced over the years due to heightened political and economic risk factors, treasury bills remain liquid instruments in the marketplace and may be repoed at the CBE.
MPHC net profit jumps 22% to QR489.7mn in first half
Mesaieed Petrochemical Holding Company (MPHC) has posted a half-yearly net profit of QR489.7mn, up 22% on the same period in 2015.
Qatar Petroleum, which is one of the region’s premier diversified petrochemical conglomerates with interests in the production of olefins, polyolefins, alpha olefins and chlor-alkali products, had registered an H1, 2015 net profit of QR402.8mn.
A statement issued by MPHC yesterday showed that its earnings per share (EPS) stood at Dh39 in H1 compared with Dh32 in the same period last year.
“The year-on-year increase was due to buoyant sales volumes and an increase in other income in the midst of a challenging market,” MPHC said.
The groups’ profit was also aided by the recognition of a tax refund of QR45mn during the period. The group continued to benefit from the supply of competitively priced ethane feedstock and fuel gas under long-term supply agreements. This contracting arrangement is an important value driver for the group’s profitability under volatile market conditions, the company said.
The closing cash position after the first six months of operations and after distribution of the previous year’s dividends of QR837.1mn during the period, was a robust QR700.7mn as on June 30, MPHC said.
The company’s total assets on June 30 amounted to QR13.9bn compared with QR14.3bn on December 31, 2015.
MPHC was incorporated as a Qatari joint stock company on May 29, 2013 with an agreed effective date for the transfer of Qatar Petroleum’s previous shareholding in the joint ventures of September 1, 2013.
MPHC is the holding company of Q-Chem, Q-Chem II, Ras Laffan Olefins Company and QVC.
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