| Qatar National Bank (Q.P.S.C.) | ||
| Rating reaffirmed at 'Crisil A1+' | ||
| Rating Action | ||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||
| 1 crore = 10 million | ||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its ‘Crisil A1+’ rating on the certificate of deposits programme of Qatar National Bank (Q.P.S.C.) - [QNB India - The Indian branch of Qatar National Bank] The rating is centrally based on the 'A+/Stable/A-1' issuer credit rating of S&P Global Ratings on QNB.
The issuer credit rating by S&P on QNB reflects the bank’s leading domestic banking franchise, its strong earnings capacity, high systemic importance in Qatar and the 50% ownership by the government of Qatar. These strengths are partially offset by the bank’s high dependence on external funding, risk arising from expansion (especially in Turkey and Egypt), however, the operating environment and economic outlook in these two countries are improving on the back of structural reforms and external support.
The rating on QNB India reflects its adequate capitalisation, backed by continued support from QNB. This strength is partially offset by a relatively smaller market share in the banking sector of India. |
Analytical Approach Crisil Ratings rating on QNB India is centrally based on S&P Global Ratings’ issuer credit rating of 'A+/Stable/A-1' on QNB. |
Key Rating Drivers & Detailed Description Strength:
capital position remains backed by strong support from QNB, as previously demonstrated through initial capital infusion of Rs 311.2 crore into the Indian branch, by the head office. This was almost double of the regulatory requirement at the time. In February 2024, the branch has further received Rs 165.9 crore as equity capital from head office. The buffer in capital adequacy metrics over the regulatory stipulation, is expected to remain adequate aided by timely capital infusion by the head office to meet the regulatory minimum and growth plans. Capital profile is expected to remain comfortable in near to medium term.
Weaknesses:
Earlier, in fiscal 2023, gross advances had declined by 25.9% to Rs 608 crore on March 31, 2023, owing to elevation in benchmark borrowing rates. However, portfolio growth restored eventually. Large part of the loan book remains deployed as working capital loans with strong focus on better rated corporates. The branch has an experienced management team with focus on maintaining adequate risk management systems for underwriting and monitoring of portfolio performance. As on December 31, 2024, the branch had nil NPAs and there were nil accounts in the SMA bucket as well.
Going forward, the ability to maintain sound asset quality and profitability while the portfolio scales, will be critical. |
Liquidity: Superior Liquidity is supported by positive cumulative mismatch in all the buckets up to one year, as per the asset liability management statement as on December 31, 2024. Liquidity is also backed by excess SLR investments of Rs 344 crore as on December 31, 2024. The branch has a Liquidity Coverage Ratio (LCR) of 221% on the same date.
As on December 31, 2024, the branch had a balance of Rs 111 crore as cash and cash equivalents. Furthermore, the branch has access to the liquidity adjustment facility of Reserve Bank of India (RBI) to raise borrowings. |
Rating sensitivity factors Downward factors:
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About the Bank Headquartered in Doha, QNB was established in 1964, as the country’s first Qatari-owned commercial bank. The Government of Qatar has a 50% stake in the bank via the Qatar Investment Authority. QNB is listed on the Qatar Stock Exchange. It is present in more than 28 countries across three continents through subsidiaries, branches, or representative offices. It is the largest bank in Qatar, Middle East, and Africa, by total assets, loans and deposits. The opening in India was in line with its goal to be a leading bank in the Middle East Africa, and Southeast Asia.
The bank had total assets and advances of USD 356.5 billion and USD 250.2 billion, respectively, as on December 31, 2024. |
About QNB India QNB received its India branch banking licence from RBI in October 2016 and commenced operations in 2017. It caters mainly to the banking requirements of corporates and financial institutions by leveraging its capital strength and vast network across more than 28 countries in three continents. QNB has international experience in transaction banking (including trade financing), treasury services, and funding, which could be leveraged domestically. Currently, it operates through its only branch in Mumbai. |
Key Financial Indicators
*Provisional |
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Criteria Details
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