Mashreq Qatar eyes 40 pct surge in 2011 revenue

Mashreq Qatar eyes 40 pct surge in 2011 revenue

Mashreq Qatar sees 2011 rev $96.2 mln vs $68.2 mln yr-ago; 2012 revenue seen above 400 mln riyals; Bank short-listed for three Qatar bond issuances; Sees deposit growth of 50 percent in 12 months

June 13, 2011 3:47 by p.deleon

Mashreq Qatar, the Doha-based arm of Mashreq Bank , expects 2011 revenue to rise more than 40 percent to 350 million riyals ($96.20 million) backed by its treasury operations and strong deposit growth.
Capital markets and treasury are becoming an increasing contributor to Mashreq Qatar’s business, despite the slowdown in bond issuance in the region following the political turmoil, Howard Kitson, country head of Mashreq Qatar, said in an interview.
“Towards the end of the year we will see an increased appetite for corporate bond issuance as the region calms down,” he said. “We’re short-listed for at least three issuances (out of Qatar) in the next 12 months.”
Kitson said the bank is targeting 2012 revenue of over 400 million riyals. Mashreq Qatar posted 2010 revenue of 248 million Qatari riyals ($68.17 million).
Qatar’s economy should also benefit from a FIFA-induced boom with the bank estimating that the private sector will see around $120 billion worth of new contracts amid a frenzy to upgrade its infrastructure in time for the World Cup.
Mashreq Qatar expects to benefit from the boost as an influx of professionals and contractors will lift deposit growth as well as attract new financing business.
“We’re looking to increase (deposits) over the next twelve months by at least 50 percent,” Kitson said.
The bank currently holds deposits of 2.1 billion riyals. Retail banking makes up a significant portion of its 6 billion riyals in assets and liabilities and Mashreq Qatar is looking to grow that significantly as the economy grows, he said.
But Kitson added there are challenges with the Qatar central bank’s directive in April to cap personal loan rates to 6.5 percent and credit card rates at 12 percent. Personal lending rates hovered around 9 percent and credit card rates can range from 18 percent to 28 percent.
“We might face some difficulties with the types of margins being imposed,” he said. “We might need to be more cautious around the types of services we roll out.” (Reporting by Shaheen Pasha; Editing by Dinesh Nair)