Qatar National Bank QPSC Q4 2019 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Edmond Christou - Bloomberg Intelligence - Analyst : Edmond Christou from Bloomberg Intelligence. This is my first time on the call, and most of my question has been answered. I just have a question that maybe it's simple. I just want to understand the size of the investment portfolio outside the domestic market. It's almost half -- 50% of your without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JANUARY 16, 2020 / 9:30AM, QNBK.QA - Q4 2019 Qatar National Bank QPSC Earnings Call investment portfolio is invested outside the GCC. I believe when I look at the number and I catch the number, you generate good yield on this investment or investment return on this portfolio. Are you expecting this to come under pressure this year? That's one thing. The other thing is, what is the comfortable LDR ratio you will be operating on for the year? And also, with -- when I look at your split of sector I see decline in the government, you mentioned in the last call, there have been no repayments. Is this the only reason for that thing? And the other thing, as you see more growth coming from the private sector, has this to do with any changes in the business mix? Should we expect cost of risk in the domestic market to change in the long term? I mean if I look at your 10-year average cost of risk, we're around 43 basis points. Now we are around 48. So what's trajectory, going forward, to the change in the business mix? And my last question will be strong capital generation in Q4 compared to Q3, even if I adjust for dividend, just a question here is, what's driving it apart from earnings? And the last question is on FSR. You are at 104 now, and I believe most of the credit growth...

Question: Edmond Christou - Bloomberg Intelligence - Analyst : Sorry, I'm not a journalist. I'm part of Bloomberg Intelligence, the research arm of Bloomberg. So I start covering the stocks, and I'm asking question to update my model and be able to...

Question: Edmond Christou - Bloomberg Intelligence - Analyst : That's it.

Question: Ribal Hachem - Arqaam Capital Research Offshore S.A.L. - Analyst : So I have a couple of questions. Could you throw some color on why the fees from lending activities have actually dropped in 2019 despite strong volumes? It would also be helpful if you can talk a little bit about sector growth dynamics in 2020. I mean the government sector has declined in 2019 on both sides of the balance sheet. Third question, given the strong loan growth in the system and the [HCG] levels close to 125%, are you seeing any pressure on NIM coming from liquidity, despite lower-rate environment? And the last question, if you can please repeat the guidance for Finansbank and QNBA for 2020? Because I missed it.

Question: Ribal Hachem - Arqaam Capital Research Offshore S.A.L. - Analyst : No. That would be it. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JANUARY 16, 2020 / 9:30AM, QNBK.QA - Q4 2019 Qatar National Bank QPSC Earnings Call

Question: Aybek Islamov - HSBC, Research Division - Analyst : So I would say, a couple of questions from me. Well, firstly, I'm wondering why you did not offer a higher dividend per share based on 2019 results. The reason why I say that is because the capital generation is quite good. Your book value growth is quite impressive and partly because you didn't have this currency devaluation losses in Turkey? So that's my first question. Second question, I wanted to ask you about the Stage 2 loan ratios, which seem to be deteriorating sequentially, again, in Q4. Where that deterioration is coming from and what are the implications for nonperforming assets? I think that's pretty much it, yes.

Question: Aybek Islamov - HSBC, Research Division - Analyst : Okay. Understood. That's very helpful. And you mentioned that on cost of risk, you gave some color there in 2020, despite the push in the private sector lending, you expect cost of risk to be more or less at the same level as 2019. But longer term, you see a gradual increase, you mentioned, right? What sort of level do you see for the cost of risk? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JANUARY 16, 2020 / 9:30AM, QNBK.QA - Q4 2019 Qatar National Bank QPSC Earnings Call

Question: Aybek Islamov - HSBC, Research Division - Analyst : Understood. So to clarify my view, the fact that you're focusing more on private sector loans within Qatar, yes, it does not mean that your cost of risk level will change dramatically, right? It will -- it should not affect your cost of risk. Is that correct, my understanding?