HSBC Upgrades Qatar National Bank To ‘Overweight’

Qatar National Bank’s (QNB) lending momentum will remain positive as preference by the government will help the regional lender gain market share in public sector financing, HSBC said and upgraded the bank to “overweight” from “neutral.”

The brokerage said it expects QNB – Qatar’s largest lender by market value – to increase its market share to 51 percent in 2013 from 49 percent in 2011.

Lending in the country is largely driven by the government.

QNB’s talks to refinance $1.85 billion worth of Qatari loans from European banks, due to mature in July 2012, can improve the bank’s credit growth, HSBC wrote in a note.

“Another catalyst could be the announcement of a significant increase in public sector spending in the Qatari budget, due in June,” the brokerage said.

HSBC also downgraded Commercial Bank of Qatar to “neutral” from “overweight” and said it expects the bank’s 2013 market share to remain at 2011 level of 10 percent and its net interest margin to decline.

The brokerage raised its price target on QNB’s stock to 165 riyals from 150 riyals, and cut its target on Commercial Bank’s shares by 20 riyals to 80 riyals.

Shares of QNB closed at 133.50 riyals and those of CBQ closed at 71.50 riyals on Monday on the Qatar Stock Exchange, Reuters reported.