Qatar National Bank loses $3 billion in market value after Gulf rift

Shares of Qatar National Bank (QNB), the Gulf’s largest lender, were down as much as 5 percent on Tuesday midday trading following a move taken this morning by Saudi Arabia, UAE, Bahrain, and Egypt to sever ties with Doha.

The Doha-based bank has wiped about $3 billion off its market cap value in Monday session, SkyNews Arabia reported.

Saudi Arabia, Egypt, the United Arab Emirates, and Bahrain severed their ties with Qatar early Monday, accusing it of supporting terrorism and opening up the worst rift in years among some of the most powerful states in the Arab world.

Gulf Arab states and Egypt have already long resented Qatar’s support for Islamists, especially the Muslim Brotherhood which they regard as a dangerous political enemy.

Credit rating agency Moody’s Investors Service is concerned that the rift between Qatar and other regional states could have an impact on Qatar’s credit outlook, if trade and capital flows are disrupted, a senior Moody’s analyst has told Reuters later on Monday.

“There’s a high degree of uncertainty. There’s not much clarity on what could resolve this spat between Qatar and other GCC countries,” Mathias Angonin said in Dubai.

“The last tension ended with no credit implications,” he said, referring to a row when Saudi Arabia, the United Arab Emirates and Bahrain withdrew their ambassadors from Qatar in March 2014.

“But this time around blocking sea, air and land (routes) shows a credit-negative escalation. And we’re concerned that could have a credit impact if it disrupts trade and capital flows.”

Moody’s downgraded in late May Qatar’s credit rating by one notch to Aa3 from Aa2 with a stable outlook, citing increasing external debt and uncertainty over the sustainability of the country’s growth model over the next few years.