A view of QNB head office.
QNB, the largest financial institution in the Middle East and Africa (MEA) region, yesterday announced a net profit of QR3.3bn ($0.9bn) for the first quarter of 2021, a decrease of 7 percent compared the same period last year.
QNB achieved a stable Operating Income of QR6.7bn ($1.8bn) for the first quarter of 2021 in line with last year, despite the impact of COVID-19. This reflects QNB Group’s success in maintaining growth across the range of revenue sources. In addition, QNB Group decided to set aside a loan loss provision of QR1.4bn ($0.4bn) as a precautionary measure taking into account the longterm view of the financial impacts of COVID-19 pandemic. Following the successful milestone achievement of first banking institution in the region to achieve total assets of QR1 trillion in December 2020, QNB Group succeeded in increasing its total assets to QR1,042bn ($286bn), representing an increase of 8 percent from March 2020.
The increase in total assets was mainly driven by increase in Loans and Advances by 2 percent to reach QR721bn ($198bn). On the funding side, QNB diversified its customer deposits generation that helped increase our customer deposit base to QR750bn ($206bn), resulting in a healthy loan to deposit ratio of 96.1 percent complemented by conservative credit underwriting during the first quarter and more focus more on sustainable deposit generation. In addition, QNB Group continued its drive for cost rationalisation in addition to sustainable revenue generating sources. This helped QNB Group to improve the efficiency (cost to income) ratio to 23.4 percent, which is considered one of the best ratios among the large financial institutions in the MEA region.
Despite the ongoing impact of COVID-19 pandemic, the ratio of nonperforming loans to gross loans stood at 2.2 percent as at March 31, 2021, one of the lowest amongst financial institutions in the MEA region, reflecting the high quality of the Group’s loan book and the effective management of credit risk. The Group’s conservative policy in regard to provisioning for potential loan losses resulted in the coverage ratio increasing to 111 percent as at March 31, 2021.
Total equity increased by 5 percent to reach QR94bn ($26bn) as at March 31, 2021. Earnings per share for the three months ended March 31, 2021 reached QR0.33 ($0.09) compared to QR0.36 ($0.10) in March 2020. At March 31, 2021, QNB Group reported robust levels of capital measured in terms of the Capital Adequacy Ratio at 19 percent, higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee. QNB Group serves a customer base of approximately 20 million customers supported by 27,000 staff resources operating from 1,000 locations and more than 4,400 ATMs.
