DOHA: QNB Group, the largest financial institution in the Middle East and Africa (MEA) region, recorded a net profit of QR7.1bn ($1.9bn) for the first half of 2018, reflecting a 7 percent growth compared to last year.
Driven by loans and advances, the QNB’s total assets increased by 10 percent from June 2017 to reach QR846bn ($232bn), the highest ever achieved by the Group.
The loans and advances grew by 9 percent to reach QR604bn ($166bn). This was mainly funded by customer deposits which increased by 9 percent to reach QR614bn ($169bn) from June 2017. This helped to maintain QNB Group’s loans to deposits ratio at 98.4 percent as at June 30, 2018.
The Group’s drive for operational efficiency is yielding cost-savings in addition to sustainable revenue generating sources. This helped QNB Group to improve the efficiency ratio (cost to income ratio) to 27.2 percent, from 29.3 percent last year which is considered one of the best ratios among large financial institutions in the MEA.
Also the Group’s strong recovery efforts helped reduce the net impairment charge on QNB’s loan book during the year demonstrating strong credit quality of the bank’s asset base. Also maintaining the stock of non-performing loans ratio at 1.8 percent 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 maintained the coverage ratio at 110 percent as at June 30, 2018.
Total equity reached QR76bn ($21bn), up by 3 percent from June 2017. Earnings per share increased to QR7.4 ($2), compared to QR7 ($1.9) in June 2017.
Capital Adequacy Ratio (CAR) as at June 30, 2018 amounted to 15.8 percent, higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee.
QNB’s successful funding from the international markets during the first six months of 2018 which includes, among others, capital market issuances of $560m (A$700m) with a 5 and 10-year maturity in Australia and $720m bonds with 30 year maturity in Taiwan. This reflects the Group’s success in diversifying funding sources by entering new debt markets, sourcing sustainable long-term funding, extending the maturity profile of funding sources and the trust of international investors in the strong financial position of QNB Group and its strategy.
In June 2018, Fitch Ratings has revised the Outlook to Stable due to successful management of the impact from the blockade. Also QNB remains the highest-rated bank in Qatar and one of the highest-rated banks in the world with the fourth highest rating from the major rating agencies of Moody’s, Standard & Poor’s and Fitch.
