Al khaliji 2011 net profit jumps 14% to QR487mn

08/02/2012 08:19 AST

Al khaliji, the country’s new generation bank, has reported a 14% rise in its net profit to QR487mn in 2011.

The bank has suggested 10% cash dividend, which will have to be approved by shareholders at the annual general assembly.

Net interest income grew 25% to QR577m and its net fee and commission earnings by 19% to QR120mn, a bank spokesman said. Net operating income surged 24% to QR940mn.

Revenues grew in local and international segments. Qatar’s conventional banking activities contributed to 83% of the net operating income while Al Khaliji France, its wholly owned subsidiary headquartered in Paris, and present in four emirates in the UAE, contributed 16%.

Al Khaliji France’s net profit reached QR55mn, up 9% compared with 2010. The growth was achieved while the European nation’s and the UAE’s economy grew 1.6% and 3.3% respectively in 2011, the spokesman said.

Total assets advanced 44% to QR27bn, with its French subsidiary representing 12% of the group’s total assets.

“Al khaliji’s performance in 2011, achieved against the backdrop of global stress in banks and highly volatile financial markets, is the result of the sound implementation of our mid-term strategy,” chairman and managing director Sheikh Hamad bin Faisal bin Thani al-Thani said.

But net income from Islamic banking activities plunged 88% to QR11mn, owing to the need to comply with the Qatar Central Bank’s directive to suspend conventional banks’ Islamic financing activities.

Loans and advances grew 56% to QR 11.3bn, funded by strong growth in deposits which jumped 55% to QR12.1bn. During the same period, deposits in Qatar’s banking sector increased by 19%, and Qatari banks’ loan-to-deposit ratio was at 111%.

With a capital adequacy ratio of 23% and loan-to-deposit ratio at 93%, there is clearly more room for the bank to grow, according to Robin McCall, al khaliji Group CEO.

“We are pleased with al khaliji’s strong liquidity and funding positions during the current volatile market conditions. While we look for the deployment of liquidity at best yields, maintaining asset quality remains our first priority,” he said.

General and administrative expenses fell 7% in QR297mn.

Highlighting that the bank improved its cost-to-income ratio as it fell to 40% from 51% in 2010; McCall said “disciplined management helped us reduce our operating expenses while increasing efficiency and improving productivity.”

Earnings per share increased to QR1.35 against QR1.19 in 2010. Return on average shareholder equity was 9.14% and return on average assets was 2.02% against 8.46% and 2.21% respectively in 2010.

Non-performing loans and advances (NPLs) fell 38% to QR62mn. The NPL ratio continues to improve to 0.5% from 1.3% in 2010, the bank said, adding it had set aside QR38mn towards impairment losses on loans (net of recoveries) in 2011.

Gulf Times