QNB 2017 net profit up 6pc to $3.6bn

17/01/2018 05:28 AST

QNB Group, a leading financial institution in the Middle East and Africa (MEA) region, posted a net profit of QR13.1 billion ($3.6 billion), up by 6 per cent compared to last year.

Total assets increased by 13 per cent from December 2016 to reach QR811 billion ($223 billion), the highest ever achieved by the Group.

The Board of Directors have recommended to the General Assembly for the distribution of a cash dividend of 60 per cent of the nominal share value (QR 6.0per share). The financial results for 2017 along with the profit distribution are subject to Qatar Central Bank (QCB) approval.

Key driver of total assets growth was from loans and advances which grew by 12 per cent to reachQR584 billion ($161 billion). Also QNB Group increased customer deposits by 16 per cent to reach QR586 billion ($161 billion) from December 2016. This led to QNB Group’s loans to deposits ratio to decrease from 102.7 per cent in December 2016, to reach 99.8 per cent as at 31 December 2017.

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 29.1 per cent, from 30.4 per cent last year which is considered one of the best ratios among large financial institutions in the region.

The Group’s conservative loan loss provisioning policy and strong recovery efforts helped reduce net impairment charge on QNB’s loan book during the year demonstrating strong credit quality of the bank’s core asset base. Also the stock of non-performing loans ratio of1.8 per cent as at 31 December 2017 has been witnessed on a consistent basis, year on year, 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 improved the coverage ratio to reach112 per cent as at 31 December2017.

Total Equity increased by 11 per cent from December2016 to reach QR79 billion ($22 billion) as at 31 December 2017. Earnings per Share reached QR13.7 ($3.8), compared to QR13.1 ($3.6) in December 2016.

Group Capital Adequacy Ratio (CAR) as at 31 December 2017 amounted to 16.49 per cent, higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee.

QNB Group was successful in tapping new markets for its long term stable funding requirements by the issuance of Formosa bonds in September 2017 under its Euro Medium Term Note (EMTN) programme and was listed on the Taipei Stock Exchange.

Under this programme, a $630 million tranche was issued with a maturity of 30 years callable every five years. Formosa bond issuance is part of QNB Group’s on-going strategy to ensure diversification of funding and also reflects investor confidence in QNB Group’s robust financial performance.

Trade Arabia