Total assets at $237 bn: cost to income ratio falls to 25.8 pc
DOHA (QATAR): QNB (Qatar National Bank), the largest financial institution in the Middle East and Africa (MEA) region, has posted 5 per cent growth in its net profit to QAR13.8 billion ($3.8 billion) for the year ending December 31, 2018.
(This translates to approximately Rs27,000 crore.)
Total assets of the bank increased by 6 per cent from December 2017 to reach QAR862 billion ($237 billion), the highest ever achieved by the Group and one of the best set of results in QNB Group’s history.
The board of directors has recommended distribution of a cash dividend of 60 per cent of the nominal share value (QAR6 per share). The financial results for 2018 along with the profit distribution are subject to Qatar Central Bank (QCB) approval.
The key driver of total assets growth was loans and advances, which grew by 5 per cent to reach QAR613 billion ($168 billion). This was mainly funded by customer deposits which increased by 5 per cent to reach QAR617 billion ($169 billion) from December 2017.
“QNB’s strong asset liability management capabilities helped QNB Group to improve its loans to deposits ratio to 99.3 per cent as December 31, 2018,” a statement from the bank noted.
It also added that the Group’s drive for operational efficiency is yielding cost-savings in addition to sustainable revenue generating sources. “This helped QNB Group improve the efficiency ratio (cost to income ratio) to 25.8 per cent, from 29.1 per cent last year, which is considered one of the best ratios among large financial institutions in the region,” it further added.
The ratio of non-performing loans to gross loans amounted to 1.9 per cent as of December 31, 2018, a level considered 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 with regard to provisioning resulted in the coverage ratio at 104 per cent during the year.
Total equity during the period increased by 12 per cent from December 2017 to reach QAR88 billion ($24 billion) as of December end, 2018. Earnings per Share reached QAR14.4 ($3.9), compared with QAR13.7 ($3.8) a year ago.
Group Capital Adequacy Ratio (CAR) as of December 31, 2018 stood at 19 per cent, much higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee. QNB Group successfully raised another QAR10 billion as additional Tier 1 capital notes to support growth of the Group’s activities and operations in the future.