QNB Group Grows Net Profits by 7% to $1.9b in H1 2018

By Dipo Olowookere

The largest financial institution in the Middle East and Africa (MEA) region, QNB Group, has announced its results for the six months period ended June 30, 2018.

During the period under review, the lender recorded a Net Profit of QAR7.1 billion ($1.9 billion), up by 7 percent compared with last year.

In addition, the total assets increased by 10 percent from June 2017 to reach QAR846 billion ($232 billion), the highest ever achieved by the Group.

The key driver of total assets growth was from loans and advances which grew by 9 percent to reach QAR604 billion ($166 billion). This was mainly funded by customer deposits which increased by 9 percent to reach QAR614 billion ($169 billion) 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.

Furthermore, 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 QAR76 billion ($21 billion), up by 3 percent from June 2017, while earnings per share increased to QAR7.4 ($2), compared with QAR7.0 ($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, amongst others, (1) capital market issuances of $560 million (AUD700 million) with a 5 and 10-year maturity in Australia and (2) $720 million 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 had 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.

QNB Group serves a customer base of more than 22 million customers with more than 29,000 staff resources operating from 1,100 locations and 4,400 ATMs.