Asset re-pricing and loan growth more than offset the increased funding cost, thus helping Ahlibank effectively manage its net interest margins in 2017, according to its top official.
Moreover, the focus was on improving the maturity profile of the bank’s liabilities, its chairman and managing director Sheikh Faisal bin AbdulAziz bin Jassem al-Thani told shareholders yesterday at the annual ordinary general assembly meeting, which also endorsed the net profit of QR639.7mn as well as 10% cash dividend.
“We delivered another year of steady performance in a challenging market environment. The bank posted 8.9% growth in core operating income and 1.3% growth in net profit,” he said.
Total operating income grew 8.9% year-on-year to QR1.04bn on higher net interest income as higher loan balances and asset re-pricing more than offset the funding cost. Cost-to-income ratio in 2017 improved to 30.6%, reflecting the efficient management of operating expenses.
The extraordinary general assembly also approved the board’s proposal to increase the capital by 5% (through bonus issue) to 210.36mn shares.
The dividend proposal intends to maximise shareholders’ wealth as well as meet the requirements of the bank’s internal capital, liquidity and balance sheet growth projections, a spokesman said.
The bank’s balance sheet grew 4.5% to QR39.88bn, driven by growth in loans and advances as well as investment securities, he said, adding liquid assets constituted a healthy 25.8% of total assets at the end of December 2017.
The bank’s total funding had expanded 4.3% to QR33.79bn in 2017, primarily driven by a 100% growth in debt securities (euro medium term notes or EMTN)) to QR3.62bn and a 16.2% growth in other borrowings to QR2.19bn in December 2017, consisting of funding generated through medium term loans.
The return on average assets and return on average equity stood solid at 1.70% and 12.6% respectively, despite expansion in balance sheet size and equity base.
Non-performing loans ratio stood at 0.99% at the end of December 2017, reflecting strong asset quality. Loan loss provisions as of December 2017 were sufficient to cover 143% of non-performing loans.
Total customer deposits were QR23.57bn, despite challenging market conditions. However, deposits fell 5.8% year-on-year as the lender focused on improving stable funding and maturity profile through EMTN Tranche II issue during the first quarter of 2017 and additional medium term loans in the subsequent quarter.
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