By Pratap John/Chief Business Reporter

HE Kamal and al-Emadi: ‘excellent results’

Qatar’s largest bank QNB has posted a record net profit of QR5.7bn in 2010, up 36% on the previous year, registering ‘exceptional growth’ in all the portfolios of its operations.

The bank’s assets totalled QR223.4bn in December, 2010, a 25% increase over 2009.

Customer deposits and unrestricted investment accounts totalled QR165.5bn in 2010, which shows an increase of 32% over the previous year.

This, QNB said, has ‘positively impacted liquidity’ as the loans to deposits ratio stood at 80% for 2010, compared with 86% for 2009.

QNB’s total loans, advances and financing activities stood at QR131.7bn in 2010, up 21% on the previous year.

The net profit earned by QNB Al Islami, the bank’s Shariah-based arm, increased 115% to QR903.9mn last year.

QNB board of directors has recommended to the bank’s General Assembly the distribution of a cash dividend of 50% of the nominal share value (QR5 per share) and bonus shares of 30% of share capital (three shares for every 10 shares held by shareholders).

Announcing the results after a meeting of the bank’s board of directors here last night QNB chairman, HE Yousef Hussein Kamal, also the Minister of Finance and Economy, said the “strong results demonstrated once again QNB Group’s ability to record strong growth” across its operations.

The total equity attributable to the bank’s shareholders increased by 23.1% to QR24.2bn. The ‘strong growth in profitability’ increased earnings per share (EPS) to QR14.6 last year from QR10.7 in 2009.

The ratio of non-performing loans to total loans stood at 0.9% last year compared with 0.7% for 2009, which the bank said, ‘clearly demonstrated QNB Group’s success in maintaining the high quality of its loan portfolio through an effective risk management approach.’

The bank’s operating income recorded a ‘strong’ increase, up by 34.5% over 2009 to reach QR7.6bn.

QNB was able to achieve a strong growth in most sources of other income with net interest income and income from financing activities increasing by 52.3% to QR5.7bn, net fees and commission income increasing by 15.8% to QR1.1bn and net gains from foreign currency transactions increasing by 17.7% to QR358.7mn.

The bank was able to maintain an effective efficiency ratio (cost to income ratio) of 17%, compared to 19.6% in 2009 given the ‘strong’ increase in operating income.

QNB Group chief executive officer Ali Shareef al-Emadi said: “The excellent results for 2010 clearly reflect the successful implementation of QNB’s strategic objectives across a range of business activities, including international expansion plans. It is also a reflection of the effective risk management framework as the ratio of non-performing loans of 0.9% is one of the lowest in the region.

“QNB Group is keen on enhancing its service quality and providing customers with distinctive and innovative products that cater to their growing needs and expectations.”

The number of branches in Oman and Sudan have increased to three each, boosting QNB’s international network.

Also, the number of branches for QNB-Syria increased to 15 in various provinces across the country and in the capital Damascus.  Also, the bank’s stake in QNB-Syria rose to 50.8% along with an increase in the subsidiaries’ share capital to $300mn from $100mn.

A branch was also recently established in Nouakchott, Mauritania’s capital, thereby becoming the first bank in Qatar and the region to establish a presence in the country.

Regulatory approvals were obtained to establish two branches in Lebanon, which will take to 24 the number of countries where QNB and its associate companies operate.

Al-Emadi said despite the international expansion plan, Qatar remains the most important market for QNB Group, which continues to play a leading role in the financing of various projects for the private and public sectors across a wide range of economic activities.  

With the addition of new branches throughout the year, the bank maintains the largest network in Qatar, which consists of some 43 conventional branches and offices with an additional 16 branches and offices for QNB Al Islami and more than 170 ATMs.