QNB Group chairman HE Yousef Hussain Kamal and CEO Ali Shareef al-Emadi.
QNB, Qatar’s largest lender, has reported a healthy 11% expansion in its net profit to QR8.3bn in 2012 on the back of strong core earnings.
The bank — with operations in 24 countries across Asia, Europe and Africa — has declared a 60% cash dividend, which will have to be approved by shareholders at a general assembly meeting to be convened later and also by the Qatar Central Bank (QCB).
“These results, the highest ever achieved by the group, demonstrated once again its resilience and revenue-generating capacity, as well as outstanding success in expanding the group’s core business activities,” said a spokesman of QNB, which agreed to buy a majority stake in the Egyptian unit of Societe Generale.
Total assets increased by 21.5% to QR367bn, the highest ever achieved by the bank, which is in an acquisition spree in the Middle East and North Africa region. This was the result of a strong growth rate of 28.9% in loans and advances to QR250bn.
Meanwhile, customer deposits recorded a solid growth of 34.9% to QR270bn, resulting in improved liquidity with the loans to deposits ratio reaching 92.6% at year-end 2012.
In 2012, the bank continued to focus on diversifying it sources of liquidity and extending the maturity profile of its funding, the bank spokesman said.
The bank was able to maintain the ratio of non-performing loans to total loans at 1.3%, a level considered one of the lowest amongst banks in the Middle East and Africa, mirroring the quality of the group’s loan book and due to the effective management of credit risk.
QNB’s conservative policy in regard to provisioning continued with the coverage ratio reaching 115% in 2012.
Total operating income including share of results of associates increased to QR11.5bn, up by 12.8% against that in 2011, as QNB succeeded in achieving strong growth across the range of revenue sources.
Net interest income rose 17.3% to QR9.1bn, driven by the “impressive” 21.5% growth in the balance sheet and the group’s success in maintaining a strong net interest margin.
QNB continued to diversify its income sources, with net fees and commissions and net gain from foreign exchange reaching QR1.31bn and QR598mn respectively.
The group’s prudent cost control policy and strong revenue generating capability allowed it to maintain its efficiency ratio (cost-to-income ratio) at 16.8%, which is considered one of the best ratios among financial institutions in the region.
Highlighting the robust capitalisation, QNB said total equity increased by 12.6% to reach QR48bn at the end of December 31, 2012. The capital adequacy ratio reached 21% at year-end 2012, far higher than the regulatory requirements of the QCB and the Basel Committee.
“The bank is keen to maintain a strong capitalisation in order to support future strategic plans,” the spokesman said.
QNB Group was able to record a strong return to shareholders, with the return on average shareholder’s equity reaching 20.5% in 2012. The bank’s earnings-per-share was QR11.9 in 2012 compared to QR11.3 a year ago.
