Higher net fee and commission earnings as well as lower operating expenses and impairments helped Al Khaliji report more than 10% year-on-year growth in net profit to QR608mn in 2018; the bank has recommended 7.5% cash dividend to shareholders.
"Despite all the challenges, the bank’s strategy and successful business model have enabled us, once again, to deliver strong results. We continue to be well positioned to benefit from the economic expansion in Qatar that will remain robust and we look forward to a very successful 2019," said Sheikh Hamad bin Faisal bin Thani al-Thani, chairman and managing director, Al Khaliji.
Fahad al-Khalifa, Al Khaliji group chief executive, said the robust performance was the result of better balance sheet management, focusing on improving margins, containing cost of funding, maintaining cost efficiency and strengthening the capital and funding positions.
Net fee and commission income was QR189mn, registering an increase of 4% over last year, the bank said.
"These results reflect our strategy of continuing to invest in the local economy, and supporting our local clients while we continue to grow our franchise in Qatar. We have divested non-core overseas assets, therefore although the total average asset base of the bank reduced our operating income as a percentage of total average assets increased," al-Khalifa said.
During 2018, the bank continued to review its cost base, thereby reducing the group's operating costs to QR329mn to deliver an efficiency ratio of 28.8%.
"We also successfully raised $500mn under the banks euro medium term note programme, further strengthening our funding position. The issue was oversubscribed by more than three times and tightly priced, exhibiting the faith of debt investors in the bank’s performance and direction, and the underlying strength of the Qatari banking sector. This will support long-term growth," he said.
The lender's liquidity coverage ratio and capital adequacy ratio remain well above the minimum levels required by the Qatar Central Bank. Its balance sheet remains strong and liquid with 30% of total assets comprising cash and high quality investment securities.
The bank was able to bring down non-performing loans ratio to 1.88% in 2018 from 1.94% in the previous year.