QNB, one of the leading banks in the Middle East, Africa and Southeast Asia, has reported a 4% increase year-on-year in net profit to QR3.6bn in the first three months of this year.
The profitability enhancement came amidst Turkish lira devaluation, a bank spokesman said.
Total assets grew 6% to QR882bn, the highest ever achieved by the group. The key driver of the assets growth was loans and advances, which expanded 5% to QR623bn.
This was mainly funded by customer deposits which grew 5% to QR634bn at the end of March 31, 2019.
"The growth of the group assets and liabilities has been partly affected by the devaluation in the Turkish lira," QNB said, adding despite the devaluation impact, QNB’s strong asset liability management capabilities helped the group to improve its loans-to-deposits ratio to 98.3% as on March 31, 2019.
The robust cost controls helped QNB Group improve the efficiency ratio (cost-to-income) to 25.9% compared to 27.8% in the previous year, which is considered one of the best ratios among large financial institutions in the Middle East and Africa (MEA) region.
The ratio of non-performing loans to gross loans stood at 1.9% at the end of three-month ended March 31, 2019, a level considered one of the lowest amongst financial institutions in the MEA region, 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 resulted in the coverage ratio of 106% at the end of March 31, 2019.
The lender's capital adequacy ratio (CAR), at the end of first quarter (Q1), was 18.5%, which is higher than the regulatory minimum requirements of the Qatar Central Bank and the Basel Committee.
During Q1, 2019, QNB successfully closed the syndication of its €2bn, three-year senior unsecured term loan facility which is a testament to the group's strong credit profile.
The group also announced the successful completion of a $1bn bond issuance under its Euro Medium Term Note programme in the international capital markets, maturing in five years with an attractive fixed rate coupon of 3.5% per annum.
These issuances attracted strong interest around the world by key global investors, reflecting investors’ confidence in QNB Group’s financial strength and its position as the largest financial institution in the MEA region.
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