QNB Group records $1.8 billion in net profit for the first half of 2017
QNB Group has announced its results for the first six months ended 30 June 2017.
Recording the highest in its history, QNB Group has reported a net profit of QAR 6.7 billion ($1.8 billion) for the first six months of 2017, up by seven per cent compared to last year. This is believed to have demonstrated QNB Group’s success in resilience and maintaining strong growth while controlling costs.
According to a statement, total assets reached QAR 768 billion ($211 billion), up by 11 per cent from June 2016, the highest ever achieved by the Group. The increase was driven by a growth rate of 11 per cent in loans and advances to reach QAR 552 billion ($152 billion). QNB Group was successful in attracting new customer deposits. These deposit mobilisation efforts resulted in increased customer funding by 15 per cent to reach QAR 562 billion ($154 billion) from June 2016. This led to the Group’s loan to deposit ratio reaching 98.3 per cent, compared with 101.7 per cent in June 2016. This clearly demonstrates the success of QNB’s strategy to diversify its funding sources.
The Group’s prudent cost control policy and strong revenue generating capability assisted in improving the efficiency ratio (cost to income ratio) to 29.3 per cent as at 30 June 2017, from 30.4 per cent in June 2016, which is considered one of the best ratios among financial institutions in the region.
The Group was able to maintain the ratio of non-performing loans to gross loans at 1.8 per cent, a level considered one of the lowest amongst financial institutional 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 continued with the coverage ratio reaching 110 per cent in 30 June 2017.
QNB Group benefits from a highly diversified international and local funding base spread across MEA, Europe and Asia. QNB has successfully diversified its wholesale funding pools in terms of currencies, tenors and product mix and follows a very conservative approach to manage its liquidity needs.
Based on this, the Group decreased its Loans to Deposit ratio to 98.3 per cent, from 101.7 per cent in June 2016 and improved liquid assets which comprise of cash and cash equivalents to QAR 65 billion ($18 billion) or eight per cent of total assets.
Total Equity increased by one per cent from June 2016 to reach QAR 74 billion ($20 billion) as at 30 June 2017. Earnings per share reached QAR 7.0 ($1.91), compared to QAR 6.7 ($1.85) in June 2016.
Capital Adequacy Ratio (CAR) calculated as per the QCB and Basel III requirements stood at 15.6 per cent as at 30 June 2017, higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee. The Group is keen to maintain a strong capitalisation in order to support future growth targets.
Based on the Group’s continuous strong performance and its diversified international presence, QNB is now the most valuable banking brand in the MEA region, with the value of its brand increased to $3.8 billion to rise to the 60th place globally, in addition to attaining the highest rating of AA+ in brand strength.