Aided by strong operating earnings, QNB, a leading bank in the Middle East and Africa, has reported more than 7% growth year-on-year in net profit to QR2.9bn in the first three months of this year.
The results did not include those from Turkey’s Finansbank, whose results are to be incorporated during the second quarter of this year, a QNB spokesman said.
Net interest income grew more than 4% to QR3.3bn even as net fee and commission earnings fell about 3% to QR0.54bn, the bank said.
Despite a 3% fall in net gain on foreign exchange, the bank reported a 2% jump in operating income to QR4.1bn as income from investment securities more than quadrupled to QR0.1bn. Total expenses stood at QR0.9bn.
The group’s prudent cost control policy and strong revenue generating capability allowed it maintain an efficiency ratio (cost-to-income ratio) of 22.7%, which is considered one of the best ratios among financial institutions in the region, the spokesman said.
Total assets grew 10% to QR550bn, mainly driven by a 16% growth in loans and advances to QR402bn. Deposits also expanded 10% to QR403bn.
The growth of the group assets and liabilities has been affected by the sharp devaluation in the Egyptian pound, in which total assets and customer deposits were negatively impacted by QR7bn and QR5bn respectively.
The bank’s loan-to-deposit ratio stood at 99.7% at the end of March 2016 against 94.4% in the previous year period.
Its non-performing loans as a proportion to gross loan was 1.4%, slightly lesser than 1.5% registered in the year-ago period.
The group was able to maintain the ratio of non-performing loans to gross loans at 1.4%, a level considered one of the lowest amongst banks in the Middle East and Africa, reflecting the high quality of its loan book and the effective management of credit risk, the spokesman said. The bank’s conservative approach in provisioning led it to report a coverage ratio of 120% at the end of first quarter of 2016 compared to 129% in the previous year period, the spokesman added.
Total equity increased by 11% from March 2015 to QR60bn as on March 31, 2016. Earnings per share reached QR3.4 compared to QR3.2 in March 2015.
Highlighting that capital adequacy ratio stood at 15.8%, higher than the regulatory requirements of the Qatar Central Bank and Basel Committee; the bank said it is keen to maintain strong capitalisation to support future strategic plans.
QNB is present, through its subsidiaries and associate companies, in more than 27 countries and three continents, providing a comprehensive range of products and services. The total number of staff is more than 15,300 operating from over 640 locations and with an ATM network of more than 1,400 machines.