DOHA: Qatar National Bank (QNB) posted a net profit of QAR 3.56 billion for the three-month period ended March 31, 2019 up 3.8% in comparison to a net profit of QAR 3.43 billion for the same period of the previous year.
The Earnings per Share (EPS) amounted to QAR 3.6 as of March 31, 2019 versus an EPS of QAR 3.6 for the same period of the previous year.
Commenting on the Group’s performance, Abdulla Mubarak AlKhalifa – Acting Group Chief Executive Officer said: “Qatar National Bank (QNB) has started the year with strong growth momentum attributable to it disciplined strategy execution.”
For the three months ended 31 March 2019, Net Profit reached QAR 3.6 billion, up by 4% compared to previous year, despite the impact of the Turkish Lira devaluation. Operating Income increased by 2.5% to QAR 6.2 billion. This reflects QNB Group’s success in maintaining sustainable income growth across a range of revenue sources.
The Group maintained robust cost controls which helped QNB Group to improve the efficiency ratio (cost to income ratio) to 25.9%, from 27.8% last year, which is considered one of the best ratios among large financial institutions in the MEA region.
Balance sheet drivers:
The key driver of total assets growth was from loans and advances which grew by 5% to reach QAR 623 billion. This was mainly funded by customer deposits which increased by 5% to reach QAR 634 billion as at 31 March 2019.
The growth of the QNB Group assets and liabilities has been partly affected by the devaluation in the Turkish Lira. The underlying growth in Group assets and customer deposits was negatively impacted by 1.6% and 1.4% respectively.
Despite the above, QNB’s strong asset liability management capabilities helped QNB Group to improve its loans to deposits ratio to 98.3% as at 31 March 2019.
Credit quality:
The ratio of non-performing loans to gross loans amounted to 1.9% as at 31 March 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% as at 31 March 2019.
Capital strength:
Group Capital Adequacy Ratio (CAR) as at 31 March 2019 amounted to 18.5%, higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee.
Top-tier credit ratings”
QNB Group’s solid financial strength is supported by top tier credit ratings that continues to attract institutional, corporate and individual customers to bank with QNB, and for investors and markets to believe in the Group’s strong financial position and strategy. QNB remains the highest-rated bank in Qatar and one of the highest-rated banks in the world with ratings of Aa3 from Moody’s, A from S&P and A+ from Fitch.
“These ratings are a testament to our capital strength, governance, prudent risk management, business and operating model. This provides us with a competitive advantage to access global capital markets for wholesale funding and enables us to continue our growth and expansion plans in line with our strategy,” a statement said.
Diversified sources of liquidity:
During the first quarter of 2019, QNB successfully closed the syndication of its EUR 2.0 billion three year senior unsecured term loan facility which is a testament to QNB’s strong credit profile. The Group also announced the successful completion of a US$ 1.0 billion bond issuance under its Euro Medium Term Note (EMTN) Programme in the international capital markets, maturing in 5 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 Middle East and Africa region. It also reflects their high confidence in QNB Group’s strategy over the coming years.
QNB Group serves a customer base of 24 million supported by 30,000 staff resources operating from more than 1,100 locations and 4,400 ATMs.[the_ad id=”31605″]