DOHA: QNB Group, the region’s largest lender, has recorded a strong 13.7 percent growth in its net profit to QR9.5bn for the full-year 2013, on the back of core earnings.
On the strong financial results for the year, the group proposed a 70 percent cash dividend, means QR7 per share, subject to the approval of the general assembly and Qatar Central Bank (QCB).
Driven by strong growth rate in loans and advances, the group’s total assets increased a historic high by 20.9 percent from December 2012 to reach QR443bn. Loans grew at a rate of 24.3 percent and advances reached QR311bn.
The Group’s prudent cost control policy and strong revenue generating capability allowed it to maintain an efficiency ratio (cost to income ratio) of 20.4 percent, 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 1.6 percent, a level considered one of the lowest amongst banks in the Middle East and Africa, 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 123 percent in December 2013.
At the same time QNB Group increased customer funding by 24.3 percent to QR336bn. This led to the group’s loan to deposit ratio to reach 93 percent.
In order to diversify its source of funds, in April QNB Group announced the successful completion of a bond issuance under its Euro Medium Term Note (EMTN) programme in the international capital markets. Under this programme a $1.0bn tranche was issued on April 22, 2013 with a seven-year maturity and an attractive coupon rate of 2.875 percent. In October, QNB Group announced the completion of its highly successful dual tranche US dollar bond amounting to $1.5bn under its Euro Medium Term Note (EMTN) programme in the international capital markets. Under this programme, two tranches were issued on October 23, 2013. One tranche of $750m with a three-year maturity, at a coupon rate of 3-month Libor + 1.25 percent and another tranche of $750m with a five-year maturity, at a fixed coupon rate of 2.75 percent. Both the April and the October Reg S issues generated strong interest from investors around the world.
Total equity increased by 12 percent from December 2012 to reach QR54bn as at December 31, 2013.
Earnings per share reached QR13.5, compared to QR11.9 in December 2012. The capital adequacy ratio stood at 15.6 percent as at December 31, 2013, higher than the regulatory requirements of QCB and the Basel Committee.
The group revealed that these results include the financial results of QNB ALAHLI in Egypt, in which the group concluded the acquisition of a controlling stake amounting to 97.12 percent in March 2013.
As a result of the group’s high credit ratings and outstanding asset quality, it was selected as one of the world’s 50 safest financial institutions by Global Finance. Based on the group’s continuous strong performance and the expanding international presence, the bank is currently ranked as the most valuable brand in the MENA region, with a world ranking of 120.