QNB Group, the region’s largest lender, recorded a net profit of QR10.3bn for the first nine months ended September 30, 2017, up 6 percent compared to the same period last year.
The bank’s net profit for the period is highest in the history of QNB Group. The solid performance demonstrates QNB Group’s success in maintaining robust growth while controlling costs and the bank’s resilience to the ongoing diplomatic standoff in the region.
The Group’s prudent cost control policy and strong revenue generating capability helped to improve the efficiency ratio (cost to income ratio) to 29 percent as at September 30, 2017, from 30.1 percent in September 2016, which is considered one of the best ratios among financial institutions in the region.
Total assets reached QR792bn, up by 11 percent from September 2016, the highest ever achieved by the Group. This was driven by a growth rate of 14 percent in loans and advances to reach QR579bn.
The bank said a fall in its net interest income for the nine month period was primarily driven by the devaluation of the Egyptian pound in late 2016.
QNB Group was successful in attracting new customer deposits to comply with the cap on loans to deposit ratio of 100 percent set by QCB, which will be effective from end of 2017. These deposit mobilisation efforts resulted in increased customer funding by 15 percent to reach QR574bn from September 2016.
This led to the reduction in the Group’s loan to deposit ratio to 100.8 percent, compared with 101.3 percent in September 2016. This clearly reflects the success of QNB’s strategy to diversify its funding sources. The Group was able to maintain the ratio of non-performing loans to gross loans at 1.8 percent, 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 111 percent in 30 September 2017.
In September 2017 QNB Group successfully completed the issuance of Formosa bonds under its Euro Medium Term Note (EMTN) programme and listed on the Taipei Stock Exchange. Under this programme, a $630m tranche was issued with a maturity of 30 years callable every 5 years. The issuance was part of QNB Group’s on-going strategy to ensure diversification of funding in terms of type, tenor and geography.
This Reg S issue attracted strong interest from Taiwanese investors. This success is a testament to the trust of international investors in QNB Group’s strategy and the strength of its financial position.
Also the above is an example of a highly diversified international and local funding base spread across various geographies in terms of currencies, tenors and product mix.
QNB Group follows a very conservative approach to manage its liquidity needs and a prudent liquidity management programme is in place to address urgent and exceptional business requirements.
In July, QNB Group commenced its operations in the city of Mumbai, the economic capital of the Republic of India. This network expansion comes in support of its vision to become a leading bank in the Middle East, Africa, and Southeast Asia by 2020, in addition to establishing a foothold in highly competitive markets.
Through its new branch in India, the Group offers a full spectrum of banking products and services. The Group also offers its rich experience in wealth management, investment portfolios, project finance, and the provision of smart banking solutions and a range of innovative products and services designed to suit the requirements of the Indian market. QNB Group’s presence, through its subsidiaries and associate companies, spans more than 31 countries and 3 continents providing a comprehensive range of products and services.
