Global Arab Network | QNB - Qatar National Bank Group Net Profit Exceeds $ 1.6 Billion

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QNB - Qatar National Bank Group Net Profit Exceeds $ 1.6 Billion

Global Arab Network - - Rabih Serrai

Monday, 10 January 2011 22:02

Qatar (Doha) - H.E.Yousef Hussain Kamal, the Chairman of the Board of Directors of QNB Group, announced that the Board in its meeting on Monday 10 January 2011 approved the Bank’s financial statements for the year ended 2010, adding that QNB Group was able to deliver outstanding financial results for 2010. Net Profit exceeded QR5.7 billion ($ 1.6 billion), representing an increase of 35.8% over 2009.

This clearly demonstrates QNB Group’s ability to record exceptional growth for the benefit of shareholders, with the return on average equity reaching 28.8% for 2010 compared to 25.4% for 2009. H.E. the Chairman added that these strong results demonstrated once again QNB Group’s ability to record strong growth across its operations.

H.E. the Chairman added that based on the strong financial results for 2010 and consistent with QNB Group aim of maximizing return to shareholders’, the Board of Directors is recommending to the General Assembly the distribution of a cash dividend of 50% of the nominal share value (QR5.0 per share) and a bonus shares of 30% of share capital (3 shares for every 10 shares).

H.E. Yousef Hussein Kamal added that the financial results for 2010 along with the profit distributions are subject to the approval by Qatar Central Bank.

In view of the ongoing expansion plans, both locally and internationally, and based on the strategic plans that aim to achieve further growth in QNB Group’s operations and given the recommendation of a study undertaken by a specialized consulting firm and to be able to continue meeting regulatory requirements including the proposed Basel III, and to maintain the Bank’s current high credit rating, the Board of Directors recommends to the Extraordinary General Assembly to increase the Bank’s capital after the bonus shares by 25% (1 share for every 4 shares) through a rights issue to be conducted during the second quarter of 2011, at a total price of QR100 per share which represents QR10 per share being the nominal share value and a premium of QR90 per share, with the total issuance covering all the Bank’s shares at that date.

With regard to the main items of the balance sheet, total assets increased by 24.6% to reach QR223.4 billion. Loans and advances and financing activities reached QR131.7 billion, representing an increase by 21.1%, with the ratio of non-performing loans to total loans at 0.9% compared to 0.7% for 2009, clearly demonstrating QNB Group success in maintaining the high quality of its loan portfolio through an effective risk management approach.

Customer deposits and unrestricted investment accounts increased by 31.5% during the year to reach QR165.5 billion, which has positively impacted liquidity as the loans to deposits ratio stood at 80% for 2010, compared to 86% for 2009. Total equity attributable to shareholders reached QR24.2 billion, up by 23.1% over 2009. The strong growth in profitability increased earnings per share to QR14.6 from QR10.7 in 2009. Operating income recorded a strong increase, up by 34.5% over 2009 to reach QR7.6 billion.

The Bank was able to achieve a strong growth in most sources of other income with net interest income and income from financing activities increasing by 52.3% to QR5.7 billion, net fees and commission income increasing by 15.8% to QR1.1 billion and net gains from foreign currency transactions increasing by 17.7% to QR358.7 million. The Bank was able to maintain an effective efficiency ratio (cost to income ratio) of 17.0%, compared to 19.6% in 2009 given the strong increase in operating income. QNB Al Islami also achieved excellent results during 2010, with net profit increasing by 115% to reach QR903.9 million. Financing activities increased to QR27.0 billion in 2010, representing an increase of 86.2% over 2009.

QNB Al Islami total assets increased by 46.4% to reach QR32.2 billion, while unrestricted investment accounts reached QR27.3 billion, up by 45.4% from the prior year. Commenting on the 2010 results, Mr. Ali Shareef Al Emadi, QNB’s Group Chief Executive Officer, stated: "The excellent results for 2010 clearly reflect the successful implementation of QNB’s strategic objectives across the range of business activities, including the international expansion plans. It is also a reflection of the effective risk management framework as the ratio of non-performing loans of 0.9% is one of the lowest in the region."

Mr. Al Emadi added: "QNB Group is keen on enhancing its service quality and on providing customers with distinctive and innovative products that cater to their growing needs and expectations." With regard to QNB’s international expansion plans, the number of branches in Oman and Sudan increased to three locations in each country in order to meet the increased level of activities, both conventional and Islamic in these countries. Also, the number of branches for QNB – Syria increased to 15 in various provinces across the country and in the capital Damascus.

Also, the Bank’s stake in QNB – Syria increased to 50.8% along with an increase in the subsidiaries’ share capital to $300 million from $100 million. This is a clear reflection of our confidence towards the promising outlook for the Syrian banking sector and the increasing opportunities available to QNB – Syria. A branch was also recently established in Nouakchott, the capital of Mauritania thereby becoming the first bank in Qatar and the region to establish a presence in the country.

With the addition of Mauritania, QNB Group’s presence in Africa through own branches, representative offices and subsidiaries and associate companies increased to five countries, including Tunisia, Sudan, Libya and Algeria Regulatory approvals were granted to establish two branches in Lebanon, which will further enhance QNB Group’s presences in the Arab Levant region given its presence in Syria through QNB – Syria and in Jordan and Palestine through the 34.4% stake in The Housing Bank for Trade and Finance. With the addition of Lebanon, the number of countries in which QNB Group and its associate companies operate around the world would increase to 24 countries in the Middle East, Asia and Africa.

Mr. Al Emadi added that despite the international expansion plan, Qatar remains the most important market for QNB Group which continues to play a leading role in the financing of various projects for the private and public sectors across a wide range of economic activities. With the addition of new branches throughout the year, the Bank maintains the largest network in Qatar that consists of 43 conventional branches and offices with an additional 16 branches and offices for QNB Al Islami and over 170 ATMs.

The Bank places the upmost importance to further enhancing the range of products and services offered that caters to customers’ expectation, the most recent of which was the launch, for the first time in Qatar, of "eazypay", that allows the transfer of funds through mobile phones, substituting transactions currently done by cash, cheque or credit card .

The transactions are carried out over secure and user-friendly networks. The customer benefits from 24-hour support from the Bank’s Customer Care Center. Also, a QNB Qtel Nojoom co-branded Visa credit card was launched, which offers customers the chance to earn Nojoom Points every time they use the card that can be redeemed for a wide range of rewards and experiences. In its first transaction in the international capital markets, QNB Group successfully completed its debut unsecured senior bond issue of $1.5 billion with a five year tenor.

This issue was the largest Reg Sever issued by an emerging market financial institution and witnessed a strong demand from regional and global investors, with a book build of almost $6 billion, which clearly demonstrated investors’ trust in QNB Group strategic plans and its strong financial position. A recognition of QNB’s leading market position and its ability to deliver sustained growth in all activities is the affirmation by rating agency Fitch of QNB's credit ratings in July 2010, with a long-term rating of A+ and short-term rating of F1, with a Stable Outlook. QNB Group’s ratings from the leading international ratings agencies including Standard & Poor’s, Capital Intelligence and Moody''s are the highest and on par with a small group of leading financial institutions in the region. Given its leading position in the initial public offerings (IPOs) business, QNB Capital received an award for Best IPO in the Middle East from emeafinance.

Additionally, QNB was named the Best Asset Manager - Qatar, at the inaugural "Future of Capital Markets in the Middle East" Summit & Awards organized by Global Investors Magazine. Further evidence of QNB’s leading position in the banking sector, the Bank was selected, once again in 2010, as the Best Bank in Qatar from Euromoney, The Banker and Global Finance. These Awards for Excellence is among the most respected global awards for excellence that takes into account business volume, innovation, leadership, credit ratings, quality of assets, efficiency ratios and key performance indicators among factors considered for the award. The Bank continues to play a leading role in supporting the community, extending generous contribution to cultural, social and sports activities. QNB Group, as the Official Bank for the Qatar 2022 Bidding file to host the games, is proud of the selection of Qatar to host the 2022 FIFA World Cup.
(QNA)

Global Arab Network

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