to QAR10.3bn, up by six per cent compared to last year, demonstrating QNB Group’s success in maintaining robust growth while controlling costs, according to a press release issued on Wednesday.
The group’s prudent cost control policy and strong revenue generating capability helped to improve the efficiency ratio (cost to income ratio) to 29 per cent as at September 30, 2017, from 30.1 per cent a year ago, which is considered one of the best ratios among financial institutions in the region.
Total assets reached QAR792bn, up by 11 per cent from September 2016, the highest ever achieved by the group. This was driven by a growth rate of 14 per cent in loans and advances which reached to QAR579bn.
QNB Group was successful in attracting new customer deposits to comply with the cap on loans to deposit ratio of 100 per cent set by Qatar Central Bank (QCB), which will be effective from end of 2017.
These deposit mobilisation efforts resulted in increased customer funding by 15 per cent to QAR574bn compared with September 2016. This led to the reduction in the group’s loan to deposit ratio to 100.8 per cent, compared with 101.3 per cent in September 2016. This clearly demonstrates 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 per cent, 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 per cent in September 2017.
Diversified sources of liquidity
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 US$630mn tranche was issued with a maturity of 30 years callable every five 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.
Growing international presence
In July, QNB Group commenced its operations in the city of Mumbai, the economic capital 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 QNB 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 three continents providing a comprehensive range of products and services.
Exceptional capital strengths
Total Equity increased by two per cent from September 2016 to reach QAR77bn as at September 30, 2017. Earnings per share reached QAR10.7, compared to QAR10.3 in September 2016.
Capital adequacy ratio (CAR) calculated as per the QCB and Basel III requirements stood at 15.4 per cent as at September 30, 2017, higher than the regulatory minimum requirements of QCB and Basel committee. The group is keen to maintain a strong capitalisation in order to support future growth targets.
Maintain a strong credit profile
QNB Group has maintained its position as one of the strongest rated financial institutions in the region. This is a result of QNB Group’s strong financial position, high quality of its assets and its leading position in the financial sector.