QNB Group, a leading bank in the Middle East and North Africa, has reported a 10% jump in its net profit to QR2.7bn in the first three months of this year on higher interest and non-interest earnings as well as robust gains from foreign exchange.
Corporate banking contributed QR1.8bn or 67% to net profit, asset and wealth management QR115.87mn or 4% and international banking QR763.21mn or 28% during the first quarter, according to its financial statement.
Net interest income rose 7% to QR3.2bn, net fee and commission income by 12% to QR0.6bn and net gain on foreign exchange by 16% to QR0.21bn, thus translating as a healthy 7% jump in operating income to QR4bn.
The group’s prudent cost control policy and strong revenue generating capability allowed it to maintain an efficiency ratio (cost-to-income ratio) of 21.7%, which is considered one of the best among financial institutions in the region.
Total assets rose 9% to QR502bn, the highest-ever achieved by the group, owing to a strong 9% growth in loans and advances to QR345bn.
Corporate banking assets stood at QR323.79bn or 65%, consumer banking QR23.13bn or 5%, asset and wealth management QR46.03bn or 9% and international banking QR213.43bn or 43%.
The group was able to maintain the ratio of non-performing loans to gross loans at 1.5%, a level considered one of the lowest amongst banks in the Middle East and Africa, reflecting the high quality of its loan book and the effective management of credit risk.
The QNB group’s conservative policy in regard to provisioning continued with the coverage ratio reaching 129% in March 2015.
The lender increased customer funding by 7% to QR369bn, leading to the group’s loan-to-deposit ratio reach 94%.
Total equity increased 6% to QR54bn as on March 31, 2015. Earnings-per-share reached QR3.8 compared to QR3.5 in March 2014.
Capital adequacy ratio, calculated as per the Qatar Central Bank and the Basel III requirements, stood at 15.1% at the end of first quarter ended March 31, 2015, higher than the regulatory minimum requirements.
“The group is keen to maintain a strong capitalisation in order to support future strategic plans,” a bank spokesman said.
During March 2015, credit rating agency Fitch has upgraded QNB group to ‘AA-/F1+’ on the back of the strength of Qatar’s sovereign rating.
QNB has maintained its credit rating from all other rating agencies and is considered one of the highest in the region due to its strong financial position, high quality of assets and leading position in the financial sector.
QNB group is present, through its subsidiaries and associate companies, in more than 27 countries and three continents providing a comprehensive range of products and services. The total number of staff is over 14,700 operating from over 630 locations and with an ATM network of more than 1,320 machines.
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Qatar’s population is projected to grow by 7% in 2015, which in turn will feed into higher economic growth by boosting aggregate demand and investment in housing and services, a new report has shown.
Qatar’s population grew by 9.5% in the year to March 2015 to reach 2.35mn, the “highest on record”, said QNB in its ‘Monthly monitor’.
Qatar’s rapid population growth is a result of the large influx of expatriate workers that are being hired to implement the infrastructure investment programme. Last month’s population growth registered a slight slowdown from 10.3% growth in the year to February.
Population growth in the 12 months to March equates to an increase of 203,000 people, equivalent to a growth rate of 9.5%.
The report also showed Qatar’s international reserves fell slightly to $38.7bn at end-February 2015 reflecting lower export receipts. This compares to $40.2bn at end- February 2014.
“Despite the slight fall, import cover remains more than adequate at 7.1 months of prospective imports at end-February 2015, well above the IMF-recommended level of 3 months for pegged exchange rates,” QNB said.
More broadly, Qatar’s international reserves have been steadily rising over the years on large current account surpluses. Going forward, QNB expects international reserves to remain broadly stable at seven months of prospective import cover over the medium term, notwithstanding the lower trade surplus.
Real GDP growth picked up to 6.7% in Q4 2014 (year-on-year) compared with 6% in Q3. In particular, hydrocarbon production grew 1.3% in Q4, having contracted in the previous four quarters due to maturing oil fields and scheduled maintenance at gas facilities.
Meanwhile, non-hydrocarbon growth remained in double-digits (10.3%). The Q4 data means that full year 2014 growth was 6.2%, compared with 6.3% in 2013.
According to QNB, Qatar’s crude oil production rose slightly in February. Qatar Petroleum (QP) is implementing a redevelopment programme to steady production at its oil fields.
“This heavy investment in maturing oil fields should stabilise oil production going forward,” QNB said.
In February, Qatari oil prices rose 22.9% from $44.6/barrel in January to $54.8/b.
The rebound was driven by a technical rebound in international oil markets.
Hence, QNB said it does not expect a significant further rebound in oil prices in 2015.
“However, in 2016-17 we do expect fundamental adjustments to the supply of crude oil, particularly amongst US shale oil producers, which should lead to a gradual recovery in oil prices,” QNB said.