“This led to QNB Group’s loans-to-deposits ratio to decrease from 102.7% in December 2016 to 99.8% as on December 31, 2017,” a bank spokesman said. Highlighting that the group’s drive for operational efficiency is yielding cost-savings in addition to sustainable revenue generating sources; he said this helped QNB Group to improve the efficiency (cost-to-income) ratio to 29.1%, from 30.4% in 2016, which is considered one of the best ratios among large financial institutions in the region.
The group’s conservative loan loss provisioning policy and strong recovery efforts helped reduce net impairment charge on QNB’s loan book during the year, demonstrating strong credit quality of the bank’s core asset base. The non-performing loans ratio stood at 1.8% during 2017, 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 improved the coverage ratio to 112% at the end of December 31, 2017. Total equity increased 11% to QR79bn in 2017. The earnings-per-share reached QR13.7 compared to QR13.1 a year ago. The bank’s capital adequacy ratio stood at 16.49%, higher than the regulatory minimum requirements stipulated by the Qatar Central Bank and the Basel Committee.
The QNB Group was successful in tapping new markets for its long-term stable funding requirements by the issuance of Formosa bonds in September 2017 under its euro medium term note programme and was listed on the Taipei Stock Exchange. Under this programme, a $630mn tranche was issued with a maturity of 30 years callable every five years. Formosa bond issuance is part of QNB Group’s on-going strategy to ensure diversification of funding and also reflects investor confidence in QNB Group’s robust financial performance.
Sources and photo-credits: Gulf Times