QNB Group posts QAR15.5bn in full-year profit

The banking group had QAR1.23tn in total assets at the end of December, a 4 per cent increase, driven by growth in loans and advances

by Kudakwashe Muzoriwa

January 12, 2024

QNB Group’s full-year net profit jumps 8%

Image credit: Bloomberg/ Contributor/ Getty Images

Qatar National Bank (QNB Group) posted $4.3bn (QAR15.5bn) in full-year profit, an 8 per cent increase from a year earlier, driven by the bank’s “robust and consistent performance” amid a surge in operating income and total assets.

Banks in the GCC region have benefited from higher interest rates in the wake of the US Federal Reserve’s moves to increase borrowing costs to combat inflation. Moody’s projected in its global outlook that GCC banks’ profitability will remain strong, supported by low provisioning requirements and high margins.

“Many GCC banks reported record profit in 2023 supported by higher margins from higher rates, increased business volumes and lower loan-loss provisions,” the ratings agency said earlier in December.

QNB said its operating income jumped 11 per cent to reach QAR39.1bn in 2023 supported by steady “growth across a range of revenue scores,” the GCC region’s biggest lender by assets said in a bourse filing Thursday.

QNB Group’s highlights for the financial statements for the 12 months ended 31 December 2023https://t.co/TE1jfmOSCA #QNB #QNBGroup #QNBEcon pic.twitter.com/rD19rC0IpD

— QNBGroup (@QNBGroup) January 11, 2024

The banking group’s full-year deposit base rose by 2 per cent to QAR857bn compared to the period ended December 31, 2022 thanks to a substantial inflow of customer deposits.

“This enabled the loans to deposits ratio to reach up to 99.5 per cent as at December 31, 2023,” QNB said in a statement. Its loan-to-deposit ratio remained strong at 99.5 per cent as at December 31, 2023.

Meanwhile, the Qatari lender’s cost-to-income ratio stood at 20 per cent “one of the best ratios among large financial institutions in the Middle East and Africa”.

The ratio of non-performing loans (NPL) to gross loans stood at 3 per cent as of December 31, 2023, reflecting the high quality of the banking group’s loan book and the effective management of credit risk. Its provision charge for loan losses also dropped by QAR0.1bn to reach QAR8.7bn, down 1 per cent compared with the previous year and the bank continued to maintain its coverage ratio at 100 per cent.

QNB’s growth strategy

Meanwhile, QNB Group remains the most valuable banking brand in the Middle East with a brand value of $7.7bn up 9 per cent from 2022, according to Brand Finance.

The role as the Official Middle East and Africa Supporter of the FIFA World Cup 2022, provided the chance for the group to gain exceptional global exposure during the month-long tournament.

QNB secured a $2bn three-year syndicated loan in November. The syndication was led by Bank of America Europe Designated Activity Company, Barclays Bank, HSBC Bank Middle East, J.P. Morgan Securities, Mizuho Bank, Standard Chartered Bank and SMBC Bank International.

The bank also secured a $2bn three-year unsecured term loan facility for general corporate purposes in October.

The banking group had QAR1.23tn in total assets at the end of December, a 4 per cent increase, driven by growth in loans and advances by 6 per cent to reach QAR853bn. Its capital adequacy ratio amounted to 19.8 per cent as at December 31, 2023, while its liquidity coverage ratio and net stable funding ratio expanded by 206 per cent and 105 per cent, respectively.

QNB’s board recommended a cash dividend of 65 per cent of the nominal share value (QAR0.65 per share) for the year.