QNB Group Financial Results For The Year Ended 31 December 2015
QNB Group’s Key Financial Indicator
- • Net Profit reached QAR11.3 billion, up by 8% from December 2014
- • Total Assets stood at QAR539 billion, up by 11% from December 2014
- • Net Loans and Advances up by 15% from December 2014 to reach QAR388 billion
- • Total Customer Deposits up by 11% from December 2014 to reach QAR395 billion
- • Earnings per Share reached QAR16.1, compared to QAR14.9 in December 2014
- • Total Shareholders’ Equity increased to QAR62 billion, up by 7% from December 2014
Cash Dividends of 35% of the nominal value of the share and a bonus shares of 20% of the share capital
Enhance Shareholders’ Equity
Recommend to the General Assembly to approve the issuance of capital instruments that qualify as Tier 1 additional capital and/or Tier 2 capital instruments
QNB Group, a leading bank in the Middle East and Africa, announced that the Board of Directors, during its meeting on Wednesday 13 January 2016 has approved its results for the year ended 31 December 2015.
Based on the strong financial results for 2015 and consistent with QNB Group’s aim of maximising returns to shareholders, the Board of Directors is recommending to the General Assembly the distribution of a cash dividend of 35% of the nominal share value (QAR3.5 per share) and a bonus shares of 20% of the share capital (Two shares for every ten shares). The financial results for 2015 along with the profit distribution are subject to Qatar Central Bank (QCB) approval.
Key indicators of the financial results for the year ended 31 December 2015 are shown below.
Achieve Sustainable Profitable Growth
|Net Interest Income||12.7||12.3||3.9%|
|Net Fee & Commission Income||2.2||2.1||6.1%|
|Key Performance Indicators||Dec-15||Dec-14|
|Earnings per Share (QAR)||16.1||14.9|
|Cost to Income Ratio||21.5%||20.8%|
* Net Profit refers to Net Profit attributable to Equity Holders of the Bank
For the twelve months of 2015, Net Profit was QAR11.3billion, up by 7.7% compared to last year. This was driven by operating income, which increased to QAR16.3billion, up by 3.0% compared to December 2014, demonstrating QNB Group’s success in achieving strong growth across the range of revenue sources.
Net interest income increased by 3.9% to reach QAR12.7 billion, with net fee and commission income and net gain from foreign exchange reaching QAR2.2 billion and QAR746 million, respectively, reflecting success in diversifying sources of income.
The Group’s prudent cost control policy and strong revenue generating capability allowed it to maintain an efficiency ratio (cost to income ratio) of 21.5%, which is considered one of the best ratios among financial institutions in the region.
Maintain Strong Financial Strength
|Balance Sheet (QAR billion)||Dec-15||Dec-14||Growth|
|Loans and Advances||388||338||14.8%|
|Key Performance Indicators||Dec-15||Dec-14|
|Loan to Deposit Ratio||98%||95%|
Total assets increased by 10.7% from December 2014 to reach QAR539 billion, the highest ever achieved by the Group. This was the result of a strong growth rate of 14.8% in loans and advances to reach QAR388 billion.
The Group was able to maintain the ratio of non-performing loans to gross loans at 1.4%, a level considered one of the lowest amongst banks in the Middle East and Africa, 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 127% in December 2015.
At the same time QNB Group increased customer funding by 10.5% to QAR395 billion. This led to the Group’s loan to deposit ratio reaching 98%.
Enhance Shareholder Value
Total Equity increased by 7.1% from December 2014 to reach QAR62 billion as at 31 December 2015. Earnings per Share reached QAR16.1 compared to QAR14.9 in December 2014.
Capital Adequacy Ratio (CAR) calculated as per the QCB and Basel III requirements stood at 16.3% as at 31 December 2015, higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee. The Group is keen to maintain a strong capitalisation in order to support future strategic plans.
To further enhance the shareholders’ equity and continue to maintain a capital adequacy ratio higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee, the Board of Directors agreed to recommend to the General Assembly to approve the issuance of capital instruments that qualify as Tier 1 additional capital and/or Tier 2 capital instruments in accordance with Qatar Central Bank and Basel Committee requirements, and authorise the Board of Directors to determine the size, timing, pricing and other related terms and conditions.
Maintain the Highest Credit Ratings
During March 2015, Fitch Rating agency upgraded QNB Group to AA-/F1+ on the back of the strength of the State of Qatar’s sovereign rating. QNB Group has maintained its credit rating from all other rating agencies and is considered one of the highest 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.
As a result of the Group’s high credit ratings and outstanding asset quality, it was selected as one of the world’s 50 safest financial institutions by Global Finance.
Institution of Choice
QNB Group was the recipient of many leading local, regional and international awards including Euromoney – Best Bank in the Middle East and Qatar and The Banker Middle East – Best Bank in Qatar. These awards reflect QNB’s global success and the growing International network of operations now extending across more than 27 countries and 3 continents.
Ensure Strong Brand Recognition and High Brand Value
Based on the Group’s continuous strong performance and its expanding international presence, QNB improved its ranking within the Brand Finance Global Top 500 Banking Survey 2015 and is now the biggest bank brand by value in The Middle East and Africa. The QNB Ranking moved significantly from 101st (Brand Value: USD1.8 billion in 2014) to 79th (Brand Value: USD2.6 billion in 2015) further recognising QNB’s improved standing and strong brand recognition.
Raise QNB’s Organisation to the Next Level
In December 2015, QNB Group entered into a definitive agreement with the National Bank of Greece for the acquisition of its entire stake comprising 99.81% in Finansbank A.Ş (Finansbank) in Turkey. QNB Group expects to finalise the transaction during the first half of 2016.
Finansbank is the fifth largest privately owned universal bank by total assets, customer deposits and loans in the Turkish market. Finansbank has grown organically into a full service financial institution with an independent and experienced management, nationwide distribution network of 647 branches and over 5.3 million customers. As of 30 June 2015, Finansbank had US$29.0 billion of assets, US$19.5 billion in loans and US$14.6 billion in deposits and total equity amounted to US$3.6 billion as per International Financial Reporting Standards.
Also during the second half of 2015, QNB Group received approval from the Saudi Cabinet to open a branch in the Kingdom and the process of opening that branch has begun.
Strengthen and Enhance Capabilities
QNB Group is continuing to embed compliance principles within the group by promoting a culture of compliance across all areas starting from top management and cascading down to all employees. As part of these on-going initiatives all employees have been provided with training on the principles of compliance, AML and Chinese Walls in order to highlight the importance of adhering to regulatory requirements and reporting any misconducts which are vital to the group’s growth strategy and assist significantly in achieving the group objective of becoming a leading MEA bank by 2017 and a global bank by 2030. QNB will continue to keep regulatory compliance as a high priority item in its agenda whilst ensuring achievement of the business targets of QNB Group.
Ensure Outstanding Talent Pool
Group Human Capital continued its extensive training and development implementations through various programs such as Leadership, Supervisory, Individual and Trainee Development which provided employees at all levels an opportunity to develop and identify the QNB top talents.
The Bank continued its Ambassador program where talented employees are sent to work overseas in one of QNB’s international entities for a period of 6 to 24 months. The aim of the program is to expose the future leaders of QNB to international business environments early in their careers in order to enhance and develop the foundational skills and capabilities required to lead QNB with a global mind-set in the future.
QNB undertook an Employment Engagement Survey to help identify areas of strength and areas for improvement in regards to the workforce. From the results of this survey several initiatives have been undertaken to improve how employees view and operate within QNB, such as the recently launched QNB Managers Guidebook which empowers managers at all levels by giving them tools to address employees concerns directly. Multiple other initiatives are planned as QNB continues to strive towards being recognised as an Employer of Choice by both staff and potential candidates.
The Bank continues to place high emphasis on recruiting nationals in all countries in which the Group operates, providing them with dedicated training programs to further enhance their capabilities. This has resulted in the Bank having a Qatarisation ratio that exceeds 51% in Qatar, the highest among financial institutions in Qatar.
QNB Group is present, through its subsidiaries and associate companies, in more than 27 countries and 3 continents providing a comprehensive range of products and services. The total number of staff is more than 15,200 operating from over 635 locations and with an ATM network of more than 1,390 machines.