QNB, the largest financial institution in the Middle East and Africa (MEA) region, announced its results for the year ended 31 December 2020.
Net Profit for the full year reached QAR12.0 billion (USD3.3 billion), a decrease of 16% compared to last year. Operating Income increased by 1% compared to last year despite the impact of Covid-19 and the decline in oil prices. This reflects QNB Group’s success in maintaining growth across the range of revenue sources. Considering the long-term financial impacts of Covid-19, QNB Group decided to set aside an additional QAR5.8 billion in respect of loan loss provisions as a precautionary measure, which affected the net profit for the year.
For the first time in history of the region, QNB became the first banking institution to record total assets of QAR1.0 trillion (USD282 billion), representing an increase of 9% from last year. QNB’s disciplined approach towards execution of its long-term strategy enabled the Group to achieve the One Trillion Qatar Riyal Total Asset milestone after 56 years of successful operation since inception.
The Board of Directors have recommended to the General Assembly the distribution of a cash dividend of 45% of the nominal share value (QAR0.45 per share). The financial results for 2020 along with the profit distribution are subject to Qatar Central Bank (QCB) approval.
The growth in total assets was mainly driven by strong growth in Loans and Advances by 7% to reach QAR724 billion (USD199 billion). On the funding side, QNB diversified its customer deposits generation which helped to increase deposits by 8%, to reach QAR739 billion (USD203 billion) from 31 December 2019.
During the year, QNB Group renewed its drive for cost rationalisation in addition to sustainable revenue generating sources. This has helped QNB Group to materially improve the efficiency (cost to income) ratio from 25.9% to 24.3% which is considered one of the best ratios among the large financial institutions in the MEA region.
QNB strengthened its asset and liability management capabilities helping to reduce its loans to deposits ratio from 99.2% to 98.0% as at 31 December 2020 mainly due to conservative credit underwriting during the year and more focus on deposit generation given the current low interest rate environment.
The ratio of non-performing loans to gross loans amounted to 2.1% as at 31 December 2020, one of the lowest amongst financial institutions 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 for potential loan losses resulted in the coverage ratio improving to 107% as at 31 December 2020.
Total Equity increased by 2% to reach QAR97 billion (USD27 billion) as at 31 December 2020. Earnings per Share reached QAR1.19 (USD0.33), compared to QAR1.45 (USD0.40) in December 2019.
At 31 December 2020, QNB Group reported robust levels of capital measured in terms of the Capital Adequacy Ratio at 19.1%, higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee.
QNB Group serves a customer base of approximately 20 million customers supported by 28,000 staff resources operating from 1,000 locations and more than 4,300 ATMs.