Qatar National Bank recently announced it had achieved record profits and earnings per share in the year 2001. Net profit rose by 7.4 percent to 527.3 million Qatari riyals ($144.8 million) compared with QR491 million in 2000.
Total assets went up by QR3.8 billion, equivalent to 15 percent, to QR28.4 billion ($7.8 billion). Deposits grew by QR3.2 billion, or 18 percent, to QR21.4 billion ($5.9 billion), while
shareholders' funds totaled QR4.7 billion ($1.3 billion). Risk Asset Ratio was at 41 percent, compared with Qatar Central Bank requirement of 10 percent, and Basle minimum stipulation of eight percent Efficiency ratio (costs to income) was strong at 28.4 percent, as compared to 28.6 percent in 2000.
Earnings per share went up from QR4.7 to QR5.1 over the same period, while net interest income increased by QR62.5 million—10 percent—to QR690.5 million. This increase was generated during a period of declining interest rates and spreads and therefore reflected the Bank's strenuous efforts to generate significant additional quality business against this lower interest rate background, according to a bank press release.
Other operating income grew by QR25.3 million (22%) to QR142.2 million. This increase was particularly encouraging as it was a key aim at the beginning of 2001 to deliver strong growth in other operating income in order to mitigate the impact of reduced spreads on net interest income.
Accordingly, the Bank's ratio of non-interest income to total income grew from 15.7 percent in 2000 to 17.1 percent in 2001, and it is one of the Bank's principal goals to see this ratio increase significantly in the coming years, the release added.
Total costs, excluding Community Support, increased by QR23.2 million (11 percent) to QR236.2 million. Staff related costs grew by QR7.5 million (five percent) to QR144.8 million and the controlled increase in staff costs, in comparison with the increase in operating profit, reflected the Bank's aim of the optimal utilization of its valuable staff resources.
Other general and administrative expenses grew by QR15.6 million (20 percent) to QR91.5 million, a key factor of which was the QR4.5 million increase in depreciation and other direct IT expenditure resulting from the investment the Bank is making in its IT systems. The Bank's efficiency ratio, being total costs as a percentage of income, improved from 28.6 percent in 2000 to 28.4 percent in 2001.
Net provisions for the impairment of loans were QR63.7 million, QR 32 million higher than in 2000. Of this increase, QR21 million were due to lower recoveries than in 2000, with QR 2.4 million being due to an increase in other general provisions for loan impairment. The increase was not therefore a reflection of deteriorating credit quality during the year, bank officials noted.
The ratio of the Bank's non-performing loans as a percentage of total loans and advances improved from 2.6 percent in 2000 to 1.9 percent in 2001. The year 2001 also saw the implementation of International Accounting Standard (IAS) 39 dealing with the accounting treatment and disclosure of financial instruments.
During 2001, the Bank's total assets increased by QR3.8 billion (15 percent) to QR28.4 billion, with total deposits increasing by QR3.2 billion (18 percent) to QR 21.4 billion. The Bank's advances to deposits ratio stood at 89 percent at December-end 2001, and the Bank now operates with optimal levels of liquidity resulting from the eradication of the tight liquidity situation, which was for so long a predominant feature of the Qatari banking system.
Capital Strength
Total shareholders' equity at 31st December 2001 was QR 4.7 billion ($1.3 billion) and the Bank now ranks 282nd in the world, up 14 places from the previous year, in The Banker top 1000 banks for 2001. In addition the Bank ranks 39th in the world in terms of capital strength as measured by its equity to assets ratio.
The Bank's risk assets ratio is 41 percent, comfortably in excess of the minimum level of eight percent stipulated in the Basle capital adequacy directives and the 10 percent minimum level set by Qatar Central Bank. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
