Friday, 19 August 2022

QNB reports 7% drop in first quarter 2021 net profit of $900 million as loan loss provision rises

5 min read

QNB, the largest financial institution in the Middle East and Africa (MEA) region, announced its results for the three months ended 31 March 2021.

Net Profit for first quarter of 2021 reached QAR3.3 billion (USD0.9 billion), a decrease of 7% compared the same period last year. Achieved a stable Operating Income of QAR6.7 billion (USD1.8 billion) for the first quarter of 2021 in line with last year, despite the impact of Covid-19. This reflects QNB Group’s success in maintaining growth across the range of revenue sources. In addition, QNB Group decided to set aside a loan loss provision of QAR1.4 billion (USD0.4 billion) as a precautionary measure taking into account the long-term view of the financial impacts of Covid-19 pandemic.

Following the successful milestone achievement of first banking institution in the region to achieve total assets of one trillion Qatar Riyal in December 2020, QNB Group succeeded in increasing its total assets to QAR1,042 billion (USD286 billion), representing an increase of 8% from March 2020.
The increase in total assets was mainly driven by increase in Loans and Advances by 2% to reach QAR721 billion (USD198 billion). On the funding side, QNB diversified its customer deposits generation that helped increase our customer deposit base to QAR750 billion (USD206 billion), resulting in a healthy loan to deposit ratio of 96.1% complemented by conservative credit underwriting during the first quarter and more focus more on sustainable deposit generation. 

In addition, QNB Group continued its drive for cost rationalisation in addition to sustainable revenue generating sources. This helped QNB Group to improve the efficiency (cost to income) ratio to 23.4%, which is considered one of the best ratios among the large financial institutions in the MEA region.

Despite the ongoing impact of Covid-19 pandemic, the ratio of non-performing loans to gross loans stood at 2.2% as at 31 March 2021, 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 increasing to 111% as at 31 March 2021.

Total equity increased by 5% to reach QAR94 billion (USD26 billion) as at 31 March 2021. Earnings per share for the three months ended 31 March 2021 reached QAR0.33 (USD0.09) compared to QAR0.36 (USD0.10) in March 2020. 

At 31 March 2021, QNB Group reported robust levels of capital measured in terms of the Capital Adequacy Ratio at 19%, higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee. 


Re-disseminated by The Asian Banker

Diary of Activities
Finance China 2022
25 August 2022
Finance Philippines 2022
22 September 2022
Finance Thailand 2022
04 October 2022
Finance Indonesia 2022
06 October 2022