Al Khaliji net profit jumps 14pc in 2011
Doha, February 7, 2012
Qatar-based Al Khaliji Bank has posted QR487 million ($133.75 million) in net profit after tax for 2011, up from QR427 million in 2010, marking an increase of 14 per cent.
With profit before tax over QR500 million and asset growth up 44 per cent, having more than doubled in 3 years, the bank affirmed its ability to grow in tough prevailing market conditions, a statement said.
Qatar’s conventional banking activities contributed to 83 per cent of the net operating income while Al Khaliji France, its wholly owned subsidiary headquartered in Paris, and present in 4 emirates in the UAE, contributed 16 per cent.
Al Khaliji France’s net profit reached QR55 million, up by 9 per cent compared to 2010. This growth was achieved while France’s and UAE’s GDPs grew respectively by only 1.6 per cent and 3.3 per cent in 2011.
Sheikh Hamad Bin Faisal Bin Thani Al Thani, chairman and managing director, said: “Al Khaliji’s performance in 2011, achieved against the backdrop of global stress in banks and highly volatile financial markets, is the result of the sound implementation of our mid-term strategy, the efforts of our management and staff, and the guidance and support of our regulators.”
Total assets advanced 44 per cent during the year and reached QR27.0 billion in 2011, with Al Khaliji France representing 12 percent of the Group’s total assets.
Loans and advances grew by 56 per cent in 2011 to reach QR11.3 billion on December 31, 2011, funded by equally strong growth in deposits, up 55 per cent in 2011 at QR12.1 billion. During the same period, deposits in Qatar banking system increased by 19 per cent, and Qatari banks’ loan-to-deposit ratio was at 111 per cent.
With a capital adequacy ratio of 23 per cent and loan-to-deposit ratio at 93 per cent, there is clearly more room for the bank to grow.
Robin McCall, Al Khaliji Group chief executive officer, said: “Towards the end of last year, the Bank took the decision to allow some advances to be repaid early. It is heartening to see that we have replaced all those and continue on the growth path. We are pleased with al Khaliji’s strong liquidity and funding positions during the current volatile market conditions. While we look for the deployment of liquidity at best yields, maintaining asset quality remains our first priority.”
Net interest income, at QR577 million, is 25 per cent higher than the QR463 million achieved in 2010, and Al Khaliji also expanded its fee and commission based activities.
Net fee and commission income for the 12 months period reached QR120 million, up 19 per cent compared to 2010.
Net operating income reached QR940 million in 2011, up 24 per cent on 2010, when it was QR760 million.
Net income from Islamic banking activities of QR11 million is much lower than 2010’s QR89 million, owing to Al Khaliji’s need to comply with Qatar Central Bank’s directive to suspend conventional banks’ Islamic activities, the statement said.
General and administrative expenses decreased by 7 per cent in 2011 to QR297 million, compared to QR320 million in 2010. Commenting on the continuous improvement in the cost to income ratio, which was 40 per cent in 2011, compared to 52 per cent in 2010, McCall said: “Disciplined management helped us reduce our operating expenses while increasing efficiency and improving productivity.”
Earnings per share (EPS) increased to QR1.35 compared to QR1.19 in 2010. Return on average shareholder equity is 9.14 per cent, and return on average assets is 2.02 per cent, compared respectively to 8.46 per cent and 2.21 per cent at 31 December 2010.
“At Al Khaliji, we are conscious that the quality of the loan portfolio is a key contributor to future fluctuations in earnings and shareholders’ equity. This is why we adopt a prudent provisioning policy and monitor our loan book carefully,” McCall said.
The Board of Directors of Al Khaliji recommended to the General Assembly of shareholders to approve the distribution of QR1 per share as cash dividends, which represents 10 per cent of the Bank’s paid-up capital.
Sheikh Hamad Bin Faisal Al-Thani said: “Our house view on the Qatar economy is positive for 2012. We expect Qatar real GDP to grow by 6-8 per cent in 2012, with strong growth in the non-hydrocarbon sector due to ongoing infrastructure projects and manufacturing plans.”
“Whilst Qatar is not immune to the downturn in the global economy, the impact of further negative international developments would be muted as most of the country’s exports are tied up with long-term contracts,” he concluded. – TradeArabia News Service