The QNB goes from strength to strength

In terms of its results, the QNB saw its net profits lift by 30.4 per cent last year to reach $550 million, as opposed to $420.6 million in 2005. The Bank saw a substantial rise in all of its income components and, as a result, total income grew by 23.5 per cent to hit $742.1 million. This growth, combined with the control of costs, enabled the QNB to improve its costs to income ratio to 27.5 per cent, up from 29.6 per cent in the previous year.

More loans, extra deposits

At the end of 2006, the institution's total assets stood at a hefty $19.7 billion, an increase of $5.9 billion, or 43.2 per cent. The sizeable jump in assets was mainly attributable to a 46.9 per cent rise in the number of loans and advances and a 52 per cent spike in customer deposits, and unrestricted investment accounts, which went up by $5.2 billion during the year to touch $15.3 billion, due to an expansion in the retail and corporate banking business.

The QNB was the first commercial bank in Qatar to offer Islamic banking products and its QNB Al Islami division enjoyed a successful 2006. Al Islami saw its total assets exceed the $1.6 billion mark, representing a 157 per cent lift on 2005's figures. Its total financing activities saw a 378 per cent gain, while a further $934 million was added to customer deposits and unrestricted investment accounts.

But the Al Islami division was only launched midway through 2005 after the Qatar Central Bank gave its approval to commercial banks entering the Islamic banking sector. So statistical comparisons to 2005 are somewhat hollow, but the $20.6 million year end profit signifies steady forward progress.

Further development of the bank's Islamic banking wing will surely follow in 2007 following the opening, just last month, of a string of new Al Islami branches. These will be located in Al Wakrah, Al Gharrafa, Al Rayan, Al Khor and the Qatar National Olympic Committee building. Each branch will offer a range of shariah compliant products, from current accounts to project finance, to both Qataris and expatriates.

Banking on overseas expansion

The QNB's pro-active stance with building up its Islamic banking segment simply mirrors the institution's keenness to widen its international network. In January, the bank received approval from the Central Bank of Oman to open a full service branch in Muscat. This will be the fifth QNB branch outside Qatar after the UK, France, Yemen and Kuwait, which gave its approval towards the end of 2006.

The bank also set up a representative office in Singapore last summer, which, it claims, will give it access to other Asian markets such as Thailand, Vietnam, Malaysia, Pakistan, Nepal and India. The bank retains similar offices in Iran and Libya.

The bank's ambition to enhance its reach overseas is also aided appreciably by its wholly owned private banking and wealth management subsidiary, the London based Ansbacher Group, which operates in several countries including the UK, Switzerland and the Bahamas. But, since being taken over by the QNB in 2004, Ansbacher has also turned its gaze on to the Middle East, opening offices in the Dubai International Financial Centre and the Qatar Financial Centre, targeting local high net worth individuals and institutions.

The QNB can put part of its impressive showing in 2006 down to the popularity of a wide range of its products with both corporate and individual customers. For instance, the bank targeted the former with the release of two Al Watani investment funds, while, for the latter, it introduced a new flexible mortgage scheme and it widened its array of SME loans. On the release of the bank's financial results, Chairman Yousef Hussain Kamal said '2006 was QNB's year': if the bank can continue its successful growth strategy, one wonders what 2007 will bring.