al khaliji

al khaliji continues on growth path despite global crisis:
QR 487 million net profit in 2011

• Net operating income reached QR 940 million, up 24% from QR 760 million in December 2010
• Net profit up by 14% compared to 2010
• Total assets at QR 27.0 billion, up by 44%, compounded over the last 3 years at over 100%
• Loans, advances and financing activities grew by 56% and reached QR 11.3 billion
• Conventional customer deposits reached QR 12.1 billion, up 55% in 2011
• Earnings per share increased to QR 1.35, compared to QR 1.19 in December 2010

Doha, February 7, 2012 : al khaliji released its consolidated financial statements for the year ended 31 December 2011 today. With Profit before tax over QR 500 million and asset growth up 44%, having more than doubled in 3 years, the Bank affirmed its ability to grow in tough prevailing market conditions.

The Bank show a 14% increase in Net Profit after Tax, which reached QR 487 million in December 2011, up from QR 427 million in 2010

Revenues grew in local and international segments: Qatar’s conventional banking activities contributed to 83% of the net operating income while Al Khaliji France S.A., its wholly owned subsidiary headquartered in Paris, and present in 4 emirates in the UAE, contributed 16%.

Al Khaliji France S.A.’s net profit reached QR 55 million, up by 9% compared to 2010. This growth was achieved while France’s and UAE’s GDPs grew respectively by only 1.6% and 3.3% in 2011.

The consolidated financial statements for the year ended 31 December 2011 were approved by the Board of Directors of al khaliji during its meeting held on 7 February 2012 in Doha, Qatar.

The figures are subject to Qatar Central Bank’s approval.

His Excellency 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% during the year and reached QR 27.0 billion on 31 December 2011, with Al Khaliji France S.A.’s representing 12 percent of the Group’s total assets.

Loans and advances grew by 56% in 2011 to reach QR 11.3 billion on 31 December 2011, funded by equally strong growth in deposits, up 55% in 2011 at QR 12.1 billion. During the same period, deposits in Qatar banking system increased by 19%, and Qatari banks’ loan-to-deposit ratio was at 111%.

With a capital adequacy ratio of 23% and loan-to-deposit ratio at 93%, 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 QR 577 million, is 25% higher than the QR 463 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 QR 120 million, up 19 percent compared to 2010.

Net operating income reached QR 940 million on 31 December 2011, up 24% on 2010, when it was QR 760 million.

Net income from Islamic banking activities of QR 11 million is much lower than 2010’s QR 89 million, owing to al khaliji’s need to comply with Qatar Central Bank’s directive to suspend conventional banks’ Islamic activities.

General and administrative expenses decreased by 7% in 2011 to QR 297 million, compared to QR 320 million in 2010. Commenting on the continuous improvement in the cost to income ratio, which was 40% on 31 December 2011, compared to 52% in 2010, McCall, said:
"Disciplined management helped us reduce our operating expenses while ncreasing efficiency and improving productivity".

Earnings per share (EPS) increased to QR 1.35 compared to QR 1.19 in 2010. Return on average shareholder equity is 9.14%, and return on average assets is 2.02%, compared respectively to 8.46% and 2.21% at 31 December 2010.

On 31 December 2011, non-performing loans and advances (NPLs) amounted to QR 62 million, down from QR 100 million on 31 December 2010. The NPL ratio continues to improve to 0.5%, down from 1.3% in December 2010. In 2011, al khaliji set aside QR 38 million for impairment losses on loans, net of recoveries.

Commenting on the continuous improvement in the quality of the loan book, McCall noted:
"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".

The Board of Directors of al khaliji recommended to the General Assembly of shareholders to approve the distribution of QR 1 per share as cash dividends, which represents 10% of the Bank’s paid-up capital.

al khaliji’s 2011 results come as the Qatar economy withstands the global crisis with prudent economic management, strong growth, and a large public infrastructure and development program.

His Excellency Sheikh Hamad Bin Faisal Al-Thani commented:
"Our house view on the Qatar economy is positive for 2012. We expect Qatar real GDP to grow by 6-8% 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".

His Excellency concluded:
"We extend our gratitude to Qatar leaders and the Qatar Central Bank for the exemplary way in which they have guided our destiny during these challenging economic times".

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