Al Khaliji Reports a Net Profit of QAR 454 Million for Q3, 2017

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Al Khalij Commercial Bank (al khaliji) P.Q.S.C., announced its financial results for the nine months to September 30, 2017, reporting a Net Profit of QAR 454 million. This was driven by strong growth of 7% in operating income, effective cost management leading to lower operating expenses and continued prudent provisioning on the credit and investment portfolios.

His Excellency Sheikh Hamad Bin Faisal Bin Thani Al Thani, Chairman and Managing Director stated:

"Al Khaliji has delivered a solid performance to the end of September which reflects the resilience of our business model and strength of the Qatar economy. The results are underpinned by strong liquidity, diversified sources of funding and sound capitalization. The outcome is due to increasing cohesion and co-operation across all divisions, and employees, of the bank. Al Khaliji is well positioned to deliver sustainable results into the future." 

Commenting on the year to date performance, Fahad Al Khalifa, Al Khaliji's Group Chief Executive Officer said:

"Our results for the nine months to September 30, 2017 reflect our Qatar centric strategy and the continued strength of the local economy. We have taken the steps necessary to navigate the challenging circumstances and ensure revenue growth, prudently manage our loan portfolio, and at the same time further strengthening our funding base. 

Our Net Interest Income (NII) at QAR 751 million for the period shows growth of 12% year on year. We achieved this by continued focus on margins across the Group.  

We continue to maintain strong control of our operating costs, resulting in an improved efficiency ratio of 27.4% at end September 2017, compared to 30.7% for the same period last year. As a result, our operating profit before impairment charges was higher by 12% compared to September 30, 2016. 

We retain our focus on all risks including credit risk.  We continue to prudently take credit impairments resulting in a pragmatic approach to building provisions. This is reflected in higher impairment charges of QAR 220 million to September 30, 2017. 

The growth in operating income, coupled with our effective cost management has resulted in a Net Profit of QAR 454 million, an increase of 7% on the same period last year.  

We continued to grow our local loan book, with loans and advances increasing by 2.1% compared to June 2017. Our customer deposits at QAR 32.2 billion also grew 8% compared to September 30, 2016. Our Balance Sheet remains strong and liquid with 28% comprising cash and investment securities and a Capital Adequacy Ratio of 16.4%. 

The economy in Qatar remains strong and supporting our domestic economy remains at the heart of our strategy. We will continue to support our clients by working closely with them and providing innovative financial solutions, this will allow us to continue to grow our franchise in Qatar. 

Key highlights - Q3, 2017 results:  

Income Statement 

• Net Profit of QAR 454 million compared to QAR 425 million for the same period in 2016. Our Qatari operations continue to remain the main contributor
• Net operating income of QAR 932 million, an increase of 7% compared to last year
• Net Interest Income of QAR 751 million, an increase of 12% year on year
• Impairment charges of QAR 220 million, reflective of  continued conservative provisioning
• Earnings per share of QAR 1.26, up 7% compared to the same period last year

Balance Sheet

• Total assets at QAR 57.9 billion, with a strong and liquid balance sheet
• Net loans and advances at QAR 35.95 billion an increase of 2% on Q2 2017 as we continue to remain cautiously selective of sectors we lend.
• Deposits at QAR 32.2 billion were up 8% compared to September 30, 2016
• Our liquidity position remains strong with 28% of our balance sheet comprising of cash and investment securities and our Liquidity Coverage Ratio (LCR) significantly higher than minimum regulatory requirements

Capitalization  

The bank's capital adequacy ratio in at Q3, 2017 was 16.4% per Basel III.

   
    Balance Sheet indicators (QAR million)  Q3, 2017  Q3, 2016

    Net loans and advances to customers       35,947    36,281
    Investment securities                     14,410    15,654
    Total assets                              57,988    58,526
    Customers' deposits                       32,207    29,836
    Total equity                               7,249     7,076

    Income statement (QAR million)          Q3, 2017  Q3, 2016
    Net operating income                        932        872
    Operating expenses                          255        268
    Net profit                                  454        425
    Earnings per share                         1.26       1.18

    Group ratios                            Q3, 2017  Q3, 2016
    Efficiency (%)

    Cost : Income                               27.4      30.7
    Loan Quality
    Non-Performing loans (QAR million)         647.5     453.1
    NPL ratio (%)                               1.76%     1.23%
    Coverage Ratio                             124.5%     94.0%
    Capital Management (%)
    Capital adequacy ratio (CAR)                16.4      15.8

For further information on Al Khaliji, please visit http://www.alkhaliji.com  

Investor Relations:
Shabbir Barkat Ali
Group CFO
investor-relations@alkhaliji.com
+974-449-400-00