Banks and financial institutions, which got their balance-sheets cleansed on the back of sovereign support, presented a healthy trend with its cumulative net profits rising by a healthy 25% in 2010 compared with a flat path the previous year.
The lenders segment, which has reported double-digit growth in their net profits, has by and large had a similar pattern regarding their operating income, according to data collated from the Qatar Exchange website. The listed banks’ total assets stood at QR477.33bn in 2010 with QNB alone contributing QR223.38bn.
QNB, the country’s largest lender by assets, reported a 35.71% growth in their net profit in 2010 (against 15.07% in 2009), followed by Commercialbank 7.89% (-10.59%), Doha Bank 8.25% (2.11%), Qatar Islamic Bank 0.76% (-19.51%), Ahlibank 36.67% (-30.23%), International Islamic 9.80% (2%), Masraf Al Rayan 37.50% (-4.35%) and al khaliji 152.94% (70%).
In 2010, QNB had reported a 34.45% jump in its operating income, followed by Commercialbank (-7.91%), Doha Bank (2.94%), Qatar Islamic Bank (-2.08%), Ahlibank (35.29%), International Islamic (13.54%), Masraf Al Rayan (23.57%) and al khaliji (46.15%). Within the operational parameters, QNB reported a 23.47% growth in interest income, followed by al khaliji 24.59% and Doha Bank 2.22%; while Commercialbank’s fell 2.75% and Ahlibank treaded a flat path.
In the case of Islamic lenders, Qatar Islamic Bank’s finance income was up 2.20%; followed by International Islamic (10.26%) and Masraf Al Rayan (50%).
In the case of net fee and commission income, QNB registered 15.46% rise; followed by Qatar Islamic Bank (11.54%); International Islamic (12.50%), whereas Commercialbank’s fell 22.06%; followed by Doha Bank (4.88%); Ahlibank (30.77%); Masraf Al Rayan (47.37%) and al khaliji (9.09%).
The robust growth in net profitability and operating income of lenders, which is the underlying sector or has direct link to the economy, comes amidst growth in net impairment on loans and the concomitant rise in provisioning.
QNB reported QR537.66mn net impairment losses on loans and advances in 2010 (compared to QR281.11mn year ago); followed by Doha Bank QR311.84mn (QR126.31mn); Commercialbank QR166.52mn (QR461.05mn) and International Islamic QR16.06mn (QR16.50mn).
Qatar Islamic Bank has made a higher provision of QR49.98mn towards impairment of due from financing (against QR31.08mn in 2009) and Ahlibank has made a provision of QR50.27mn towards collective impairment on loans and advances (QR2mn). Amid apprehensions that the bottom lines could take a hit this year, particularly due to the Qatar Central Bank’s (QCB) decision to curtail Islamic windows, commercial banks are now re-jigging their strategies to explore and shore up other sources of earnings.
“The successful bid, which was announced in December, has changed the entire dynamics in the banking industry. There are short-term concerns (due to the QCB directive) but in the long run, the potentials outweigh, considering that the country is expenditure-driven; given the fact that almost saturation point has been reached in the hydrocarbon sector,” an analyst with one of the banks told Gulf Times.