(MENAFN- Gulf Times) Ahlibank posted a net profit of QR631.7mn in 2016 even as the bank saw its balance sheet grow by 18.2% to QR38bn last year.
Last year's net profit is only marginally lower than the QR647.7mn earned in 2015, which the bank said was 'a result of adopting prudence over growth in navigating various economic and regulatory challenges the banking sector is experiencing exacerbated by a decline in world oil and gas prices.
'The balance sheet growth was driven mainly by growth in loans and advances to fund our customers' business activities in Qatar, Ahlibank said.
Liquid assets as a percentage to total assets stood at 27.8% in December 2016 compared with 23.7% in December 2015, despite 'tight liquidity in the region.
Total core funding expanded by 28.8% to reach QR31.1bn last year compared with QR24.1bn in 2015. The funding growth was primarily driven by a 22.7% growth in customer deposits to QR25bn and a 73% growth in stable medium-term funding to QR3.8bn in December 2016.
Stable funding as a percentage to total liabilities improved to 11.6% in December last year vis-à-vis 8.1% in December 2015, Ahlibank said.
Loan-to-deposit ratio improved to 107% as of December 2016 compared to 118% in December 2015 as a 22.7% growth in customer deposits outpaced a loan growth of 11.7%.
Ahlibank's cost-to-income ratio for 2016 remained steady at 30.7%, reflecting efficient management of operating expenses.
Return on average assets (ROAA) and return on average equity (ROAE) stood solid at 1.84% and 13.6% respectively, despite an increase in balance sheet size and equity base.
Non-performing loans ratio (NPL) improved to 0.82% as of December 2016 from 1.24% in December 2015, 'reflecting strong asset quality. Provision coverage grew stronger to 151% from 126% in December 2015, Ahlibank said.
On the full-year results of 2016, Ahlibank chairman and managing director Sheikh Faisal bin Abdul-Aziz bin Jassim al-Thani said, 'We invested in building our brand with improved market visibility, and have created a solid platform to expand our product range. Earlier in the year, the Junior Savings Account product was launched to build longer-term savings, to meet the needs of the emerging youth market, which we see as currently underserved in the Qatar market. In April, the bank successfully completed its $500mn debut fundraising in the international debt capital markets which was 2.4 times oversubscribed 0 to diversify our funding base and increase our visibility in international market. Middle East investors took up the largest share (55%), followed by Asia (20%), UK (15%), Europe (6%) and others (4%). We have further improved the stability of our funding structure as well as positioning ourselves with Basel III requirements to begin the next phase of our growth story.
'Another milestone in the bank's history is Moody's assignment of A2/Prime-1 debut credit ratings to it with stable outlook in February 2016.
The major drivers supporting this rating include Qatar's solid macro profile, strong asset quality, which compares favourably against global peers, improved funding mix, as well as sound capital and profitability metrics. Ahlibank's ratings also factor in the support from Qatari authorities to all banks in the country in case of need.
Sheikh Faisal added, 'The 2022 FIFA World Cup in Qatar is our compass for future direction. Forthcoming infrastructure development will determine the pace of change. Accordingly, we will be rolling out plans to upgrade and overhaul our technology with the view to minimising obsolescence as well as automating our operational processes. We will invest in human capital for sustained performance.
Ahlibank proposes 10% cash dividend
Ahlibank's board of directors has proposed a cash dividend of 10%, which translates into QR1 per share and a bonus dividend of 5% (five new shares for every 100 shares held) as the dividend distribution for the year 2016.
The proposal intends to maximise shareholders' wealth, as well the bank's internal capital requirements and expansion plans, Ahlibank said yesterday.
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