Banking Sector Review Results & Performance 2003 HEAD OFFICE Qatar National Bank SAQ, P O Box 1000 Doha, Qatar Tel. (+974) 440 7407 Fax (+974) 441 3753 E-mail ccsupport@qatarbank.com www.qnb.com.qa UNITED KINGDOM General Manager - Charles Brodie 51 Grosvenor Street, London W1K 3HH Tel. (+44) 207 647 2600, Fax (+44) 207 647 2647 E-mail charles.brodie@qnb.co.uk FRANCE General Manager - Luc Debieuvre 58 Avenue d Iena, 75116 Paris Tel. (+33) 1 53 23 00 77, Fax (+33) 1 53 23 00 70 E-mail luc.debieuvre@qnbparis.com
Contents Qatar National Bank Heralding a New Era Highlights of 2003 Results Year 2003 Achievements 2 3 4 Qatari Banking Sector Highlights of 2003 Results: Balance Sheet Highlights of 2003 Results: Shareholders Equity Highlights of 2003 Results: Profitability (1999-2003) Assets Loans & Advances Customer Deposits Total Shareholders Equity Net Profit 5 6 6 7 8 9 10 11 Doha Securities Market Market Capitalisation DSM Index 12 12 1
QNB: Heralding a New Era The Year 2004 marks QNB s 40 years of service to the community. Heralding a new era, QNB launched a dynamic new look that effectively reflects its current growth, prosperity, community support, and also its focused approach and vision for the future. Five-Year Performance Summary Net profit increased by 41.8% from QR452.1 million in 1999 to QR641.1 million in 2003. Return on Average Equity increased from 12.1% in 1999 to 15.1% in 2003. Earnings per share, on diluted bases, increased from QR4.4 in 1999 to QR6.2 in 2003. Share price, on diluted bases, increased from QR54.0 in 1999 to QR126.9 in 2003. Maintained a steady, well controlled and improved efficiency ratio (costs to income) at 26.5% in 2003 compared to 28.1% in 1999. Growth in Delivery Channels The domestic branch network increased by 7 branches to 33 in 2003 from 26 in 1999, with extended operating hours at various locations, including shopping malls and the airport. The Bank was the first to establish a 24-hour Call Center and operates the only fully automated 24-hour self-service e-branch in Qatar. The ATM network increased from 38 in 1999 to 66 in 2003, with enhanced functionality. QNB s PC banking platform al-watani.com was migrated to the internet to enable customers to access their accounts from anywhere in the world. Highlights of QNB s 2003 Year-End Results Net profit up by 10.5% to QR641.1 million ($176.1 million) from QR580.2 million in 2002. Total income increased by QR73.4 million (7.4%) to QR1,059.6 million. Total assets grew by QR3.7 billion (12.0%) to QR34.8 billion. Deposits up by QR500 million (2.1%) to QR24.1 billion. Loans and advances up by QR3.2 billion (16.0%) to QR23.1 billion. Shareholders funds increased by 12.6% to total QR5.6 billion ($1.5 billion). Return on Average Equity up from 14.0% in 2002 to 15.1% in 2003. Risk Asset Ratio of 30% compared to Qatar Central Bank & Basle stipulations of 10% and 8%, respectively. Earnings per share up from QR5.6 to QR6.2. Improved Efficiency ratio (costs to income) of 26.5% (2002: 26.9%). Total Assets Net Profit 2 3
QNB : Year 2003 Achievements Ratings QNB is the highest rated bank in Qatar and is currently rated by Moody s, Capital Intelligence and Fitch. Moody s was the most recent to raise QNB s ratings, and in December 2003 raised the outlook for QNB s D+ financial strength rating from stable to positive. QNB s ratings are shown in the table below. Agency Long-Term Short-Term Financial Strength/ Individual Moody s A3 P-2 D+ Capital Intelligence A- A2 A- Fitch A- F2 B/C Awards QNB s leading role in the Qatari banking sector, its emphasis on superior customer service, and the increasing range of products and services via multiple delivery channels were prime reasons for the selection of QNB over the past several years as the Best Bank in Qatar from leading publications. These included: The Banker, Euromoney, Global Finance and Banker Middle East. Additional Awards in 2004 included Trade Finance Deal of the Year Award, and Best Foreign Exchange Bank and Providers by Global Finance. Qatari Banking Sector : Highlights of 2003 Results Balance sheet Total Assets Banking Sector: increased by QR11.3 billion (18.0%) to QR74.2 billion. Qatari Banks: increased by QR10.4 billion (18.5%) to QR66.4 billion. Foreign Banks: increased by QR0.9 billion (13.9%) to QR7.8 billion. Loans and Advances Banking Sector: increased by QR7.5 billion (20.5%) to QR44.0 billion. Qatari Banks: increased by QR6.9 billion (20.9%) to QR40.0 billion. Foreign Banks: increased by QR0.6 billion (16.4%) to QR4.0 billion. Customer Deposits Banking Sector: increased by QR6.1 billion (12.4%) to QR55.3 billion. Qatari Banks: increased by QR5.3 billion (12.2%) to QR49.0 billion. Foreign Banks: increased by QR0.8 billion (13.7%) to QR6.3 billion. Branch and ATM Network QNB operates the largest distribution network and by the end of 2003 had 33 domestic branches and offices, along with 66 ATM s. Customer Deposits Loans & Advances 4 5
Qatari Banking Sector : Highlights of 2003 Results Shareholders Equity Banking Sector: up by QR2,029 million (23.5%) to QR10,648 million. Qatari Banks: up by QR1,887 million (23.8%) to QR9,800 million. Foreign Banks: up by QR143 million (20.2%) to QR849 million. Shareholders equity to assets ratio for the sector as a whole stood at 14.3%, with the ratio of Qatari banks at 14.8% and that for foreign banks at 10.8%. Profitability Banking Sector: up by QR354.8 million (27.5%) to QR1,645.5 million. Qatari Banks: up by QR306.1 million (27.4%) to QR1,423.5 million. Foreign Banks: up by QR48.7 million (28.1%) to QR222.0 million. Return on Average Assets for the sector stood at 2.40% in 2003 and averaged 1.95% during 1999-2003. Return on Average Equity for the sector stood at 17.08% in 2003 and averaged 14.03% during 1999-2003. Assets Qatar National Bank 22,356 24,621 28,391 31,056 34,789 Doha Bank 5,064 5,512 6,505 7,408 9,057 Commercialbank 4,641 5,066 5,208 6,141 8,785 Qatar Islamic Bank 3,983 4,059 4,410 4,766 5,598 Al-Ahli Bank of Qatar 2,667 2,623 2,115 2,155 2,545 Qatar International Islamic Bank 1,840 2,098 2,700 3,040 3,907 Grindlays Qatar Bank --- --- 1,043 1,140 1,335 Qatar Industrial Development Bank 246 279 255 287 358 HSBC 2,003 2,334 2,146 2,292 2,683 Arab Bank 1,606 1,518 1,547 1,677 1,842 BNP Paribas 737 968 820 942 947 Standard Chartered 714 698 841 946 1,027 Mashreqbank 433 441 378 598 888 United Bank Limited 256 257 260 262 271 Bank Saderat Iran 132 161 199 193 208 Total Shareholders Equity Total 46,680 50,634 56,819 62,902 74,239 Qatari Banks 40,798 44,257 50,628 55,993 66,373 Foreign Banks 5,881 6,377 6,191 6,909 7,866 6 7
Loans & Advances Customer Deposits Qatar National Bank 14,496 13,691 18,949 19,953 23,141 Doha Bank 2,719 2,810 3,305 4,136 4,857 Commercialbank 2,284 2,429 2,730 3,372 4,655 Qatar Islamic Bank 3,133 3,423 3,528 2,496 3,300 Al-Ahli Bank of Qatar 1,328 1,216 1,063 1,043 1,256 Qatar International Islamic Bank 1,599 1,841 2,382 1,466 2,058 Grindlays Qatar Bank --- --- 456 595 698 Qatar Industrial Development Bank 13 24 29 36 53 HSBC 1,211 1,412 1,300 1,316 1,482 Arab Bank 761 548 611 761 824 BNP Paribas 428 476 392 341 327 Standard Chartered 391 413 468 484 576 Mashreqbank 277 275 237 364 564 United Bank 71 76 58 54 111 Bank Saderat Iran 69 79 105 116 116 Total 28,780 28,712 35,614 36,536 44,021 Qatari Banks 25,573 25,433 32,442 33,099 40,020 Qatar National Bank 12,778 18,169 21,390 23,600 24,100 Doha Bank 3,815 4,546 5,490 6,278 7,427 Commercialbank 3,319 3,559 3,646 4,390 6,272 Qatar Islamic Bank 3,285 3,315 3,649 4,113 4,763 Al-Ahli Bank of Qatar 2,128 2,265 1,784 1,569 1,796 Qatar International Islamic Bank 1,526 1,648 2,208 2,696 3,465 Grindlays Qatar Bank --- --- 904 968 1,130 HSBC 1,732 1,988 1,826 1,788 2,051 Arab Bank 1,371 1,340 1,354 1,473 1,638 BNP Paribas 365 555 650 702 771 Standard Chartered 438 485 678 793 830 Mashreqbank 313 318 269 426 651 United Bank 199 228 232 232 217 Bank Saderat Iran 90 110 145 132 151 Total 31,358 38,562 44,226 49,159 55,262 Qatari Banks 26,851 33,538 39,072 43,613 48,953 Foreign Banks 4,507 5,023 5,154 5,546 6,308 Foreign Banks 3,207 3,279 3,172 3,437 4,001 8 9
Total Shareholders Equity Net Profit Qatar National Bank 4,063 4,335 4,714 4,981 5,608 Doha Bank 486 512 679 819 1,120 Commercialbank 577 561 667 787 1,411 Qatar Islamic Bank 339 335 372 422 542 Al-Ahli Bank of Qatar 286 184 206 252 322 Qatar International Islamic Bank 149 174 206 242 313 Grindlays Qatar Bank --- --- 108 144 175 Qatar Industrial Development Bank 165 224 247 268 309 HSBC 173 149 200 214 269 Arab Bank 56 64 79 79 79 BNP Paribas 90 109 114 128 111 Standard Chartered 54 61 63 82 115 Mashreqbank 82 100 94 127 177 United Bank Limited 30 26 27 29 50 Bank Saderat Iran 30 39 44 48 49 Total 6,580 6,872 7,821 8,619 10,648 Qatari Banks 6,064 6,325 7,200 7,913 9,800 Foreign Banks 516 547 621 706 849 Qatar National Bank 452.1 491.0 527.3 580.2 641.1 Doha Bank 96.7 64.9 70.7 121.0 214.6 Commercialbank 98.0 56.3 101.1 158.8 248.0 Qatar Islamic Bank 55.9 39.5 67.1 100.9 145.0 Al-Ahli Bank of Qatar 52.9-101.8 0.0 64.1 72.6 Qatar International Islamic Bank 29.0 34.0 41.7 50.6 64.4 Grindlays Qatar Bank --- --- 33.4 35.9 32.1 Qatar Industrial Development Bank 4.3 8.5 10.0 5.8 5.7 HSBC 48.7 7.5 65.7 71.8 82.4 Arab Bank 15.3 15.2 14.6 25.3 25.9 BNP Paribas 8.9 9.5 15.0 14.2 11.4 Standard Chartered 9.1 11.5-2.8 19.3 39.4 Mashreqbank 10.7 17.8 18.3 33.1 50.0 United Bank Limited 4.8 0.2 1.0 2.5 4.6 Bank Saderat Iran 6.0 9.1 5.0 7.1 8.4 Total 892.5 663.3 968.1 1,290.7 1,645.5 Qatari Banks 789.0 592.5 851.3 1,117.4 1,423.5 Foreign Banks 103.5 70.8 116.8 173.3 222.0 Note: Foreign Banks Net Profit on after tax basis. 10 11
Doha Securities Market Market Capitalisation As at May 31, 2004 DSM Index 1999 2000 2001 2002 2003 May 31, 2004 DSM Index 1,341.00 1,233.30 1,692.20 2,323.84 3,946.70 5,566.89 % Change during year -0.76% -8.03% 37.21% 37.33% 69.83% 41.05% 12