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Satyendra Pathak
Qatar National Bank (QNB) Group played a vital role in the implementation of the government’s stimulus package to enhance economic activities such as deferring some loan payments and boosting concessional financing for small and medium-sized enterprises, the bank’s chairman said on Sunday.
Addressing shareholders at the bank’s Ordinary General Assembly meeting on Sunday, QNB Group Chairman HE Ali Shareef Al Emadi said, “QNB worked tirelessly to adjust to the new reality. We protected the bank from potential risks and service disruptions. At the same time, we assumed our market-leading role by supporting our customers and communities where we operate to overcome these challenges.’’
In a statement issued as part of the QNB annual report for 2020, Emadi said, “The year 2020 witnessed important developments stemming from the exceptional aftermath of COVID-19 that negatively impacted countries around the world. Global supply chains were disrupted, with aggregate demand coming to a standstill. The negative demand shock from the pandemic pushed commodity prices, including oil, to multi-decade lows.”
However, he said, the Group has been able to address these challenges and keep our longstanding commitment to its shareholders, customers and communities to get back on a strong recovery path.
“Our robust governance framework ensured the continuation of our business. QNB focused on cementing the philosophy of corporate governance into all its practices. Our prudent approach to risk management allowed us to maintain the high quality of our portfolio, maintain business continuity across our operations and to protect QNB Group against increased cybersecurity threats. We took conservative and precautionary measures to shield the Group from further volatility that may originate from the uncertainty of the ongoing pandemic,” he said.
“Developments during 2020 have accelerated trends in shifting customer behaviours from physical to remote channels, requiring creativity to leapfrog and adjust to new realities. We saw it as a necessity to create new experiences through digitisation and automation across all channels. With this in mind, we kept innovation and efficiency at the top of our agenda as we responded to the crisis. This allowed us to explore new sources of revenue and reduce our operating costs, positively impacting the bottom-line,” he said.
“This year confirmed our long-held conviction that banking is more than just acting as a financial intermediary. We need to continuously think about what we can deliver beyond profit, ensuring that we protect our customers, our employees, our community and our environment,” he said.
“With this in mind, we aim to create meaningful impact and deliver long-term value for all our stakeholders through our focus on sustainability. The pandemic has made clear that sustainability is not just a trend, but rather a strategic imperative of our responsibility towards the environment we operate in,” Emadi said.
During 2020, he said, QNB Group demonstrated resilience in times of uncertainty, with a robust net profit of QR12 billion and the Group’s operating income increased by 1 percent to QR25.4 billion.
“As a result, QNB has been able to consolidate its position as one of the world’s top 40 banks in terms of market capitalisation, reaching QR164.7 billion,” he said.
Looking ahead, he said, the Group’s strategy to become a leading MEASEA bank has not changed.
“Our long-term goal of sustainable, profitable growth remains. Our strategy is based on positioning the bank for future growth opportunities by focusing on two key pillars: protecting our market-leading position in Qatar and continuing our international growth,” he said.
In another statement, QNB Group Chief Executive Officer Abdulla Mubarak Al Khalifa said, “Considering the global economic conditions, QNB Group, following its conservative approach towards building adequate reserves against potential loan losses, opted to increase loan loss provisions by QR2.6 billion. This assisted in protecting the group from any adverse impacts to the portfolio.”
To cushion the impact on the bottom line from the pandemic, Khalifa said, the bank conducted an operational rationalisation exercise throughout the Group to improve our operating efficiency and reduce our expenses.
“This helped reduce the cost-to-income ratio from 25.9 percent last year to 24.3 percent,” he said.
“On the funding side, we put all efforts and commendably managed our liquidity position during this difficult period. We were able to leverage our existing relationships and access new sources of funding. In May, we were the first institution in the MENA region to re-open the corporate bond market after the global outbreak of the pandemic. In October, we issued our first green bond at the London Stock Exchange,” he said.
“In November, we successfully closed the syndication of a dual-tranche $3.5 billion unsecured term loan facility. This is a reflection of the strong demand from top-tier global banks to continue to partner with QNB and the investor community’s confidence in our strategy and strength of our financial position,” he said.
“Together with the strength of our brand, customer relationships and loan book, we successfully maintained our top-tier credit ratings from leading international rating agencies,” he said.
“Next year, we will continue to operate in a challenging environment. Nevertheless, we are optimistic that we already entered a recovery path. Although the COVID-19 pandemic has accelerated some ongoing trends in banking, we will need to continue to adapt to this ‘new normal’. We remain committed to our strategy to become a leading MEASEA bank,” he said.
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