Gross loans at QNB ALAHLI increased by 55% year-to-date and continued to maintain strong asset quality, with a non-performing loans ratio of 2.56% as of December 2016. According to a recent report by QNB ALAHLI, the strong revenue generation capacity combined with prudent risk management resulted in strengthening the coverage ratio, reaching 187% up from 139% in December 2015. QNB ALAHLI generated a consolidated net profit of EGP 4.203m, up by 32% compared to December 2015. Total assets grew by 44% to reach EGP 190.932m. Net banking income increased by 44% year-on-year (y-o-y), compared to overhead expenses growth of 15% y-o-y. Based on this, the efficiency ratio improved to 21% in December 2016 from 27% in December 2015. QNB ALAHLI's total assets increased by 44% to reach EGP 190.932m compared to EGP 132.817m in December 2015, with return on average assets (ROAA) of 2.60% in 2016, compared to 2.70% in December 2015. Gross loans also grew by 55% year-to-date to reach EGP 97.508m, while quarter-to-date growth stood at 37% in the fourth quarter of 2016, with a significant growth in Egyptian pound denominated loans, supported by the appreciation of the foreign currency loans portfolio after the currency flotation in November. Provisioning levels continued to improve resulting in a higher coverage ratio of 187% as of December 2016 compared to 139% at the end of 2015. Deposits grew by 46% from December 2015 to reach EGP 158.144m. The retail segment share stood at 43% of total deposits as of December 2016. QNB ALAHLI's liquidity position remained in line with the growth in the balance sheet with a net loan-to-deposit ratio of 59% as of December 2016. QNB ALAHLI, of which 97.12% is owned by QNB Group, is the second largest private bank in terms of market capitalisation with a market value of EGP 27.648m as of the end of 2016. The bank's capital base amounted to EGP 17.115m. Due to the strong capitalization, QNB ALAHLI was able to withstand the impact of the inflated risk-weighted asset (RWA) following the local currency devaluation. As of December 2016, the capital adequacy ratio (CAR) & Tier 1 ratios stood at 10.85% and 9.70% respectively, noting the exclusion of the potential impact of 2016 earnings appropriation as per the Central Bank of Egypt (CBE) rules, which is above the minimum required of 10.625% and 6.625%, respectively. Net interest income grew by 44% y-o-y, and +15% compared to the third quarter in 2016, driven by increase in interest earning assets and improved net interest margin (NIM4) which reached 5.28% by the end of 2016 up 59 basis points compared to December 2015. Net fees and commissions reached EGP 1.362m for 2016, up 13%, compared to EGP 1.209m for 2015, and 21% growth quarter-on-quarter. Other operating income reached EGP 1.214m, up by 122% compared to EGP 548m for 2015. Net banking income for 2016 stood at EGP 9.646m, increasing 44% y-o-y, and 43% quarter-on-quarter. Consolidated operating expenses reached EGP 2.073m for 2016—an overall increase of 15% y-o-y that was driven by organic growth and continued investment in infrastructure development to further enhance service delivery and customer experience. Given stronger revenue growth and controlled growth of expenditure, the cost-to-income ratio improved by around 600 basis points from 27% for 2015 to 21% for 2016. QNB ALAHLI's gross operating income reached EGP 7.573m for 2016, up 55% compared to the same period last year, and up 50% quarter-on-quarter. Maintaining a conservative approach to risk management, the coverage level was further enhanced to take care of unforeseen risks associated with shifts in the fiscal or monetary policies on the quality of the credit portfolio. Overall net cost of risk recorded EGP 1.978m at the end of 2016, compared to EGP 661m at the end of 2015. Income tax charge for that period increased by 36%, driven by higher taxable revenue growth. QNB ALAHLI recorded a net profit of EGP 4.203m for 2016—an increase of 32% y-o-y.
