contentsqnb continues to be the highest rated bank in qatar and is currently rated by moody’s,...

Contents

Qatar National Bank

Hand in Hand with the Nation’s Progress 2

Highlights of 2004 Results 3

Year 2004 Achievements 4

Qatari Banking Sector

Highlights of 2004 Results: Balance Sheet 5

Highlights of 2004 Results: Shareholders’ Equity 6

Highlights of 2004 Results: Profitability 6

Comparative Statistics (2000 - 2004)

Assets 7

Loans & Advances 8

Customer Deposits 9

Total Shareholders’ Equity 10

Net Profit 11

Doha Securities Market

Market Capitalisation 12

DSM Index 12

Banking Sector Review 2

QNB: Hand in Hand with the Nation’s Progress

The Year 2004 marks QNB’s 40th year of going forward, hand in hand with the Nation’s progress. QNB steadily continues in its role as Qatar’s leading financial institution by taking part and supporting key projects and events, while also going forward by making its foray into the regional banking arena.

Five-Year Performance Summary

- Net profit increased by 66.0% from QR491.0 million in 2000 to QR815.0 million in 2004.- Return on Average Equity increased from 12.6% in 2000 to 18.6% in 2004.- Earnings per share increased from QR4.7 in 2000 to QR7.9 in 2004.- Dividend per share increased from QR3.5 in 2000 to QR6.0 in 2004 - Share price increased from QR45.0 in 2000 to QR199.7 in 2004.- Market Capitalisation increased from QR4.7 billion in 2000 to QR20.7 billion in 2004. - Efficiency ratio improved from 28.3 % in 2000 to 26.5% in 2004.

Growth in Delivery Channels

QNB has the largest retail banking network in Qatar, consisting of 31 branches and offices and 72 ATM’s located at strategic and convenient points across the country.

QNB’s leading role in community development saw the opening of the new Qatar Foundation Branch, in the Education City in 2004, to cater to the needs of the student community.

QNB maintains its prominent role as a major financer and lead arranger for key infrastructrure, industrial and other projects in Qatar, while expanding its project finance expertise in the region. Total Assets


Highlights of QNB’s 2004 Year-End Results

Net profit up by 27.1% to QR815.0 million ($223.9 million) from QR641.1 million in 2003.

Other income increased by QR81.8 million (40.5%) to QR283.7 million.

Total assets grew by QR4.6 billion (13.7%) to QR39.4 billion.

Deposits up by QR5.5 billion (22.9%) to QR29.6 billion.

Loans and advances up by QR3.3 billion (14.3%) to QR26.4 billion.

Shareholders’ funds increased by 16.5% to total QR6.5 billion ($1.8 billion).

Return on Average Equity up from 15.1% in 2003 to 18.6% in 2004.

Capital Adequacy Ratio of 22% compared to Qatar Central Bank & Basle stipulations of 10% and 8%, respectively.

Earnings per share up from QR6.2 in 2003 to QR7.9 in 2004.

Well maintained efficiency ratio (costs to income) of 26.5% in 2004.

Net Profit


QNB : Year 2004 Achievements

Ratings

QNB continues to be 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 2004 raised the financial strength rating from D+ to C-, with a stable outlook. Capital Intelligence currently assigns to QNB a long-term rating of A- and a short-term rating of A2, which is the highest given to any bank in Qatar. Similarly, Fitch has given QNB a long-term rating of A-. QNB’s ratings are shown in the table below.

Agency Long-Term Short-Term Financial Strength/ Individual

Moody’s A3 P-2 C-Capital Intelligence A- A2 A-Fitch A- F2 B/C

Awards In 2004, QNB was once again crowned as the ‘Best Bank in Qatar’ by Euromoney for the eighth year, and by Global Finance for the sixth consecutive year. In addition, QNB was given the ‘Best Retail Bank’ and ‘Best Corporate Bank’ awards for 2004, by the Banker Middle East publication.

International and Regional Expansion

QNB set a precedent for other financial institutions in the region with the acquisition in 2004 of Ansbacher Holdings, a London-based wealth management group. In 2004, QNB received a licence to operate a new representative office in Iran, and entered into a joint venture to establish a bank in Syria.

Customer Deposits


Qatari Banking Sector : Highlights of 2004 Results

Balance sheet

Total Assets

Banking Sector: increased by QR18.4 billion (24.7%) to QR92.6 billion. Qatari Banks: increased by QR16.1 billion (24.3%) to QR82.5 billion. Foreign Banks: increased by QR2.3 billion (28.3%) to QR10.1 billion.

Loans and Advances


Customer Deposits


Loans & Advances


Qatari Banking Sector : Highlights of 2004 Results

Shareholders’ Equity

Banking Sector: up by QR4,681 million (43.8%) to QR15,355 million.Qatari Banks: up by QR4,338 million (44.3%) to QR14,137 million.Foreign Banks: up by QR342 million (39.1%) to QR1,217 million.

Shareholders’ equity to assets ratio for the sector as a whole stood at 16.6%, with the ratio of Qatari banks at 17.1% and that for foreign banks at 12.1%. Profitability

Banking Sector: up by QR633.9 million (38.5%) to QR2,279.4 million.Qatari Banks: up by QR579.0 million (40.7%) to QR2,002.5 million.Foreign Banks: up by QR54.9 million (24.7%) to QR276.9 million.

Return on Average Assets for the sector stood at 2.73% in 2004, compared to 2.40% in 2003.

Return on Average Equity for the sector stood at 17.5% in 2004, compared to 17.1% in 2003.

Total Shareholders’ Equity


Comparative Statistics

Assets

(QR Million) 2000 2001 2002 2003 2004

Qatar National Bank 24,621 28,391 31,056 34,789 39,398

Doha Bank 5,512 6,505 7,408 9,057 10,944

Commercialbank 5,066 5,208 6,141 8,785 12,888

Qatar Islamic Bank 4,059 4,410 4,766 5,598 7,687

ahlibank 2,623 2,115 2,155 2,545 4,270

Qatar International Islamic Bank 2,098 2,700 3,040 3,907 4,962

International Bank of Qatar --- 1,043 1,140 1,335 2,000

Qatar Industrial Development Bank 279 255 287 358 351

HSBC 2,334 2,146 2,292 2,683 3,078

Arab Bank 1,518 1,547 1,677 1,821 2,130

BNP Paribas 968 820 942 947 1,650

Standard Chartered 698 841 946 1,027 1,392

Mashreqbank 441 378 598 888 1,264

United Bank Limited 257 260 262 271 311

Bank Saderat Iran 161 199 193 208 265

Total Sector 50,634 56,819 62,902 74,218 92,591

Qatari Banks 44,257 50,628 55,993 66,373 82,501

Foreign Banks 6,377 6,191 6,909 7,845 10,090

Source: Banks’ Annual Reports and published information.



Loans & Advances

(QR Million) 2000 2001 2002 2003 2004


Doha Bank 2,810 3,305 4,136 4,827 5,388

Commercialbank 2,429 2,730 3,372 4,655 6,662


ahlibank 1,216 1,063 1,043 1,256 1,430


International Bank of Qatar --- 456 595 698 1,000


HSBC 1,412 1,300 1,316 1,482 1,614

Arab Bank 548 611 761 802 1,087

BNP Paribas 476 392 341 327 672

Standard Chartered 413 468 484 576 609

Mashreqbank 275 237 364 564 695

United Bank 76 58 54 111 143


Total Sector 28,712 35,614 36,536 43,969 52,751

Qatari Banks 25,433 32,442 33,099 39,990 47,778

Foreign Banks 3,279 3,172 3,437 3,979 4,972




Customer Deposits

(QR Million) 2000 2001 2002 2003 2004


Doha Bank 4,546 5,490 6,278 7,427 8,068

Commercialbank 3,559 3,646 4,390 6,272 8,304


ahlibank 2,265 1,784 1,569 1,796 2,744


International Bank of Qatar --- 904 968 1,130 1,509

HSBC 1,988 1,826 1,788 2,051 2,387

Arab Bank 1,340 1,354 1,473 1,638 1,700

BNP Paribas 555 650 702 771 1,114

Standard Chartered 485 678 793 830 1,039

Mashreqbank 318 269 426 651 870

United Bank 228 232 232 217 247


Total Sector 38,562 44,226 49,159 55,262 67,926

Qatari Banks 33,538 39,072 43,613 48,953 60,371

Foreign Banks 5,023 5,154 5,546 6,308 7,555


Banking Sector Review10


Total Shareholders’ Equity

(QR Million) 2000 2001 2002 2003 2004


Doha Bank 512 679 819 1,120 1,546

Commercialbank 561 667 787 1,411 2,568

Qatar Islamic Bank 335 372 422 542 1,462

ahlibank 184 206 252 322 875

Qatar International Islamic Bank 174 206 242 313 438

International Bank of Qatar --- 108 144 175 382


HSBC 149 200 214 269 318

Arab Bank 64 79 79 105 178

BNP Paribas 109 114 128 111 115

Standard Chartered 61 63 82 115 156

Mashreqbank 100 94 127 177 333

United Bank Limited 26 27 29 50 61


Total Sector 6,872 7,821 8,619 10,674 15,355

Qatari Banks 6,325 7,200 7,913 9,799 14,137

Foreign Banks 547 621 706 875 1,217




Net Profit

(QR Million) 2000 2001 2002 2003 2004

Qatar National Bank 491.0 527.3 580.2 641.1 815.0

Doha Bank 64.9 70.7 121.0 214.6 365.6

Commercialbank 56.3 101.1 158.8 248.0 326.7

Qatar Islamic Bank 39.5 67.1 100.9 145.0 288.4

ahlibank -101.8 0.0 64.1 72.6 82.8

Qatar International Islamic Bank 34.0 41.7 50.6 64.4 83.9

International Bank of Qatar --- 33.4 35.9 32.1 32.8

Qatar Industrial Development Bank 8.5 10.0 5.8 5.7 7.2

HSBC 7.5 65.7 71.8 82.4 108.5

Arab Bank 15.2 14.6 25.3 25.9 36.7

BNP Paribas 9.5 15.0 14.2 11.4 15.2

Standard Chartered 11.5 -2.8 19.3 39.4 41.1

Mashreqbank 17.8 18.3 33.1 50.0 55.9

United Bank Limited 0.2 1.0 2.5 4.6 10.9

Bank Saderat Iran 9.1 5.0 7.1 8.4 8.7

Total Sector 663.3 968.1 1,290.7 1,645.5 2,279.4

Qatari Banks 592.5 851.3 1,117.4 1,423.5 2,002.5

Foreign Banks 70.8 116.8 173.3 222.0 276.9


Note: Foreign Banks’ Net Profit on after tax basis.

Banking Sector Review12

Doha Securities Market

Market Capitalisation

As at May 31, 2005

DSM Index

2001 2002 2003 2004 QI 2005May 31,

2005

DSM Index 1,692.20 2,323.84 3,946.70 6,493.62 10,499.26 9,078.04

% Change during year 37.21% 37.33% 69.83% 64.53% 61.68% 39.80%

% of Total

contentsqnb continues to be the highest rated bank in qatar and is currently rated by moody’s,...

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