Al Ahli Bank Net Profit Rises 4% to QR665.56 Million in 2018

January 31, 2019

Profit: Ahli Bank announced its results for 2018, showing a rise in profits by about 4%, standing at about QR665.6 million, compared to QR639.7 million in 2017. Profit realized in the fourth quarter of 2018 amounted to QR 127.8, compared to QR121.5 million for the same period in 2017, up by 5.2%.
 
 Earnings per share: Earnings per share amounted to QR 3.16 in 2018, compared to QR3.04 in 2017.
 
 Comprehensive Income: Total comprehensive income stood at QR 658.0 million at the end of 2018, compared to QR 640.4 million at the end of 2017. The statement of comprehensive income shows the bank incurred loss worth QR7.42 million on evaluation of financial instruments.

Application of IFRS9: In 2018, the Bank implemented the Financial Standard IFRS 9, increasing the provisions for the expected credit losses in 2018 to QR 126.2 million, compared to QR 66.7 million at the end of 2017, up by QR 59.5 million.
 
Assets: The assets amounted to QR 40.4 million at the end of 2018, compared to 39.9 billion at the end of 2017. Net loans and advances decreased by 5.6% in 2018, compared to the previous year, because of the increased provisions for loans which amounted to QR628.2 million, compared to QR365.9 million in year 2017. Loans-to-deposits ratio amounted to 126%, which is a high percentage indicating that the bank has given depositors' funds into loans  by about 1.26 times.
  
Asset quality: There is a decline in the quality of the assets. This is evidenced by the ratio of non-performing loans for 2018, which stood at 1.69% , with total non-performing loans amounting to QR470 million, compared to 1.0% or QR 292 million  in 2017. The coverage (provision for non-performing loans) reached 70.0%.
  
Shareholders' equity: Shareholders' equity increased by 3.8% to reach QR 5.5 billion at the end of 2018, compared to QR 5.3 billion at the end of 2017. Return on equity amounted to 12.1% in 2018, almost the same percentage of 2017%.
 
Revenues: Net interest decreased by 0.6% to QR 829.3 million, compared to QR 834.4 million at the end of 2017. This decrease is due to higher interest expense (cost of deposits), more than interest income. Net interest income accounts for 75.3% of total operating income.

 Expenses: It amounted to QR 435.6 million compared to QR 404.7 million in 2017, an increase of 7.6% as a result of the Bank's deduction of QR 126.2 million in 2018, as provision for expected credit loss, compared to QR 66.7 million in 2017.

 Dividends: The Board of Directors recommended to the General Assembly to distribute 10% (3.25% dividend) of the nominal value of the capital as cash dividends, with 10% as bonus shares in 2018, compared to 10% cash dividends and 5% bonus shares in 2017.
  

 The stock is currently traded at PE multiple of 9.72, and a book value multiplier of 1.17 times.