Masraf Al Rayan earns $296.62 Mn profit for H1 2020

By Rahul Vaimal, Associate Editor
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Masraf Al Rayan Bank Qatar
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Qatar-based Islamic bank Masraf Al Rayan has reported a 0.5% Year on Year rise in its profits for the first half of the year ended in June with a net profit of $296.62 million. 

Ali bin Ahmed al-Kuwari
Ali bin Ahmed al-Kuwari
Chairman and MD
Masraf Al Rayan Bank

“The year 2020 is considered an extraordinary year. It has witnessed several crises from early on at the economic and health levels; low oil prices have impacted the global markets, then came the Covid-19 pandemic and the resulting quarantine that placed hugely restrains on individuals and economic activities in its entirety and blocking movement among countries, and low consumer spending, which affected many productive and non-productive economic activities and had negatively impacted the financial and business markets.”

“In spite of these extraordinary circumstances, Masraf Al Rayan maintained its steady performance during the first half of this year, achieving notable results, under the prudent decisions made by the Government of the State of Qatar to mitigate the damage incurred within the private sector caused by the Covid-19 pandemic, the most important of which is the allocation of QR75bn to support those who were affected,” Al-Kuwari added.

Masraf Al Rayan’s Chairman also touched upon the joint press release issued on June 30 by Masraf Al Rayan and Al Khaliji Commercial Bank on a potential merger to establish a larger and stronger financial institution. He asserted that the possible alliance would be regarded as a “solid financial entity” with higher liquidity, with total assets exceeding $45.04 billion.

The new entity which will maintain all of its dealings in compliance with the Islamic Shariah principles, will have total equity of more than $5.22 billion and expected to contribute positively to the economic development in Qatar through financing development initiatives in line with Qatar’s 2030 vision.

The potential merger is subject to the approval of the Qatar Central Bank, the Qatar Financial Markets Authority, the Ministry of Commerce and Industry and other relevant official bodies, and the approval of shareholders in both Masraf Al Rayan and Al Khaliji Commercial Bank, after completing a detailed financial and legal due diligence.

Group CEO Adel Mustafawi expressed an opinion consistent with HE al-Kuwari, describing the results as a true reflection of the strong ratios the bank continues to maintain in all of its key financial indicators in these exceptional circumstances.

Key facts

  • Masraf Al Rayan’s total assets reached $30.02 billion in June compared to $28.15 billion in June last year.
  • Financing activities improved 4.4% to reach $21.45 billion in June compared to $20.54 billion in the same period last year.
  • Investments rose by 4.8%. to $5.88 billion compared to $5.60 billion in the same period last year.
  • Customer deposits were $18.51 billion compared to $17.69 billion as of June 2019, an increase of 4.7%.
  • Shareholders’ equity touched $3.65 billion in June compared to $3.52 billion as of June 2019, an increase of 3.4%.
  • Masraf Al Rayan’s return on average assets which remains to be one of the highest in the market was at 2.01%.
  • Its return on average shareholders’ equity of the bank reached 15.93%.
  • The banks’ capital adequacy ratio, using Basel-III standards, stood at 19.7% compared to 19.45% as of (June 2019).
  • The bank’s non-performing financing (NPF) ratio of 0.94% is the “lowest in the banking sector reflecting very strong and prudent” credit and risk management policies and procedures.