Chief Executive Officer’s Statement
QNB continues to set new record figures in 2023 and prepares for further progress in 2024 at an ambitious pace.
I am pleased to share with you these special and exceptional moments in the journey of our long-standing bank. Our source of pride rises from our remarkable success during the past year 2023 as we attained a new success peak which has never been reached before in the bank’s history.
This achievement could only have happened thanks to the sincere efforts, synergy, coordination, and loyalty we all feel towards our entity. Despite several challenges in the local and global market, the bank’s team have shown the persistence to strive for the highest levels of professionalism and readiness to deal with all events.
We set proactive and flexible plans which eventually bore fruit of unrivaled success in terms of all indicators, plans, and growth. Thus, QNB reinforced its position on top of the strongest and largest banks operating in the Egyptian market.
New Record Figures across all banking sectors
QNB succeeded in reaching a consolidated net profit of EGP 16.2 billion with an increase of EGP 5.9 billion and a growth rate of 57% compared to the same period in 2022. The bank’s independent net profit reached EGP 15.8 billion while the consolidated asset portfolio reached EGP 629 billion at end of December 2023 with an increase of EGP 145 billion compared to 2022 and a growth rate of 30%.
Based on our pivotal role in supporting the national economy, the loans and advances portfolio increased by EGP 39 billion, reaching a total of EGP 267 billion, which represents a growth of 17% compared to December 2022. Meanwhile, customer deposits accounted for EGP 530 billion at the end of December 2023, with an increase of EGP 123 billion and a growth rate of 30% compared to December 2022, driven by growth across all sectors.
The Non-Performing Loans (NPL) ratio reached 5.53% at the end of December 2023, while the Provision Coverage Ratio (PCR) for doubtful loans reached 108.0%. The bank’s Capital Adequacy ratio stood at 25.1% in light of optimal application of credit, utilization and risk policies.
As for QNB's lending activity vis-à-vis deposits, the bank has a high deposit utilization rate. The Loans to Deposits ratio (LDR) reached 50.33% at the end of December 2023 with a focus on increasing our basic banking operations while maintaining high liquidity rates for all currencies.
QNB ’s extended geographical distribution of Branch Network strongly contributes to our ambitious goals
The QNB ’s branch network, consisting of 234 branches, contribute to achieving our ambitious goals of operating a geographically dispersed network. Branch locations have been properly selected in strategic places for better accessibility to meet customer needs of the broad population. Moreover, to extend the reach of our financial services and unlock new prospects, branches were established in remote areas as well to meet the customer requirements of a large sector, especially in border governorates and other locations. This widely dispersed network made it easier for the bank to target and attract new customer segments over the past period.
The bank also pays great attention to develop its historical branches that embody an essence of heritage. Our distinctive concern in this respect reflects our commitment to preserve and renovate all historical branches which own an architectural nature. With an eye on retaining the branch’s rich heritage and identity of the building itself, we also cleverly manage to retain sophisticated interiors and graceful elegance combined with state-of-the-art technology to display authenticity, modernity, and continuous development.
Additionally, the bank will continue to open new branches during the coming period to complement its goals in the market and reach out to diversified customer segments for a wider integration of customers into the official system in line with the bank’s plans and objectives to support financial inclusion and digital transformation.
The Small and Medium-sized Enterprises (SMEs) portfolio resumes to play its significant role
QNB resumes its relentless efforts in supporting micro, small, and medium-sized enterprises (MSMEs) due to its belief in the critical role they play in sustainable development, reduction of unemployment, and are an essential foundation for economic development. The bank has always been in the lead to achieve the instructions of the Central Bank of Egypt (CBE) mandating banks to allocate 25% of their total credit facilities portfolio to MSMEs. We have even succeeded to exceed this mandatory percentage one year prior to CBE’s deadline. Besides, QNB played a pioneering role in offering non-financial services due to being an essential and complementary part to financing and offered other products as well through the bank’s Business Development Centers (BDCs) under NilePreneurs Initiative in Delta and Upper Egypt for encouraging and supporting youth and entrepreneurs.
To demonstrate its keenness to provide financing opportunities and banking services in all regions, QNB adopted a geographical expansion plan that relies primarily on focusing on promising regions such as Delta and Upper Egypt. Such steps shall ensure a wider access to financing opportunities for the MSMEs sector by providing lending programs and packages that meet their needs. Within the bank’s expansion of its loan portfolio directed to these projects, QNB has given consideration for a balanced distribution in such a manner to include different economic sectors such as industrial, commercial, agricultural, and service sectors, while paying special attention to activities that contribute to substituting imports and increasing exports.
Leadership in retail banking and launching of innovative products
The retail banking sector was able to achieve a remarkable growth of around 19% during 2023 compared to the previous year. The retail loans and facilities portfolio accounted for approximately EGP 54 billion. The retail sector also witnessed a boom in the number of cards issued where total number of cards reached more than 2 million cards for over 1.7 million customers.
The retail banking sector particularly relies on technological development, expansion of digital services, and facilitating customer accessibility to the bank’s products. In addition, various banking services and electronic products have been launched to meet the wide range of customer needs, segments and different interests.
The retail banking sector also launched an educational program called the ‘Retail Banking Academy’ designed for all QNB ’s retail employees. The program provides them with the latest academic and training courses in this field to enable the retail team maintain continuous knowledge of all local and global developments.
The Mortgage Finance activity also achieved a strong growth and performance during the past year with a growth rate of around 25% above the previous year. The mortgage finance portfolio reached EGP 6 billion where more than 26,000 customers benefited from the services it offered. The large customer base in this sector cements QNB ’s rank among the largest banks participating in the mortgage finance initiatives of the Social Housing Fund under the framework of the Central Bank of Egypt’s initiatives with various interest rates ranging from 3%, 7%, or 8% according to the set eligibility criteria.
QNB is a Pioneer in leading and arranging large syndicated facilities supporting mega Projects in Egypt
QNB maintains its pioneering position as one of the largest banks in Egypt in terms of arranging, financing, and supporting projects in diversified economic sectors, which was positively reflected on its strong performance with a portfolio of syndicated facilities exceeding EGP 22 billion.
Leveraging on its pivotal role in the market, QNB succeeded during the past period to support and finance several mega projects; offering tailored structured financing solutions being a committed business partner to its customers during all times through balanced policies to navigate and mitigate challenges. The bank’s outstanding support to different sectors including industrial, services, trading, construction, renewables and women empowerment in business has a significant impact on the Egyptian economic growth.
QNB ’s strong proven relations with both local and international financial institutions and multilaterals crowned the success of arranging major syndicated deals in the Egyptian market and acts as an initial mandate lead arranger, facility agent, or security agent in such deals. QNB continues its commitment in sustainable financing and looking forward to the future with confidence and hope, with the determination to continue strengthening its position as one of the leading banks.
Sustainable Finance and sustainability on top of QNB ’s priorities
During the past year of 2023, QNB adopted an increase in financing environmental and community-based projects, where the sustainable finance portfolio exceeded EGP 10 billion. With such contribution, the bank significantly serves in preserving three main aspects, namely, the environmental, economic, and social aspects.
Its utmost attention was given to finance projects with environmental and social aspects. QNB is committed to its internal policies in evaluating projects from an environmental and social perspective in alignment with the group’s policy and international standards in this respect. Pursuing its green financing agenda, the bank launched a range of green products for corporate and retail customers. It has also targeted other sectors including SMEs, youth and women entrepreneurs.
On an internal level, QNB continues its steps towards a gradual transformation to rely on renewable sources of energy at some branches. To further reduce its carbon footprint, the bank replaced part of its fleet with electronic vehicles instead of using traditional gasoline vehicles. Moreover, the bank highly supports the transformation to electronic transactions to reduce paper consumption.
The bank is also keen during the coming period to expand its support for environmental and community-based projects to achieve the Central Bank of Egypt’s plan and objectives and ultimately contribute to the implementation of Egypt’s Vision 2030.
Innovation in financial inclusion and digital transformation
QNB achieved positive results in financial inclusion and digital transformation. The number of subscribers to electronic channels (mobile banking and internet banking) increased for all age brackets, including youth, adults and women. This growing momentum towards the bank’s e-channels contributes to implement the vision of the National Payments Council (NPC).
Within the framework of its constant endeavors to innovate new products with the aim of meeting customer needs and their banking aspirations, QNB recently launched the most vital digital platform, “QNB Bebasata” which represents the evolution and latest trend in digital banking. QNB Bebasata enables customers to perform all bank transactions such as account opening, issuance of certificate of deposits, loan requests and other services electronically.
QNB is a pioneer in the banking sector for joining the national system for instant payments network. Taking a step further, the bank added and developed new services provided through the instant payments network “InstaPay”. Real-time financial transfers were availed via the bank’s debit, credit and prepaid cards through directly debiting the customer’s account. By availing this feature, QNB is typically in the lead nationwide for providing this service which was previously available on mobile, internet and e-wallet applications, and through Meeza cards.
QNB launched a range of new services provided through its Internet banking and mobile banking application. The newly added features enable different customer segments to perform several services including credit card PIN management through the Internet banking, the official website and the mobile banking application which availed the opening of a supplementary account, monitoring depository products, purchasing or redeeming investment certificates of QNB mutual funds, the payment of bills, donations and various Fawry services. All of these services aim to reduce reliance on cash, increase customer satisfaction, save time, and avoid branch traffic which represent the fundamental goals behind digital transformation.
QNB also launched the first Chat banking WhatsApp channel on the bank number (0020219700). The WhatsApp service allows automatic response to non-financial inquiries by customers and non-customers - for retail banking products and small and medium enterprises. The service provides a list of options to easily support general inquiries about banking products and services, nearest branch and ATM locations, selected branches for QNB FIRST lounges and branches serving customers with special needs.
On the other hand, Corporate Internet banking services come at the center of QNB's attention. The bank offers its corporate customers a wide range of services through its internet banking platform. It also added government payments to the platform to align with the State’s approach towards digital transformation and facilitating transactions in business for corporate customers.
QNB also announced providing cutting edge international payment services for (SWIFT Go) in the Egyptian market in cooperation with SWIFT International. This service aims to increase the speed of executing low-value international payments through a correspondent banking network which subscribed to that service. It also provides full transparency regarding the costs associated with those transfers in advance. SWIFT Go will positively impact customers in terms of saving time, cost and eliminating challenges facing some customers, especially small businesses, and individual customers, when making low-value international payments.
In addition to these newly introduced banking services, we also have a wide range of banking services and products that meet individual and company needs. We continue working to develop our offerings in real time so that all customers can conduct all their banking transactions easily and conveniently.
QNB pays special attention to integrating people with special needs into banking business to achieve sustainable development goals
QNB pays special attention to the dissemination of a banking culture among people with special needs. It also works on studying their needs and requirements. We undertook to empower this important segment of the society in order to set in motion the concept of social and financial inclusion and digital transformation.
In this respect, QNB introduced a range of banking services tailored to their needs to facilitate their integration into the banking sector and their onboarding experience. These actions were taken in view of QNB ’s leading role in the dissemination of banking culture and attracting the largest number of citizens to the banking sector, especially this segment.
By doing so, QNB aims at improving their living conditions, achieve equality, eliminate discrimination against them, remove all barriers they face and open up various opportunities for people with special needs. These efforts will ultimately develop their potentials and capacities to obtain their banking rights.
QNB also took several important steps to facilitate banking processes for people with special needs; starting from the bank account pre-opening stage in which the account opening procedures are simplified and facilitated and ending with all bank transactions either performed at the branch or through mobile applications. QNB also facilitated the use of the bank’s ATM s for people with special needs. In addition, some selected branches were equipped with wheelchair ramps to facilitate entry and exit to branches and access to ATMs. Access to audio recordings in branches were also provided to allow listening to the terms and conditions of important banking products and services.
Moreover, QNB allocated highly trained staff to deal with our customers with special needs; in addition to the presence of certified sign language staff at some branches to easily communicate with this specific segment of customers. Furthermore, they may use the mobile application, WhatsApp channel or send an email to the bank. QNB also gives priority to customers with special needs in the queuing system at branches, as well as other services provided to facilitate their integration into the Banking sector.
The development of technological infrastructure and customer data protection are an integral part of our system
Our strength relies primarily on our technological infrastructure and our qualified staff who together constitute the corner stone that allowed us to launch a diverse range of banking products and services. In this sense, QNB is keen on continuous development and investment in technological infrastructures and establishing partnerships with the largest global service providers and developers to enable robust knowledge of cutting-edge technology.
The powerfully built technological infrastructure is a major reason for our capability to protect customer data in alignment with best practices, deal with cyber security incidents and business continuity, monitor electronic attacks and early warning, use vulnerability scanning and penetration tests; in addition to the management of critical information infrastructure security, emergency plans, management of cyber awareness and business development.
QNB shows a strong commitment towards the society
QNB demonstrated its leading position as one of the largest private sector banks committed to social responsibility. It strengthened its efforts in serving the community and participated in various initiatives to create a positive and sustainable impact.
In light of its commitment to community service, the bank continuously seeks to participate and join forces with the State and State institutions in all initiatives and projects that serve the wide nation and society aiming to provide a better life for the neediest groups in various fields.
Moreover, QNB partnered with major development foundations and civil society institutions in Egypt resulting in comprehensive development in many fields including health, education, economic and social empowerment, giving care to needy families, and preparing appropriate homes for living through the “Hayah Karima” Initiative. Since the early stages of this initiative up to the current time, QNB made a great impact and further intends to expand its partnerships and initiatives to contribute to the advancement of the Egyptian society.
Our Human Resources are our real assets and source of wealth
Besides to its long-standing experience in banking and its strength driven from being the largest financial group in the Middle East and Africa, QNB owns priceless assets of human resources and valuable calibers. Our human resources constitute the institution’s cornerstone and form an essential pillar which drives forward the progress of QNB . Based on such firm belief, we spared no effort in providing employee support and development. The bank pursued its actions on employee skill development, conducting ongoing training courses, and providing career development programs to promote their capabilities with an ultimate goal of equipping QNB employees with the knowledge of all developments occurring on global and local levels.
Furthermore, QNB signed cooperation protocols and partnerships with the most prominent academic and training institutions in a step to update our employees of new trends in the financial and banking sector and put practical efforts into action aiming to drive QNB on the top ranking.
QNB wins more than 15 prestigious awards
Year 2023 was marked by many success stories and significant achievements at all levels of business activity. QNB won more than 15 awards from international and prestigious institutions which altogether demonstrate the professionalism of its business practices in the market. The most prominent awards are listed below:
> Best SME Bank in Egypt - By Capital Finance International Magazine
> Best Retail Bank in Egypt - By Capital Finance International Magazine
> Best Corporate Bank - By Global Banking and Finance
> Best Bank for Digital Banking Services - By Global Banking and Finance
> Best SME Bank - By The Global Banking and Finance
> Best Retail Bank - By The Global Banking and Finance
> Best Trade Finance Bank - By The Global Banking and Finance
> Best Bank for Treasury Activities - The Global Banking and Finance
> Visa Risk Management Award for e-Payments
> Best Bank For Trade Finance in Egypt - By The Digital Banker - Middle East & Africa Innovation Awards
> Best SME Bank In Egypt - By Global Finance Magazine
> Best E-Banking Product - Mobile Banking - The International Finance Magazine
> Most Innovative SMEs Bank - The International Finance Magazine
> Elite Quality recognition Award 2023 for processing payments with STP rate 99.68 % for payments issued through MT103 - By J.P. Morgan
> Elite Quality recognition Award 2023 for payments STP rate 99.90% issued through MT202 - By J.P. Morgan
> Best Foreign Bank in Egypt - By EMEA Finance African Banking Awards
> “Middle East CX Pioneer - Digital Customer Service” award from Genesys®
A Tribute
Dear colleagues,
The achievements of the past year would never have been realized without your efforts, dedication, and loyalty. You have all shown continuous perseverance to promote our long-standing banking institution. In my capacity and on behalf of the Board of Directors, I take this opportunity to give tribute to all colleagues for these successes and efforts. We have confidence that the forthcoming year 2024 will be better and open new prospects in spite of facing different types of challenges.
The global growth rate is expected to witness further slowdown this year in light of tightening monetary policies and restricting financial conditions. Not to mention weakness in trade activities and investments at the global level. Naming other few challenges are the risks accompanying the escalation of the recent conflict in the Middle East, the financial pressures, continuation of the waves of inflation, the fragmentation of the trading system, and climate-related disasters which altogether highly impact emerging markets, in general.
Having said that, we reiterate and stress the necessity to continue together hand-in-hand our full cooperation and combined efforts to pursue our ambitions and goals in the Egyptian market for maintaining our institution’s position at the forefront of major banks.
I wish you a continued prosperity and success.