A night view of Commercial Bank headquarters in West Bay.
DOHA: The Commercial Bank, its subsidiaries and associates (Group) reported a net profit of QR1.26bn for the nine months ended September 2018, a significant 386 percent jump as compared to QR259m recorded for the same period in 2017. The Group’s total assets reached QR138.7bn, up by 3.5 percent.
Sheikh Abdulla bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank, said: “Qatar continues to transform its economy for a more sustainable future, implementing a raft of reforms designed to strengthen the economy, increase self-sufficiency and promote growth.
“Markets have reacted positively to Qatar’s economic developments and the vision of its leadership with the QE Index posting its biggest quarterly jump in four years, outperforming its regional peers and becoming the second-best performer in the world in dollar terms this year.”
By aligning itself with the economic objectives of the nation and providing a strong, stable and innovative financial institution to support Qatar’s economy, Commercial Bank is pleased to continue to be a part of Qatar’s growth story, he said.
Commenting on the solid financial results Hussain Alfardan, Commercial Bank’s Vice-Chairman, said: “Our bottom line continues to show improvement as our legacy loan provisioning reduces.
We have also made progress in optimising costs with strategic investments in key technologies to digitise and automate internal systems, partly reflected in the 12 percent reduction in operating expenses during the first nine months of 2018 as compared to the same period last year.”
Net operating income for the Group increased by 0.4 percent to QR2.66bn for the nine months ended 30 September 2018, up from QR2.65bn achieved in the same period in 2017.
Net interest income for the Group increased by 4.0 percent to QR1.9bn compared to QR1.8bn recorded from a year ago, driven mainly by re-pricing of some of the loans during the period. Net interest margin is 2.3 percent for the nine months, an increase of 0.1 percent.
Non-interest income for the Group decreased by 7.8 percent to QR755m from QR819m. The overall decrease in non-interest income was mainly due to lower income from investment securities as equity holdings were scaled down in line with the strategic plan and lower foreign exchange income.
Total operating expenses were tightly managed at a Group level, down 12 percent to QR892m compared with QR1.01bn. Costs reductions were primarily driven by lower staff and administrative expenses.
The Group’s net provisions for loans and advances decreased by 57.5 percent to QR 617m, from QR1.45bn. The non-performing loan (NPL) ratio decreased to 5.5 percent from 5.6 percent. The loan coverage ratio is maintained at 83.5 percent in the nine months compared to 91.6 percent a year ago.
The Group delivered balance sheet growth of 3.5 percent with total assets at QR138.7bn. Total asset growth was driven mainly by an increase of QR2.2bn in investment securities and QR1.9bn due from banks.
The loans and advances to customers increased by 0.3 percent to QR84.8bn. The investment securities increased by 11.5 percent to QR21.5bn. The increase is mainly in Government bonds. Customer deposits increased by 2.2 percent to QR74.9bn.
Joseph Abraham, Commercial Bank’s Group Chief Executive Officer, commented, “Commercial Bank’s performance during the first nine months of the year, is a testament to the team’s execution of our 5-year strategic plan. Our consolidated operating profit was QR1.77bn, an increase of 8 percent while net profit increased 386 percent to QR1.26bn compared to the same period last year.”
“Our bottom line has benefited from the reduction of our legacy loan book provisioning and is trending towards a normalised provisioning rate. This was supported by a focus on efficiency across the business with operating expenses declining. As a result our cost to income ratio is now 33.5 percent compared to 38.1 percent for the same period last year.”
The bank’s consolidated net interest income increased to QR1.91bn, up by 4 percent. Loans and advances remained stable at QR84.8bn, due to the impact of the depreciation in the Turkish Lira and a contraction in Government loans due to repayment of loans post the State of Qatar bond issue. Customer deposits increased to QR74.9bn, up 2.2 percent year-on-year, the Group CEO said.
The Domestic Bank reported an increase of 7 percent in net interest income to QR 1.67bn, supported by 4 percent growth in loans and advances compared to the same period last year and customer deposits increased by 3 percent at QR66bn.
“Our strategy with Alternatif Bank in Turkey has been to focus on proactively addressing the risk profile of customers in order to meet possible challenges in the current risk and macro-economic environment,” Joseph Abraham said.
