Doha: The Commercial Bank, its subsidiaries and associates (Group) yesterday announced a net profit of QR2.13bn for the first nine months of the year, registering an increase of 84.7 percent compared to QR1.15bn during the same period in 2020.
The Group’s balance sheet has increased by 15.5 percent with total assets at QR165.3bn, compared to QR143.1bn in September 2020. The increase was mainly due to loans and advances. Customer loans and advances increased by 11.8 percent to QR101.1bn from QR90.5bn, with the increase mainly seen in the government and public sectors.
Commercial Bank’s normalised operating income also rose by 11.4 percent to QR3.49bn (+21.6 percent on reported basis), while operating profits grew by 13.8 percent to QR2.62bn from QR2.30bn during the same period last year. The Group has also successfully issued a senior unsecured five-year bond of $700m in May.
Sheikh Abdulla bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank said: “Qatar’s economy demonstrated great resilience during COVID-19, with 4 percent growth year-on-year in the second quarter and is expected to strengthen further driven by the upcoming 2022 FIFA World Cup, the North Field Expansion Project and the economic accelerators supporting the Qatar National Vision 2030.
“Furthermore, Qatar’s GDP per capita is set to increase 16 percent by 2025, with an uptick in activity in Q3 after the easing of COVID-19 restrictions and as the country made great strides with its rapid vaccination campaign. Additionally, foreign demand is strengthening to boost domestic activity – all of which present a great opportunity for Commercial Bank’s continued growth,” he added.
Hussain Alfardan, Vice-Chairman at Commercial Bank said: “At Commercial Bank we are committed to supporting Qatar’s National Vision 2030, and to becoming a global hub for commerce and international business investments by providing world-class banking solutions to all our customers. These efforts have been recognised internationally when we received the “Best Digital Bank in Qatar” award from AsiaMoney Magazine for the second year in a row. We also received five prestigious awards from Global Finance for 2021 across both consumer and corporate digital banking award categories. This international recognition is testament to the strength of our best-in-class digital products and our ongoing investment in innovative technologies”.
Net interest income for the Group rose by 17.5 percent to QR2.73bn from QR2.32bn for the first nine months. Net interest margin increased to 2.6 percent from 2.4 percent, mainly due to effective management of the cost of funding.
Normalised total operating expenses increased by 4.9 percent to QR866.2m (+45.3 percent on reported basis) from QR825.5m in the same period in 2020. However, normalised cost to income ratio reduced from 26.4 percent to 24.8 percent.
The Group’s net provisions for loans and advances rose by 14.1 percent to QR556.0m for the nine months ended September 30, 2021, from QR487.1m in the same period last year. The increase in provisions was mainly due to higher provisions of NPL customers. The non-performing loan (NPL) ratio decreased to 4.0 percent from 4.8 percent, while loan coverage ratio was at 115.9 percent.
Commercial Bank’s investment securities grew by 3.5 percent to QR26.7bn on September 30, 2021 compared with QR25.8bn in the same period last year. The Group’s customer deposits increased by 10.3 percent to QR80.7bn from QR73.1bn. Low cost deposits have increased by 12.4 percent due to the various cash management initiatives and digital products that the bank offers.
Joseph Abraham, Group Chief Executive Officer at Commercial Bank commented: “Commercial Bank has continued to deliver positive results for the nine months ended September 30, 2021. The domestic bank reported a 3.5 percent increase in total fees and other income on a normalised basis, driven by a return to normalised spend patterns domestically and investment income. Alternatif Bank continues to improve its profitability as the Bank reported net profit of QR2.5m for the first nine months reversing the net loss reported in Q1 2021 caused by interest rate volatility”.
The Group’s total fees and other income decreased by 7.4 percent to QR759.7m on a normalised basis (up by 34.4 percent to QR1.0bn on reported basis) compared to the same period last year primarily driven by lower FX and trading income from Alternatif Bank due to sharp increase in USD/TRY swap cost in 2021.
“Gross provisions for the period reduced by 23.6 percent as compared to last year as ECL provisioning has come down due to increased market stability. However, overall net provisions remained flat due to lower recoveries. NPL coverage ratio improved to 115.9 percent compared with 94.5 percent for the comparative period due to continued prudent provisioning,” added Abraham.
