DOHA: The Commercial Bank , its subsidiaries and associates (Group) recorded a combined net profit of QR1.50bn for the nine months ended 30 September 2019. The Group’s nine-month net profit reflects an increase of 19.4 percent as compared to QR1.26bn posted for the same period in 2018. The Group’s operating income rose by 7.1 percent to QR2.85bn for the period.
Commenting on the bank’s solid performance, Sheikh Abdulla bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank, said, “Qatar continues to strengthen its position as a leading investment destination within the Middle East region. We believe this trend will accelerate as the government introduces new reforms designed to enhance Qatar’s attractiveness to entrepreneurs and international businesses. As a leading private bank in Qatar, Commercial Bank plays an important role in supporting these government initiatives.
“Commercial Bank has developed deep expertise in the market, enabling it to offer comprehensive banking and financing solutions for Qatar’s people and businesses. Commercial Bank’s operations have contributed to the country’s thriving financial sector which remains attractive to international companies setting up in Qatar”, the Chairman said.
Hussain Alfardan, Commercial Bank’s Vice Chairman, added, “We continue to see our initiatives yielding strong results, as we progress with the implementation of our 5-year strategic plan. We have strengthened the foundation of our business and remain focused on bringing innovative products and services to our customers, providing an exceptional client experience and strengthening our position in the market.”
The Group balance sheet has increased by 7.9 percent at 30 September 2019 with total assets at QR145.7bn, compared to QR138.7bn in the same period. The increase was mainly in loans and advances and investment securities.
Operating profit for the Group increased by 14.6 percent to QR2.02bn for the nine months ended 30 September 2019, compared to QR1.77bn achieved in the same period in 2018.
Net interest income for the Group increased by 1.6 percent to QR1.93bn and net interest margin increased to 2.3 percent. The increase in margins is mainly due to Asset book increase with higher yielding assets. NIM has improved quarter on quarter from 2.2 percent in Q2 2019 to 2.4 percent in Q3 2019.
Non-interest income for the Group increased by 21.1 percent to QR914m. The overall increase in non-interest income was due to increase in net fee and commission income, foreign exchange earnings and income from investment securities.
Total operating expenses were tightly managed at a Group level, down by 7.6 percent to QR824.1m. Costs reductions were primarily driven by lower staff and administrative expenses.
The Group’s net provisions decreased by 0.9 percent to QR625m and the non-performing loan (NPL) ratio has reduced to 4.9 percent at 30 September 2019 compared to 5.5 percent in the same period 2018. The loan coverage ratio has increased to 95.2 percent compared to 83.6 percent in the same period 2018.
The Group’s loans and advances to customers increased by 5.1 percent to QR89.1bn. The increase was mainly in the government and public sector.
The Group’s investment securities increased by 24.8 percent to QR27.0bn. The increase is mainly in Government bonds.
Joseph Abraham, Commercial Bank’s Group Chief Executive Officer, commented, “I am pleased with the progress we have made during the first nine months of 2019, reporting good growth across the board. Consolidated net profit increased 19 percent for the first nine months of 2019 to QR1.5bn, driven by an increase in operating income combined with a sustained focus on careful cost management. The results for the period demonstrate the strong execution of Commercial Bank’s 5-year strategic plan.
“Operating income for the first nine months of 2019 was QR2.85bn, an increase of 7.1 percent compared to the same period last year. The increase was driven by gains in non-interest income, which was up by 21.1 percent to QR914.2m, during the first nine months of 2019, compared to the same period last year. Gains in FX income and investment income, were up by 40.6 percent and 282 percent, respectively.
“Supported by the digitisation of our processes and careful resource management, operating expenses declined to QR824m, down 7.6 percent compared to the same period last year. Consequently, we improved our cost to income ratio to 28.9 percent for the period (2018: 33.5 percent). The reduction in operating expenses coupled with growth in operating income contributed to the increase in operating profits during the first nine months of 2019 to QR 2.03bn, up by 14.7 percent compared to the same period last year.”
Despite the low interest rate environment globally, we increased NIMs to 2.3 percent for the nine months ended 30 September 2019 compared to 2.2 percent in the same period 2018, and NII is higher by 1.6 percent compared to last year. The Group CEO said “this is due to a combination of carefully managing cost of funds, an increase in low cost deposits and actively managing asset yield through an increase in high yielding assets.”
Despite the depreciation of the Lira by circa 2.5 percent compared to the same period last year, Alternatif Bank reported an increase in net profit to QR109m, up 47 percent compared to the same period last year. Alternatif Bank grew customer deposits by 17 percent and loans and advances by 10 percent at 30 September 2019, compared to the same period last year.
The Domestic Bank reported a net profit of QR1.36bn during the first nine months of 2019, an increase of 18 percent compared to the same period last year. The improvement was largely driven by growth in operating profits.
Source from: The Peninsula