Posted on April 22, 2015

The Commercial Bank of Qatar Q.S.C. (“Commercial Bank” or “the Bank”) and its subsidiaries and associates announced today its financial results for the quarter ended 31March 2015. The Bank delivered a net profit of QAR 462.5 million for Q1 2015. 

Net profit increased by 19.5% compared to QAR 387 million achieved in the fourth quarter of 2014. At the operating profit before provisions level, profit is up by 4.3% to QAR 551.7 million as compared to the first quarter of 2014.  However, due to higher provisioning, the Q1 2015 represents a 15.7% decrease in profitability compared to same period in 2014.

Key financial highlights compared to same period in 2014

  • Net operating income up1.8% to QAR 952.2 million
  • Operating profit before provisions up by 4.3% to QAR 551.7 million
  • Net profit down by15.7% to QAR 462.5 million
  • Total assets up1.8% to QAR 116.1 billion
  • Customer loans and advances up4.7% to QAR 71.9 billion
  • Customers’ deposits down0.6% to QAR 61.7 billion

His Excellency Sheikh Abdullah bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank said, "Qatar's economy continues to diversify in line with the Qatar National Vision 2030. Commercial Bank's results for the first quarter of 2015 reflect the changing dynamics of Qatar's economy, with robust growth being generated from the private sector. The successful execution of Commercial Bank's strategy across its operations in Qatar, Turkey, UAE and Oman has resulted in a strong set of financial results for the first quarter of the year."

Financial Performance

Mr. Hussain Alfardan, Commercial Bank's Vice Chairman and Managing Director, added, "Commercial Bank has made a good start to the year 2015 at the operating level. The first quarter has seen a solid performance from Commercial Bank, a good quarter from ABank and continued profit growth from our Associate banks in the UAE and Oman. These performances have enabled Commercial Bank to deliver a quarterly profit of QAR 462.5 million."

Net operating income increased by 1.8% to QAR 952.2 million for the quarter ended 31 March 2015, up from QAR 935.7 million achieved in the same period in 2014.ABank delivered net operating income of QAR 173.3 million for the quarter ended 31 March 2015 which represents 18.5% of the total net operating income. Net interest income was QAR 625.5 million for the quarter ended 31 March 2015, 0.8% higher than the same period of 2014, reflecting the growth in lending. ABank contributed QAR 148.7 million, 23.8% of the total net interest income.Net interest margin decreased to 2.59% as compared to the first quarter of 2014 at 2.70%

Non-interest income was up by3.7% to QAR 326.7 million for the quarter ended 31 March 2015 compared with QAR 315 million for the same period in 2014. The increase in non-interest income was due to higher net fees and commission income. Total operating expenses were down by 1.6% to QAR 400.5 million for the quarter ended 31 March 2015 compared with QAR 406.9 million for the same period in 2014. 

The Bank’s net provisions for loans and advances were QAR 170.2 million for the quarter ended 31 March 2015, up from QAR 50.8 million for the same period in 2014, a low level of provisioning compared to historic levels. The non-performing loan ratio marginally increased to 3.89% at 31 March 2015 compared with 3.8% at the end of December 2014 and the coverage ratio increased to 76.8% as at 31 March 2015 compared to 74.3% as at December 2014.

Commercial Bank delivered a balance sheet growth of 1.8% at the end March 2015 with total assets at QAR 116.1 billion, compared to QAR 114 billion at the end of March 2014. Balance sheet growth was driven mainly by an increase of QAR 3.3 billion in lending to customers and QAR 2.3 billion due from banks, partly offset with a decrease of QAR 2.4 billion in investments. Loans and advances to customers were up by 4.7% to QAR 71.9 billion at 31 March 2015 compared with QAR 68.7 billion at the end of March 2014. The growth in lending since March 2014 has been generated, mainly, in the retail,services, government and commercial sectors

Investment securities were down by 16.1% to QAR 12.5 billion at 31 March 2015 compared with QAR 14.9 billion at the end of March 2014. The reduction in investment securities is mainly due to the maturity and sale of Government bonds in the last quarter of 2014. Customers’ deposits reduced by 0.6% to QAR 61.7 billion at 31March 2015, compared with QAR 62.1 billion as at 31March 2014.

Mr. Abdulla Saleh Al Raisi, Commercial Bank's Chief Executive Officer, commented, "The results of the first quarter of the year have been driven by a number of factors. In Qatar, we saw strong growth in lending, particularly in the private sector. Turkey has generated a good performance for the quarter and our Associate banks, UAB and NBO, delivered 9% profit growth. Net interest margin has remained firm at 2.59% despite competitive pressure, and we have managed our expenses tightly, with our quarterly cost to income ratio down to  38% from 40% year-on-year. Provisions for the first quarter are in line with the levels we have seen over the past several quarters. The strength the Bank has witnessed inthe first quarter has continued into the beginning of the second quarter, and we are optimistic about Commercial Banks's opportunities for profitable growth this year."

Subsidiary in Turkey

Net profit for Alternatifbank (“ABank”) has decreased by 19.8% in the quarter ended 31 March 2015 to TL 27.1 million, compared with TL 33.8 million for same period in 2014. The results were impacted due to large one-off recoveries in the first quarter of 2014. Net operating income has increased by TL 14 million to TL 129.6 million, for the period ended 31 March 2015 from TL 115.6 million for the same period in 2014. ABank has grown its customer lending by 19.7% to TL8.6billion and customers’ deposits increased by 14.8% to TL 5.8 billion compared with 31 March 2014.

Associates in the UAE and Oman

National Bank of Oman and United Arab Bank have achieved a strong financial performance for the quarter ended 31 March 2015 with a 8.5% improvement in profitability as compared to the same period 2014.

National Bank of Oman

National Bank of Oman (“NBO”) achieved a net profit of OMR 12.6million for the quarter ended 31 March 2015 as compared to OMR 10.3million for the same period in 2014, an increase of 22.4%. Net operating income grew by OMR 5.2 million to OMR 31.5 million, from OMR 26.3 million in the same period 2014, mainly due to an increase in net interest income which was up  17.2% to OMR 22.4 million. As at 31 March 2015, NBO grew its customer lending by 14.2% to OMR 2.4 billion and customers’ deposits reduced by 13.8% to OMR  2.4 billion as compared to the same period in Q1 2014.

United Arab Bank

United Arab Bank (“UAB”) delivered a net profit of AED 161.5 million for the quarter ended 31 March 2015 as compared to AED 161.3 million over the same period in 2014.The net operating income for the quarter ended 31 March 2015 increased by 7.8% to AED 352million, from AED  326.5 million in Q12014 with solid underlying performance from both Net Interest Income and Non-Interest Income, up 10.2% and 1.1% respectively, as compared to the same period in 2014. UAB’s loans and advances increased by 1.7% to AED 18.3 billion as at 31 March 2015, with customers’ deposits at AED 18.3 billion, down by 1.9%as compared to Q1 2014.

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