Commercial Bank of Qatar Financial Results for the year ended 31 December 2014

Commercial Bank increases profit for the year by 20.9% to QAR 1,940 million

 

Doha, Qatar: 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 year ended 31 December 2014. The Bank delivered a net profit of QAR 1,940 million for 2014, a 20.9% increase in profitability compared to 2013.  On a quarterly basis, Commercial Bank generated net profit of QAR 387 million in the fourth quarter 2014, an increase of 29% compared to the fourth quarter 2013.

 

The Board of Directors is recommending, for approval at the Annual General Assembly on 18 March 2015, a combination of a cash dividend payout of QAR 3.5 per share and the issue of one bonus share for every ten shares held. The financial results and profit distribution are subject to the approval of the Qatar Central Bank.

 

 

•    Net operating income up 13.6% to QAR 3,902 million

•    Net profit up 20.9% to QAR 1,940 million

•    Total assets up 2.3% to QAR 115.7 billion

•    Customer loans and advances up 8.5% to QAR 72.5 billion

•    Customers’ deposits down 2.9% to QAR 61.6 billion

•    Earnings per share of QAR 5.93

 

His Excellency Sheikh Abdullah Bin Ali Bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank said, “2014 marks the fortieth year since the incorporation of Commercial Bank as Qatar’s first private commercial bank.  In that time, the bank has grown to become the leading private commercial bank in Qatar, helping to build the nation in a period which has seen a huge transformation of Qatar’s economy and society.  We are proud of the role that Commercial Bank has played and will continue to play in supporting the growth of Qatar’s diversified economy as part of Qatar’s National Vision 2030.  Our subsidiary in Turkey and our alliance partnerships in the UAE and Oman ensure our continued role in the wider region’s growth.  Commercial Bank’s financial year has been strong as we have pursued the successful execution of our strategy to generate long-term value from across our franchise on behalf of our shareholders.  We look forward to the next forty years of building success with our clients and partners.”

 

Mr. Hussain Al Fardan, Commercial Bank’s Vice Chairman and Managing Director, added, “2014 has been a positive year for Commercial Bank.  Solid annual performances from Commercial Bank, our alliance banks, UAB and NBO, combined with a strong performance from our Turkish subsidiary, ABank, has meant that that Commercial Bank delivered net income of  QAR 1.94  billion, a 20.9 % improvement compared to 2013.”

Net operating income increased by 13.6% to QAR 3,902 million for the year ended 31 December 2014, up from QAR 3,434 million achieved in 2013. ABank delivered net operating income of QAR 849 million for the year ended 31 December 2014 which represents 21.8% of the total net operating income.

 

Net interest income was QAR 2,581 million for the year ended 31 December 2014, 17.9% higher than in 2013, reflecting strong growth in lending activities and the full year contribution and consolidation of ABank. ABank contributed QAR 638 million, 24.7% of the total net interest income. Net interest margin decreased marginally to 2.72% as compared to the third quarter of 2014 at 2.77%.

 

Non-interest income was up 6.1% to QAR 1,322 million for the year ended 31 December 2014 compared with QAR 1,246 million 2013 with ABank contributing QAR 211 million. The overall increase in non-interest income was due to higher net fee and commission income and was partially offset by lower income from investments securities and foreign exchange.

 

Total operating expenses were up 12.7% to QAR 1,620 million for the year ended 31 December 2014 compared with QAR 1,437 million in 2013.  Excluding ABank, expenses were flat for the year ended 31 December 2014 compared to 2013.

 

The Bank’s net provisions for loans and advances were QAR 623 million for the year ended 31 December 2014, up 3% from QAR 604 million provided in 2013. The non-performing loan ratio has increased to 3.79% at 31 December 2014 compared with 3.71% at the end of September 2014 and the coverage ratio has increased to 74.3% as at December 2014 compared to 68.3% in September 2014.

 

Impairment provisions on the Bank’s investment portfolio reduced to QAR 50 million for the year ended 31 December 2014 compared with QAR 110 million in 2013.

 

Commercial Bank delivered balance sheet growth of 2.3% at the end December 2014 with total assets at QAR 115.7 billion, compared to QAR 113.1 billion at the end of December 2013.  ABank contributed QAR 17.6 billion of assets for the period.  Balance sheet growth was driven mainly by an increase of QAR 5.6 billion in lending to customers partly offset with a decrease of QAR 3.1 billion in financial investments.

 

Loans and advances to customers were up by 8.4 % to QAR 72.5  billion at 31 December 2014 compared with QAR 66.9 billion at the end of December 2013. The growth in lending since  December 2013 has been generated, mainly, in the Government, Contracting, Services, Commercial and Retail Sectors. Loans and advances to customers of QAR 13.1 billion at ABank were included at 31 December 2014.

 

Investment securities were down by 21% to QAR 11.6 billion at 31 December 2014 compared with QAR 14.7 billion at the end of December 2013. The reduction in investment securities is mainly due to the maturity and sale of Government bonds. Investment securities of QAR 1.4 billion at ABank were included at 31 December 2014.

 

Customers’ deposits reduced by 2.9% to QAR 61.6 billion at 31 December 2014, compared with QAR 63.4 billion as at 31 December 2013. The reduction in deposits was due mainly to a decrease in time deposits as the Bank received funds from the EMTN issuances in June and July 2014.  Partially offsetting this decrease was an increase in demand and savings balances.  This reflects our strategy to ensure continued diversification of our funding base and our focus on growing low cost funds.

 

Mr. Abdullah Saleh Al Raisi, Commercial Bank’s Chief Executive Officer, said, “Commercial Bank’s full year financial performance demonstrates the value of the re-focusing of our strategy undertaken earlier in the year.  Across our franchise, we are driven by a returns based approach to our markets.  We have made and continue to make the necessary investments across our assets in terms of leadership teams, operations and marketing to ensure Commercial Bank’s continued innovative and client-focused service.  All of our operations have generated good levels of profit momentum for the year with ABank delivering the stand-out performance for the year as the value of our strategy for our Turkish subsidiary is now flowing through to the bottom line.  We have a solid platform from which to generate additional growth domestically and increasingly between our regional markets and we look forward to our prospects in 2015.”

 

Alternatifbank (“ABank”) delivered a 162 % increase in net profit to TL 139 million for the year ended 31 December 2014 (TL 53 million for 2013).

 

Net operating income grew by TL 48 million to TL 510 million for the year ended 31 December 2014, from TL 462 million in 2013, due mainly to an increase in net interest income and net fees and commission income. As at 31 December 2014, ABank had grown its customer lending by 21% to TL 8.4 billion and customers’ deposits increased by 13% to TL 5.4 billion compared with 31 December 2013.

 

National Bank of Oman and United Arab Bank have achieved a strong financial performance for the year ended 31 December 2014 with a 15% improvement in profitability as compared to 2013.

 

National Bank of Oman (“NBO”) achieved a net profit of OMR 50 million for the year ended 31 December 2014 as compared to OMR 41 million, an increase of 22% over 2013. Net operating income grew by OMR 10 million to OMR 114 million, from OMR 104 million in 2013, mainly due to an increase in net interest income which was up 8% to OMR 81 million. As at 31 December 2014, NBO grew its customer lending by 12% to OMR 2.3 billion and customers’ deposits reduced marginally to OMR 2.2 billion compared to 2013.

 

United Arab Bank (“UAB”) delivered a net profit of AED 605 million for the year ended 31 December 2014 which represents an increase of 9.6% over 2013.The net operating income for the year ended 31 December 2014 increased by 32% to AED 1,373 million, from AED 1,039 million in 2013 with solid underlying performance from both Net Interest Income and Non-Interest Income, up 27.6% and 46.1% respectively, as compared to 2013. UAB’s loans and advances increased by 17.4% to AED 17.9 billion as at 31 December 2014, with customers’ deposits at AED 18.7 billion, up 24.5% compared to 2013.