The Commercial Bank (P.S.Q.C.) Financial Results For The Three Months Ended 31 March 2025
16 April 2025
The Commercial Bank (P.S.Q.C.) Financial Results For The Three Months Ended 31 March 2025
The Commercial Bank (P.S.Q.C.) reports first quarter 2025
Net Profit after Tax of QAR 651.4 million
Key Highlights
- Net Profit after Tax of QAR 651.4 million.
- Net Profit before the impact of Pillar Two Taxes of QAR 704.3 million.
- Total Assets of QAR 169.1 billion, up by 1.7% from March 2024.
- Loans and Advances to Customers of QAR 94.9 billion, up by 5.8% from March 2024.
- Customer Deposits of QAR 76.4 billion, down by 3.8% from March 2024.
- Strong Capital Adequacy Ratio at 17.1%.
- Total Equity of QAR 25.7 billion, up by 1.6% from March 2024.
- First bank in Qatar to offer 24/7 USD Cross Border Transfers.
Doha, Qatar, 16 April 2025:
The Commercial Bank (P.S.Q.C.) (the “Bank”), its subsidiaries and associates (“Group”) announced today its financial results for the three months ended 31 March 2025.
The Group reported a Net Profit before Pillar Two Tax of QAR 704.3 million for the three months ended 31 March 2025 as compared to QAR 801.6 million for Q1 2024. The 12% variance was due to the increased losses of QAR 31.9 million from Alternatif Bank in Q1 2025 as compared to the previous year and due to long-term incentive scheme (LTIS) related changes of QAR 84.8 million. If normalized for the LTIS related changes, the adjusted net profit before tax for Q1 2025 would be lower by QAR 12.5 million which equates a 1.7% decrease.
Due to the likely implementation of the Global Minimum Tax of 15% (Base Erosion and Profit Shifting - BEPS Pillar Two Tax), a tax charge of QAR 52.9 million was deducted. Overall, these items resulted in a decrease in reported net profit after tax of 18.7% compared to QAR 801.6 million in the same period last year.
Commercial Bank held its Annual and Extraordinary General Meetings on 20 March 2025, during which shareholders approved all agenda items, including the Board’s recommendation to distribute a cash dividend of QAR 0.30 per share.
Sheikh Abdulla bin Ali bin Jabor Al Thani, Chairman, said,
“Commercial Bank continues to make strong progress towards our vision of becoming Qatar’s leading bank, delivering the world’s best client experience through innovation and digital excellence. Now in the fourth year of our five-year strategic plan (2022–2026), we remain focused on disciplined execution and long-term value creation, and strive to improve our performance in the coming months. As we build on the foundations laid over the past three years, we are fully aligned with Qatar National Vision 2030 and committed to supporting the nation’s growth while delivering exceptional service and sustainable returns to our customers and shareholders.”
Mr. Hussain Alfardan, Vice Chairman, said,
“As we celebrate 50 years of banking excellence and digital innovation, Commercial Bank remains focused on driving forward-looking initiatives that support Qatar’s national ambitions and deliver lasting value. In the first quarter of 2025, we took another meaningful step by collaborating with Citi to become the first bank in Qatar to offer 24/7 USD Cross Border Transfers. This milestone enhances the speed, flexibility, and convenience of international transactions for our clients, reflecting our continued investment in cutting-edge digital solutions. It also underscores our role as a trusted enabler of Qatar’s vision to be a global leader in both finance and technology.”
Mr. Joseph Abraham, Group Chief Executive Officer, commented,
“Commercial Bank delivered a resilient performance in the first quarter of 2025, reflecting disciplined execution of our strategy and a continued focus on long-term value creation. The Bank reported a consolidated net profit after tax of QAR 651.4 million, driven by strong growth in fee and other income, improved contribution from associates, and lower net provisions.
Our strategic focus on diversifying income streams continues to yield results, with total fee and other income increasing year-on-year, supported by robust performance in transaction banking, growing cards portfolio, and enhanced wealth management. This helped offset pressure on net interest income to an extent, which was impacted from a downwards interest rate revisions. Meanwhile, our subsidiary in Turkey, Alternatif Bank, reported a loss of QAR 31.9 million, primarily reflecting the impact of hyperinflationary accounting and market volatility.
We remain focused on optimising the balance sheet, achieving a 1.7% increase in total assets. Further, we continue to grow our low-cost deposits, which increased by 5.7% year on year, reflecting our efforts to diversify funding sources and strengthen balance sheet resilience. Our capital position remains robust, with a CET1 ratio of 12.3% and a Capital Adequacy Ratio of 17.1% as we continue to support growth while maintaining prudent capital levels in line with our guidance.
Looking ahead, we are committed to delivering value for our stakeholders by executing on our strategic priorities, advancing sustainable finance, and supporting Qatar’s National Vision 2030. Our performance in first quarter 2025 reinforces our ability to adapt, innovate, and grow in a dynamic regional and global environment.”
Key indicators of the financial results for the quarter ended 31 March 2025 were as follows:
Financial Highlights
|
QAR million |
March 2025 |
March 2024 |
Change % |
|
|
|
|
|
|
Total Assets |
169,067.0 |
166,239.8 |
1.7% |
|
Loans and Advances to Customers |
94,864.1 |
89,676.7 |
5.8% |
|
Customer Deposits |
76,383.9 |
79,364.2 |
-3.8% |
|
Total Equity |
25,708.8 |
25,292.8 |
1.6% |
|
|
|
|
|
|
Net Operating Income |
1,131.1 |
1,249.4 |
-9.5% |
|
Operating Expenses |
(350.6) |
(236.8) |
-48.1% |
|
Operating Profit |
780.5 |
1,012.5 |
-22.9% |
|
Net Provisions |
(149.1) |
(240.5) |
38.0% |
|
Share of Results of Associates |
97.2 |
78.7 |
23.5% |
|
Net Monetary Losses Due to Hyperinflation |
(24.5) |
(40.6) |
39.7% |
|
Income Tax Expense |
0.3 |
(8.6) |
103.5% |
|
Net Profit Before BEPS Pillar Two Taxes |
704.3 |
801.6 |
-12.1% |
|
BEPS Pillar Two Taxes |
(52.9) |
- |
-100.0% |
|
Net Profit |
651.4 |
801.6 |
-18.7% |
|
Key Performance Indicators |
March 2025 |
March 2024 |
|
|
|
|
|
Cost to Income Ratio |
31.0% |
19.0% |
|
Cost of Risk – COR (bps) – gross |
72 |
89 |
|
Cost of Risk - COR (bps) – net |
34 |
58 |
|
Non-Performing Loan (NPL) Ratio |
5.9% |
6.0% |
|
Loan Coverage Ratio |
85.4% |
107.0% |
|
Common Equity Tier 1 (CET 1) Ratio |
12.3% |
11.7% |
|
Capital Adequacy Ratio (CAR) |
17.1% |
16.4% |
Balance sheet: Total Assets as at 31 March 2025 reached QAR 169.1 billion, an increase of 1.7% from 31 March 2024. This is mainly driven by an increase in loans and advances to customers and an increase in investment securities. The investment securities increased by 23.5% to reach QAR 34.7 billion, with the Bank investing in high-quality market securities. The loans and advances to customers increased to QAR 94.9 billion, up by 5.8% due to higher government & public sector borrowings.
Debt securities rose to QAR 10.5 billion as the Bank diversified its funding sources. Furthermore, customer deposits is at QAR 76.4 billion as we have strategically reduced high cost funding, while growing low-cost deposits by 5.7%, which represents 41.0% of the total customer deposits mix.
Income statement: Commercial Bank reported a consolidated net profit after tax of QAR 651.4 million for the three months ended 31 March 2025, down by 18.7% compared to Q1 2024, which includes a BEPS Pillar Two Tax charge of QAR 52.9 million and a reported loss of QAR 31.9 million for the period from our subsidiary in Turkey, Alternatif Bank.
The net interest income was impacted by lower interest income and higher funding costs. Despite this, the Group saw a strong growth in non-interest income, which rose 19.8%, driven by higher fee and commission-based income.
The Group’s reported Q1 2025 cost-to-income ratio increased to 31.0% due to lower operating income and higher cost as a result of Bank’s continued investment in people, digital innovation and service proposition as well as cost increases coming from Turkey. Further, the lower expenses in Q1 2024 were also attributed to decreased staff related LTIS costs, a consequence of IFRS 2 due to the decline in share price.
Net provisions declined 38.0%, supported by higher recoveries and strong performance was evident by associates whose contributions improved by 23.4%.
Credit quality: As of 31 March 2025, the ratio of non-performing loans to gross loans stood at 5.9%, compared to 6.0% as of 31 March 2024. In Q1 2025, the Group’s net loan provisions decreased to QAR 78.0 million, down from QAR 130.4 million in Q1 2024, driven by higher recoveries. As of 31 March 2025, Loan Coverage Ratio is 85.4%. This approach underscores our ongoing focus on maintaining asset quality and reinforcing our commitment to long-term financial sustainability.
Capital ratios: The Group’s Common Equity Tier 1 (CET 1) Ratio as at 31 March 2025 reached 12.3%. The Capital Adequacy Ratio (CAR) as at 31 March 2025 stood at 17.1%, underlining strong capital accretion. These ratios are higher than the regulatory minimum requirements of the Qatar Central Bank and Basel III requirements.
BEPS Pillar Two Taxes
The Group has accrued for BEPS Pillar Two Taxes with effect from 1 January 2025 based on the applicable rules under Base Erosion and Profit Shifting (BEPS) Pillar Two Anti Global Base Erosion ("GloBE") Rules. The Rules have multiple mechanisms that aim to ensure that qualified multinational enterprises maintain a minimum effective tax rate of 15% calculated based on the excess taxable profits in every jurisdiction in which The Commercial Bank operates. The incremental impact of these new taxes amounted to QAR 52.9 million for the three months ended 31 March 2025.
Credit ratings highlight the Bank’s robust resilience
Commercial Banks credit ratings remain strong as all three major rating agencies had affirmed the ratings at:
- S&P: A- / Stable / A-2
- Fitch: A / Stable / F1
- Moody’s:A2 / Stable / P-1
These ratings reflect continued confidence in the Bank’s financial strength, underpinned by solid capitalization, liquidity, and profitability, as well as the stable operating environment in Qatar. They also acknowledge the potential for sovereign support if ever required.
The consistency across agencies reinforces Commercial Bank’s credibility and strategic position, providing a strong platform for long-term value creation.
Diversified funding sources
The Bank continues to proactively diversify its funding sources to support its growth initiatives and enhance liquidity. It remains focused on securing competitive, sustainable financing options that align with its long-term strategy, further strengthening its financial position and capacity to meet the evolving needs of its customers and stakeholders.
Reinforcing our commitment to sustainability
Commercial Bank remains fully aligned with Qatar National Vision 2030 and the country’s environmental and climate strategy. Building on recent milestones in green financing and ESG performance, the Bank continues to embed sustainability into its operations, funding strategy, and risk framework. Ongoing efforts are focused on responsibly channelling capital toward impactful initiatives, including sustainable water and wastewater management, green buildings, and clean transportation. As part of its long-term vision, Commercial Bank is committed to driving sustainable growth while creating lasting value for clients, communities, and shareholders.
Empowering innovation, talent, and community impact
Commercial Bank continues to advance its position as a leading innovator and purpose-driven organization in Qatar through a range of strategic initiatives launched in early 2025:
- Pioneering digital banking services:
In a regional first, the Bank partnered with Citi to launch 24/7 USD Cross Border Transfers, leveraging Citi’s cutting-edge USD Clearing technology. This innovation allows clients to initiate USD transfers anytime, enhancing convenience and cross-border payment efficiency for businesses operating across time zones.
- Developing future leaders:
The launch of the Barzan Leadership Development Program reinforces the Bank’s long-standing focus on talent development. The program is designed to cultivate future leaders, enhance Qatari capabilities, and strengthen internal succession planning in line with Qatar National Vision 2030.
- Supporting national talent through Tawteen:
The Bank proudly deepened its commitment to local talent development by participating in the Tawteen Initiative, a Ministry of Labor-led nationalization program. Through this initiative, Qatari trainees have embarked on a structured six-month program, gaining hands-on experience in core banking functions.
- Celebrating 50 years of excellence through Sport:
The 28th edition of the Commercial Bank Qatar Masters concluded successfully, coinciding with the Bank’s 50th anniversary. As a longstanding sponsor of this prestigious DP World Tour event, Commercial Bank reaffirmed its role in promoting Qatar’s international sporting profile while celebrating five decades of innovation and service excellence.
About Commercial Bank
Commercial Bank, incorporated in 1974 as the first private bank in the country, celebrates its 50th anniversary this year. It stands as one of Qatar's leading financial institutions, with a profitable track record since its inception, and is the second-largest conventional bank in Qatar. Today, the Bank continues to play a pivotal role in driving innovation and raising banking service standards across the region through investment in new technology, a strong customer focus, and prudent management.
For further information, visit: Investor Relations | Commercial Bank of Qatar (cbq.qa)
For investor-related queries, please contact CB Investor Relations team on ir@cbq.qa