The Commercial Bank (P.S.Q.C.) Announces Net Profit of QAR 1,504 Million for the nine months ended 30 September 2019

Doha, Qatar: The Commercial Bank (P.S.Q.C.) (“the Bank”), its subsidiaries and associates (“Group”) announced today its financial results for the nine months ended 30 September 2019. The Group reported a net profit of QAR 1,504 million as compared to QAR 1,260 million for the same period in 2018, an increase of 19.4%.

 

 

•    Net profit of QAR 1,504 million, up by 19.4%

•    Operating income of QAR 2,853 million, up by 7.1%

•    Cost to income ratio of 28.9%, reduced from 33.5%

•    Net provisions QAR 624.8 million, down by 0.9%, NPL ratio reduced from 5.5% to 4.9% and coverage improved from 83.6% to 95.2%

•    Total assets of QAR 145.7 billion, up by 5.0%

•    CET1 improved from 9.7% to 11.0% and total CAR improved from 14.6% to 16.2%

•    Customer loans and advances of QAR 89.1 billion, up 5.1%. Growth in Government and Public Sector.

•    Best Cash Management Bank in Qatar award for the third year in a row, and Best Transaction Banking service in Qatar from “The Asian Banker”

•    Best Retail Bank in Qatar award for the third year in a row and  “Financial Technology Innovation Award 2019” for the 60 Seconds Online Remittance service and digital innovations

•    Best Corporate Governance in Qatar 2019 award by World Finance.

 

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.”

 

 

Mr. 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.”

 

Operating profit for the Group increased by 14.6% to QAR 2,029 million for the nine months ended 30 September 2019, compared to QAR 1,771 million achieved in the same period in 2018. 

 

Net interest income for the Group increased by 1.6% to QAR 1,939 million for the nine months ended 30 September 2019 compared to QAR 1,908 million achieved in the same period in 2018. Net interest margin increased to 2.3% for the nine months ended 30 September 2019 compared to 2.2% achieved in the same period 2018. The increase in margins is mainly due to Asset book increase with higher yielding assets. NIM has improved quarter on quarter from 2.2% in Q2 2019 to 2.4% in Q3 2019.

 

Non-interest income for the Group increased by 21.1% to QAR 914 million for the nine months ended 30 September 2019 compared with QAR 755 million in the same period 2018. 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% to QAR 824.1 million for the nine months ended 30 September 2019 compared with QAR 892.4 million in the same period in 2018. Costs reductions were primarily driven by lower staff and administrative expenses.

 

The Group’s net provisions decreased by 0.9% to QAR 625 million for the nine months ended 30 September 2019, from QAR 631 million in the same period in 2018. The non-performing loan (NPL) ratio has reduced to 4.9% at 30 September 2019 compared to 5.5% in the same period 2018. The loan coverage ratio has increased to 95.2% at 30 September 2019 compared to 83.6% in the same period 2018.

 

The Group balance sheet has increased by 7.9% at 30 September 2019 with total assets at QAR 145.7 billion, compared to QAR 138.7 billion in the same period. The increase was mainly in loans and advances and investment securities.

 

The Group’s loans and advances to customers increased by 5.1% to QAR 89.1 billion at 30 September 2019 compared with QAR 84.6 billion in the same period in 2018. The increase was mainly in the government and public sector.

 

The Group’s investment securities increased by 24.8% to QAR 27.0 billion at 30 September 2019 compared with QAR 21.7 billion in the same period in 2018. The increase is mainly in Government bonds.

 

The Group’s customer deposits reduced by 0.8% to QAR 74.3 billion at 30 September 2019 compared with QAR 74.9 billion in the same period 2018.

 

Mr. 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% for the first nine months of 2019 to QAR 1.5 billion, 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 QAR 2.85 billion, an increase of 7.1% compared to the same period last year. The increase was driven by gains in non-interest income, which was up by 21.1% to QAR 914.2 million, 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% and 282%, respectively.

 

“Supported by the digitisation of our processes and careful resource management, operating expenses declined to QAR 824 million, down 7.6% compared to the same period last year. Consequently, we improved our cost to income ratio to 28.9% for the period (2018: 33.5%). 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 QAR 2.03 billion, up by 14.7% compared to the same period last year.

 

 “Despite the low interest rate environment globally, we increased NIMs to 2.3% for the nine months ended 30 September 2019 compared to 2.2% in the same period 2018, and NII is higher by 1.6% compared to last year.  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. Net loan provisioning declined 0.9% during the first nine months of 2019, supported by improved asset quality and increased recovery of NPLs, contributing to the growth of our bottom line.

 

“Loans and advances were QAR 89.1 billion at September 30 2019, up 5.1% compared to the same period in 2018 and customer deposits reduced by 0.8% to QAR 74.3 billion.

 

“The Domestic Bank reported a net profit of QAR 1.36 billion during the first nine months of 2019, an increase of 18% compared to the same period last year. The improvement was largely driven by growth in operating profits. Operating profit increased to QAR 1.83 billion during the first nine months of 2019, up 9% compared to the same period last year, driven by an increase in operating income. Loans and advances to customers increased 4.4% to QAR 77.1 billion at 30 September 2019, whilst customer deposits declined 3% to QAR 64.3 billion.

 

“Despite the depreciation of the Lira by circa 2.5% compared to the same period last year, Alternatif Bank reported an increase in net profit to QAR 109 million, up 47% compared to the same period last year. Alternatif Bank grew customer deposits by 17% and loans and advances by 10% at 30 September 2019, compared to the same period last year.

 

“Our Associate, NBO, performed steadily during the first nine months of 2019, reporting a net profit of QAR 362 million. UAB continues to be an asset held for sale.”