Commercial Bank has reported a net profit of QR491mn for nine months up to September, it said yesterday.
The bank’s total assets scaled up to nearly QR124bn as of September 30, up 4% on the same period last year. Total asset growth was driven mainly by an increase of QR 2.6bn in loans and advances and QR3.6bn in due from banks and offset by lower investment in securities by QR2bn.
Customer loans and advances were up by 4% to QR76bn, while customers’ deposits were up 4% to QR66.7bn in September.
The growth in lending has been generated, mainly in services and commercial sectors. The increase in customer deposits was mainly in time deposits, Qatar’s premier bank said.
The bank has seen earnings per share (EPS) of QR1.04 in September.
Commercial Bank chairman Sheikh Abdullah bin Ali bin Jabor al-Thani said, “Commercial Bank has proudly served the financial needs of its customers for over 40 years by always looking forward to the future.  I, together with my fellow Board members, are resolved to maintain the development of Commercial Bank.  Through our new executive leadership, and under the guidance of the Board, we are taking necessary decisions now to reshape a strong Commercial Bank for the future. Commercial Bank continues to have great potential to generate long-term value for our customers and investors.  Our decisions now will ensure that we unlock the bank’s full potential.”
Vice chairman and managing director Hussain Alfardan, said, “Commercial Bank reported an operating profit of QR1.4bn for the nine months that ended on September 30. During this period, we aligned our local market strategies to the current challenging realities, pursuing only those opportunities which meet our returns criteria.  Our discipline will be maintained as we continue to serve our customers.”
The bank’s net provisions for loans and advances were QR1.1bn for nine months up to September, up 104% from QR544mn for the same period in 2015. The non-performing loan (NPL) ratio has increased to 5.3% in September compared with 3.6% at the end of September last year and the coverage ratio was 78.8% as on September 30 compared to 81.3% in September 2015.
Impairment provisions on the bank’s investment portfolio increased to QR68mn compared with QR25mn in 2015.
Commercial Bank chief executive officer Joseph Abraham said, “Since joining Commercial Bank in July, we are completing a review of the bank’s strategy, performance and future direction and we will update the market with the results of our review later this year.  However, one clear action became evident early in the process, which was the need for us to recognise a number of non-performing loans.  The decision we have taken to provide for an additional QR505mn of loans in the third quarter has consequently impacted our financials.  Both the Board and the bank’s leadership team view this as the necessary first step in aligning the business for the current and future economic environment and ensuring Commercial Bank builds sustainable earnings and is well positioned for the future.”
He added, “During the period, we continued to manage the business conservatively, reflecting both the challenges and opportunities of the current market. Qatar generated a solid financial performance excluding provisioning with QR431mn operating profit for the third quarter.  Our Turkish subsidiary, ABank, has been aligned more closely in its working with Commercial Bank and with the injection of new equity and a Tier 2 issuance raised in the first half of the year; we had the funds to pursue loans in the corporate mid-market. However, loan growth was limited as we remained highly selective of opportunities. Most importantly, we brought operational costs down by 5% at ABank during the period. UAB continues to successfully recover as its management team execute upon the realignment of the business to the UAE’s corporate market, whilst NBO in Oman has performed well.”