A view of the Commercial Bank headquarters at Doha’s West Bay. Commercial Bank delivered strong balance sheet growth at the end of the first half of 2014, increasing by 31.5% with total assets at QR112.4bn.
Buoyant market conditions in Qatar and other operating countries and a positive outcome from Commercial Bank’s continued investment in the business helped the bank post strong half yearly results with H1 net profit reaching QR1.05bn, up 3% on the same period last year.
Commercial Bank chairman Sheikh Abdullah bin Ali bin Jabor al-Thani said, “Qatar’s economy has seen significant local demand drive with annual GDP figures forecast up to 6.3% from 4.6% for 2014. Growth is being driven by the government’s expenditure on infrastructure to deliver Qatar’s National Vision as well as the positive performance of growth markets in the private sector. The Group also continues to benefit from the buoyant market conditions in our operations in Turkey, the UAE and Oman. Commercial Bank’s first half performance gives us confidence for our full year performance.”
Commercial Bank vice-chairman and managing director Hussain Alfardan said, “Our continued investment in the business has seen a strong set of half year results for Commercial Bank. We have delivered good growth in our profitability with a 3% increase in our half year performance to QR1,051mn.”
Net interest income was QR1.27bn for the half-year that ended in June 2014, 39% higher than in the same period in 2013, reflecting strong growth in lending activities and the consolidation of ABank. ABank contributed QR305mn, 24% of the total net interest income. Net interest margin increased to 2.7% as compared to the first quarter of 2014 at 2.6%.
Non-interest income was up 5. 6% to QR722mn in the first half of 2014 compared with QR684mn for the same period in 2013, with ABank contributing QR128mn. 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, the bank said.
The bank’s net provisions for loans and advances were QR257mn for the six months that ended in June, up from QR194mn provided in the same period for 2013.
The non-performing loan ratio has increased to 3.82% in June, compared with 3.55% at the end of March 2014, and the coverage ratio has increased to 67.3% as on June compared with 65.2% in March 2014.
Impairment provisions on the bank’s investment portfolio increased to QR29mn for the half year that ended in June compared with QR21mn for the same period in 2013.
Commercial Bank delivered strong balance sheet growth at the end of the first half of 2014, increasing by 31.5% with total assets at QR112.4bn, which includes QR18.8bn of assets from ABank, compared with QR85.4bn in the same period in 2013.
Balance sheet growth was driven mainly by an increase of QR17.4bn in lending to customers combined with an increase of QR4.1bn in investment securities.
Loans and advances to customers were up by 33% to QR69.4bn in June compared with QR52bn in June 2013, up by 4% from QR66.9bn in December 2013. The growth in lending since June 2013 has been generated, mainly, in the government, industry and real estate sectors.
Customers’ deposits have grown by 27.6% to QR59.8bn in June, compared with QR46.9bn in June 2013, supporting Commercial Bank’s growth in lending.
Commercial Bank Group chief executive officer Andrew Stevens said, “Commercial Bank is focused on increasing its return on capital to deliver growing shareholder value. This is being generated through the development of sustainable and high quality income from our banking businesses in Qatar, Turkey, the UAE and Oman. Our first half financial results illustrate how we have re-shaped our business to deliver against this strategic objective.”
Commercial Bank chief executive officer Abdulla Saleh al-Raisi said, “We have continued to make significant progress in implementing our strategy in Qatar during the first half of the year. The market remains competitive, but we are making good progress as we defend and drive our profitability in wholesale by targeting a growing share of government business as well as other growth sectors within the private sector.
“We continue to pursue our strategic objective of growing our market share in retail by offering multi-channel market leading products and services at competitive rates while also offering an increasingly sophisticated service for our high net worth retail customers.”