Commercial Bank Group has posted a net profit of QR91.2mn in the first quarter of this year, down 66.7% on the same period in 2016.
Qatar’s premier bank has seen its assets increase by 9.5% to QR135.1bn in the first quarter.
The total asset growth was driven mainly by an increase of QR6.5bn in loans and advances and QR3.7bn in investment securities. 
Customers’ deposits were stable at QR71.9bn in March this year, compared with QR72.1bn in the same period in 2016.
Loans and advances to customers increased by 8.6% to QR82bn in March compared with QR75.5bn in the same period last year. The growth in lending has been generated, mainly in services, consumption and industry sectors.
Commercial Bank chairman Sheikh Abdullah bin Ali bin Jabor al-Thani said, “Commercial Bank has started the year on a strong note, with an improved capital position and with the Strategic Reshape Plan well under way. As we look towards Qatar’s future, we have re-aligned the bank’s strategy to focus on sustainable earnings and growth, while continuing to positively contribute to the development of the local economy. AA rated by Fitch, Qatar’s economy is resilient and set for a healthy GDP growth of 3.6% in 2017, which will also support the growth of our bank.”
Commercial Bank vice chairman Hussain Alfardan said, “Commercial Bank delivered an operating profit of QR530.1mn in the first quarter of 2017. Loans have grown by 8.6% year on year at the group level. Growth in lending was driven by services, consumption and industry sectors.”
The group’s net provisions for loans and advances increased by 84.7% to QR478.7mn for the quarter that ended in March, from QR259.1mn for the same period in 2016. 
The non-performing loan (NPL) ratio has remained at 5% in March compared with December 2016. However, loan coverage ratio has increased to 85.9% in March compared with 78.9% in December 2016.
Commercial Bank chief executive officer Joseph Abraham said, “Q1, 2017 has shown early signs of the successful implementation of our Strategic Reshape Plan. The bank delivered solid growth in Qatar and has delivered on the key commitments in our Strategic plan, including strengthening our core capital. 
“We completed the rights issue of QR1.5bn in Q1. In addition, the AGM approved the scrip dividend of 1 share for every 20 shares owned and no cash dividend. We also completed the revaluation of owned fixed assets of QR1.3bn in Q4, 2016. These actions have improved CET1 to over 11% and total CAR to over 16%.
 “At a group level, operating profit before provisioning was QR530.1mn, representing an increase of 4.3% year on year. In line with previous guidance, our provisions will remain elevated for the next few quarters as we continue to ensure the bank’s loan book is adequately and prudently provisioned, in an ongoing process. Consequently, the group reported a net profit of QR91.2mn,” Abraham said. 
 “The lending book has shown growth of 8.6% and CB’s domestic growth has exceeded the market growth in Q1, 2017. We have built a strong pipeline for the public and government sector through a refocused relationship strategy and improved credit approval processes. Consequently, lending growth is now diversified across different sectors as part of our Strategic Reshape plan to reduce reliance on real estate sector alone.
“Costs have been well managed and have shown a 14.7% reduction over the same period in March 2016. Consequently, our cost to income ratio has improved to 40.1% in Q1 2017 as compared to 45% for the same period in 2016.
“Our digital transformation agenda is well underway with many ‘first-in-market’ banking technology advancements already launched during the first quarter to enhance the client experience and also drive increased productivity and efficiency. To that end, we were the ‘first in the market’ to implement a fully electronic voting system during our AGM held earlier this month. Regulator representatives attending the AGM and Commercial Bank’s external auditors both appreciated the use of the electronic voting technology as it simplified the registration, voting and counting of votes’ process for shareholders.”
He said the first quarter saw improvements in ABank’s performance, where “we have managed costs tightly and reduced provisioning”. ABank delivered a net profit of QR14.4mn compared with a net loss of QR55.8mn in Q1, 2016. 
 “NBO reported a profit of QR130.4mn compared to QR72.7mn in Q1, 2016.  
UAB continues to focus on reshaping its business and delivered a profit of QR27.6mn compared to QR44.6mn in Q1, 2016.”