Business
Commercial Bank posts net profit of QR3,032.1mn in 2024
Commercial Bank’s Board of Directors proposed dividend distribution to shareholders of QR0.30 per share, i.e. 30% of nominal share value
January 21, 2025 | 07:37 PM
Board of directors propose dividend distribution of QR0.30 per share, amounting to 30% of nominal share valueCommercial Bank posted a net profit of QR3,032.1mn in 2024, up 0.7% on the previous year.The overall growth in reported profitability was driven mainly by lower operating cost, lower net provisions and improved performance from Commercial Bank’s associates.The bank’s total assets stood at QR165.8bn last year, up 0.9% on 2023.Loans and advances to customers remained "stable” at QR91.5bn in 2024. The bank reported customer deposits of QR77bn in 2024, up 0.6% on December 2023."The result underscores the consistent strides we continue to make in our journey of growth and innovation,’ Commercial Bank said on Tuesday.Commercial Bank’s Board of Directors proposed a dividend distribution to shareholders of QR0.30 per share i.e. 30% of the nominal share value.The financials and proposed dividend distribution are subject to the Qatar Central Bank approval and endorsement by shareholders at the bank’s Annual General Meeting.Commercial Bank Chairman Sheikh Abdulla bin Ali bin Jabor al-Thani said: "In 2024, Commercial Bank had a positive year, making steady progress in executing its strategic plan while further strengthening its financial position. S&P affirmed the Bank’s credit rating at A-/Stable/A-2, reflecting its solid capitalisation and the support provided by Qatari authorities, recognising the bank’s high systemic importance in Qatar. This affirmation underscores the Bank's financial stability and its key role in the national economy. We remain focused on maintaining this momentum, ensuring continued financial stability, and delivering long-term value for our stakeholders.”Commercial Bank Vice-Chairman Hussain Ibrahim Alfardan said: "Commercial Bank achieved notable progress in 2024, driven by Qatar’s robust economic performance and our focus on sustainable growth. We maintained a strong operational foundation, with disciplined cost management and consistent growth across key segments."Our commitment to sustainability took centre stage this year, marked by the successful issuance of our inaugural Green Bond, raising CHF225mn to fund impactful green projects in Qatar. These efforts earned us the prestigious ‘Best Green Financing Initiative’ and ‘Sustainable and Green Bank of the Year in Qatar’ from the Asian Banker, reflecting our leadership in advancing sustainable finance and environmental responsibility.”Group Chief Executive Officer Joseph Abraham commented: "Commercial Bank delivered a strong and steady performance in 2024, successfully aligning with our strategic objectives and achieving positive financial outcomes. The bank reported a consolidated net profit of QR3,032.1mn, reflecting a 0.7% year-on-year increase, driven by lower operating cost, lower net provisions and improved performance from our associates. Our subsidiary in Turkey incurred a loss of QR85.2mn in 2024 after hyperinflationary accounting, which negatively impacted the 2024 results by 2.8%."While higher market funding costs impacted net interest income, we achieved notable growth in core fee income and other income, which rose by 12.5%. This increase reflects the success of our strategic emphasis on diversifying revenue streams through transaction banking, an expanding card portfolio, and a robust performance in wealth management. These efforts underscore our commitment to adapting to market dynamics while delivering value to our clients."We remain focused on optimising our balance sheet, achieving a 0.9% increase in total assets. Our proactive engagement in debt markets underscores strong investor confidence in our financial stability and our commitment to sustainable growth initiatives.”Abraham noted: "With a robust capital position, including a Common Equity Tier 1 ratio of 12.3% and a Capital Adequacy Ratio of 17.2%, we continue to support growth while maintaining prudent capital levels in line with our guidance."As we continue our journey, we remain steadfast in our commitment to executing our long-term strategy, with a focus on supporting Qatar National Vision 2030. Our dedication to responsible banking and sustainable financing remains at the core of our efforts, and we are reaffirming this commitment as we move forward.”Total assets of QR165.8bn in 2024 was mainly driven by improvement in investment securities, with the bank investing in high-quality market securities. The loans and advances to customers remained stable at QR91.5bn, when compared to 2023.The Group’s cost-to-income ratio increased to 27.9% from 26.2%, due to lower operating income from Turkiye as well as bank’s continued investment in digital innovation and service proposition. Overall, the results highlight the Group’s consistent financial performance and resilience, even amidst market challenges.As of December 31, 2024, the ratio of non-performing loans to gross loans stood at 6.2%, compared to 5.9% (as of December 2023), primarily due to lower gross loan balances as well as from the newly recognised NPLs.In 2024, the Group’s net loan provisions decreased to QR330.4mn, down from QR990.7mn in 2023, driven by higher recoveries and ECL releases which resulted in a Loan Coverage Ratio of 82.2%.Commercial Bank Group’s Common Equity Tier 1 (CET 1) Ratio in end-2024 reached 12.3%. The Capital Adequacy Ratio (CAR) in end-2024 stood at 17.2%, underlining strong capital accretion.These ratios are higher than the regulatory minimum requirements of the QCB and Basel III requirements.In November 2024, Standard & Poor's (S&P) Global Ratings affirmed Commercial Bank's issuer credit ratings at A-/A-2 with a stable outlook.Earlier in 2024, both Fitch and Moody’s affirmed Commercial Bank’s strong credit ratings of "A” and "A2,” respectively, with a stable outlook.Fitch’s rating reflects potential support from Qatari authorities, driven by a stable operating environment and the bank’s "robust franchise and improving profitability”.Similarly, Moody’s stable outlook highlights the Bank’s resilience in capitalization, liquidity, and profitability, while recognising the potential for support from Qatari authorities in times of need.These affirmations of Commercial Bank’s top-tier ratings by S&P, Fitch, and Moody’s underscore strong confidence from institutional, corporate, and retail clients in the bank’s financial performance and strategic outlook.These ratings reflect the bank’s solid financial position, bolstered by its resilience in capitalization, liquidity, and profitability, and its ability to attract support from Qatari authorities if necessary. As a result, investors and market participants are assured of the bank’s capacity for sustainable growth and long-term success, Commercial Bank noted.Commercial Bank made significant strides in capital markets during the year. In the first quarter, the bank successfully priced a $750mn Regulation S 5-year bond, which was oversubscribed 2.4 times and listed on Euronext Dublin, marking its return to the public international capital markets after a three-year hiatus.In the second quarter, the bank closed a $500mn three-year Syndicated Term Loan Facility, which was also oversubscribed 2.3 times, reflecting strong investor confidence.In the third quarter, the bank issued a CHF225mn Green Bond for three years at a coupon rate of 1.7075%, following strong demand from institutional investors.The bank continues to proactively seek diversified 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.
January 21, 2025 | 07:37 PM