The Commercial Bank Plaza at West Bay. The premier bank’s total assets stood at QR116.1bn in the first quarter, up 1.8% on the same period last year.
Making a good start to the year at the operating level, Commercial Bank has posted a first-quarter net profit of QR462.5mn.
The Q1 net profit increased by 19.5% compared to QR387mn achieved in the fourth quarter of 2014.
However, due to higher provisioning, the first-quarter financial results represent a 15.7% drop in profitability compared to same period in 2014, Commercial Bank said yesterday.
The premier bank’s total assets stood at QR116.1bn in the first quarter, up 1.8% on the same period last year.
Customer loans and advances reached QR71.9bn in the first quarter, up 4.7% on the same period last year.
Customer deposits, however, were marginally down 0.6% to QAR 61.7bn.
Commercial Bank’s first-quarter results were announced by chairman Sheikh Abdullah bin Ali bin Jabor al-Thani in Doha yesterday.
Sheikh Abdullah said, “Qatar’s economy continues to diversify in line with the Qatar National Vision 2030. Commercial Bank’s results for the first quarter of 2015 reflect the changing dynamics of Qatar’s economy, with robust growth being generated from the private sector. The successful execution of Commercial Bank’s strategy across its operations in Qatar, Turkey, UAE and Oman has resulted in a strong set of financial results for the first quarter of the year.”
Commercial Bank vice-chairman and managing director Hussain Alfardan said, “Commercial Bank has made a good start to the year 2015 at the operating level. The first quarter has seen a solid performance from Commercial Bank, a good quarter from ABank (Turkey) and continued profit growth from our associate banks in the UAE and Oman. These performances have enabled Commercial Bank to deliver a quarterly profit of QR462.5mn.”
Commercial Bank’s net interest income was QR625.5mn for the quarter that ended in March, 0.8% higher than the same period of 2014, reflecting the growth in lending.
ABank contributed QR148.7mn, 23.8% of the total net interest income.
Net interest margin decreased to 2.59% in Q1 compared to the first quarter of 2014 at 2.7%.
Non-interest income was up by 3.7% to QR326.7mn for the quarter that ended in March compared with QR315mn for the same period in 2014.
The increase in non-interest income was due to higher net fees and commission income.
The bank’s net provisions for loans and advances were QR170.2mn for the first quarter, up from QR50.8mn for the same period in 2014; a “low level of provisioning” compared to historic levels. The non-performing loan ratio marginally increased to 3.89% in March compared with 3.8% at the end of December 2014.
The coverage ratio increased to 76.8% in March compared to 74.3% in December 2014.
Commercial Bank delivered a balance sheet growth of 1.8% in March, with total assets at QR116.1bn, compared to QR114bn in Q1, 2014.
Balance sheet growth was driven mainly by an increase of QR3.3bn in lending to customers and QR2.3bn due from banks, partly offset with a decrease of QR2.4bn in investments.
Loans and advances to customers were up by 4.7% to QR71.9bn in March compared with QR68.7bn in Q1, 2014.
The growth in lending since March 2014 has been generated, mainly, in the retail, services, government and commercial sectors, Commercial Bank said.
Commercial Bank chief executive officer Abdulla Saleh al-Raisi said, “The results of the first quarter of the year have been driven by a number of factors. In Qatar, we saw strong growth in lending, particularly in the private sector. Turkey has generated a good performance for the quarter and our Associate banks, UAB and NBO, delivered 9% profit growth.
“Net interest margin has remained firm at 2.59% despite competitive pressure, and we have managed our expenses tightly, with our quarterly cost to income ratio down to 38% from 40% year-on-year. Provisions for the first quarter are in line with the levels we have seen over the past several quarters. The strength the bank has witnessed in the first quarter has continued into the beginning of the second quarter, and we are optimistic about Commercial Bank’s opportunities for profitable growth this year.”
