Commercial Bank Group posted a net profit of QR934mn in the first half of this year, up 9.2% on H1, 2018. The premier Qatari bank’s total assets stood at QR141.3bn in H1, up 1% on the same period last year.
Commercial Bank Group’s loans and advances to customers increased by 1.3% to QR84.8bn in H1, 2019 compared with QR83.7bn in December 2018. The increase was mainly in the government and services sectors.
The Group’s customer deposits increased by 7.8% to QR76.9bn in H1, 2019 compared with QR71.3bn in December 2018 and have resulted in the loan deposit ratio reducing from 117.4% to 110.3%.
Commercial Bank Chairman Sheikh Abdulla bin Ali bin Jabor al-Thani said, “Qatar is progressing well with its economic transformation, strengthening the country’s capital market by taking significant steps to attract inward investment and improve liquidity on its stock exchange through a ten-to-one stock split.
“I am proud that Commercial Bank, as a leading financial institution in Qatar, is able to play a key part in the development of the nation by offering a myriad of innovative banking and financial services to government entities, businesses and retail customers. We had the honour of becoming the first company to implement the stock split and look forward to supporting the continued growth and prosperity of the Qatari economy.”
Commercial Bank Vice-Chairman Hussain Alfardan added, “We continue to see excellent results from the execution of our five-year strategic plan. The bank has developed a strong franchise in Qatar and is renowned for its exceptional client experience and innovative services. We continue to extend our capabilities to better serve the needs of our clients and strengthen our position in the market.”
Commercial Bank’s Group Chief Executive Officer Joseph Abraham commented, “I am pleased to announce a strong set of financial results for the first half of 2019. Consolidated operating profit was QR1.29bn for the first half of 2019, an increase of 7% compared to the same period last year and consolidated net profit was QR934mn in H1, 2019, an increase of 9% compared to the same period in 2018. The strong execution of our five-year strategic plan continues to yield positive results along with the continued focus on productivity enhancements through digitisation of operational processes.
“The increase in consolidated operating profit was driven by careful management of operating expenses and positive contributions from fees and other income. Operating expenses decreased 11% to QR552mn during the first half of 2019 compared with the same period last year, a result of careful cost control and savings from our insourcing programme.
“Fees and other income were up 25% during H1, 2019, compared with the same period last year, to QR629mn. The increase was driven by gains in foreign exchange trading income and investment income. Consolidated net profit was also supported by a reduction in net loan provisioning which declined 2% during H1, 2019, supported by an improved asset quality and increased recovery of NPLs.
“Consolidated net interest income was down by 8% to QR1.21bn during the first half of the year, due to weakness in the Turkish Lira and higher cost of funding in the Qatari market during the first quarter of 2019.
“However, when comparing the second quarter of 2019 with first quarter of 2019, there was an improvement of 9.7% as a result of systematic efforts to improve net interest margins during the quarter. This was achieved through a reduction in the cost of funding through careful management of our cost of deposits and repricing of our loan book.
“Loans and advances were QR84.8bn in the first half of 2019, down 2% compared to the same period last year, largely due to the depreciation of the Turkish lira. Customer deposits increased moderately to QR76.9bn, up 3% in H1 2019, compared to the same period last year.
“The domestic bank reported net profit of QR870mn in H1 2019, an increase of 11% compared to the same period last year. The improvement was largely driven by a reduction in net provisioning which decreased 15% compared to the same period last year. Operating profit increased to QR1.16bn during the period, driven by cost optimisation and an increase in total fees and other income which partially offset the decline in net interest income. Loan and advances to customers were stable at QR73.7bn in H1, 2019. Customer deposits increased 5% to QR67.5bn.
“The lira’s depreciation by nearly 26% compared to the same period last year has impacted Alternatif Bank’s comparatives when translated in terms of Qatari riyal. Alternatif Bank reported an increase in net profit to TL99mn, up 25% compared to the same period last year. In Turkish lira, Alternatif Bank grew customer deposits by 15% and loans and advances by 8%, however in terms of Qatari riyals, currency depreciation led to a 15% decline in loans and advances to customers and a 9% decline in customer deposits.
“NBO — our associate — performed steadily during the first half of 2019, reporting a net profit of OMR25mn. UAB continues to be an asset held for sale.”
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