Qatar has remained resilient through the Covid-19 pandemic, due to its strong leadership and the Government’s economic stimulus measures and Commercial Bank is implementing these measures in support of it customers and the Government, says Commercial Bank chairman Sheikh Abdulla bin Ali bin Jabor al-Thani
Commercial Bank Group has posted a nine-month net profit of QR1.15bn compared to QR1.47bn in the same period last year.
The total assets of the Group stood at QR143.1bn, down 1.7% compared to the same period in 2019.
Commercial Bank registered customer loans and advances of QR90.5bn during the nine-month period, up 1.5% on the same period last year.
Commercial Bank chairman Sheikh Abdulla bin Ali bin Jabor al-Thani said, “Qatar has remained resilient through the Covid-19 pandemic, due to its strong leadership and the Government’s economic stimulus measures. Commercial Bank is implementing these measures in support of our customers and the Government, and we are currently one of the largest providers of loans to SMEs and sectors particularly affected by Covid-19 under the National Response Guarantee Programme.
“Commercial Bank’s achievements during the quarter were recognised by a number of publications and industry bodies and we have received several awards including: ‘Best Digital Bank’ from AsiaMoney Magazine, ‘Best Retail Bank’ in Qatar from the Asian Banker for the fourth consecutive year and ‘Best Performing Bank’ in Qatar from The Banker.”
Commercial Bank vice chairman Hussain Alfardan said, “The strong execution of Commercial Bank’s five year strategic plan has been positively received by the market, as evidenced by the successful launch of our senior unsecured five-year bond worth $500mn in September, which was oversubscribed 3.8 times. The new bond was at one of the lowest prices achieved by a Qatari FI issuer on a public transaction.
“This demonstrates the efforts we have made to manage our cost of funding in the prevailing low interest rate environment. We also attribute the success of the bond sale to Qatar’s economic strength and fiscal buffers, which have attracted positive views from global investors.”
Commercial Bank Group chief executive officer Joseph Abraham commented, “Commercial Bank has delivered a good set of results given the unusual environment in which we are operating. This is due to our prudent approach and our investments in digital technologies which have enabled us to rapidly adapt to an evolving environment during the Covid-19 pandemic.
“Net profit before associates and taxes increased by 22.3% to QR1.7bn during the first nine months of 2020 compared to the same period last year, supported by growth in net interest income and improved recoveries during the period.
“Consolidated net profit for the period was down 22% to QR1.2bn, due to increased impairment of our associate UAB and difficult market conditions in Turkey, which impacted Alternatif Bank’s performance. The domestic Bank reported a net profit of QR1.7bn for the first nine months of 2020, representing an increase of 23.9% compared to the same period last year.
“Group net interest income for the first nine months of 2020 increased 19.8% to QR2.3bn (normalised 19.2%) compared to the same period last year, despite the current low interest rate environment, as we carefully managed our cost of funding to ensure interest expense declined faster than interest income.
“This helped offset declines in total fees and other income, which were down 17.9% to QR751mn (normalised 10.3% to QR820.5mn) during the period, driven by investment income volatility.
“Consolidated operating income increased 7.8% to QR3.1bn (normalised 9.8%) during the first nine months of 2020 compared to the same period last year, supported by improved NIMs and our focus on cost optimisation. Commercial Bank’s cost to income ratio improved to 25% (normalised 26.4%) from 28.9% for the same period last year, as we continue to invest in technology to streamline our operations and maintain current opex levels.
“Gross loan provisioning for the period increased 13.5% compared to the previous year, reflecting our prudent approach of factoring in the Covid-19 impact on our ECL models. This was partially offset by recoveries of QR326.7mn during the period; consequently net loan provisioning was QR487.1mn, down 16.9% compared to the same period last year.
“Group loans and advances were QR90.5bn at the end of the first nine months of 2020, up 1.5% compared to the same period in the previous year, and customer deposits reduced to QR73.1bn. Our focus on low cost deposits continues to yield results, with consolidated low-cost deposits growing 14.1% during the period, contributing to the improvement in NIMs.
“Alternatif Bank’s performance for the first nine months of 2020 was impacted by the softening of the Turkish economy and 15.9% depreciation of the Turkish lira. Despite these challenges, Alternatif Bank reported a profit of QR53.6mn during the period. The bank’s customer deposits at the end of the period were QR8.6bn and its loans and advances to customers were QR10.6bn.
“The impact from our share of associates during the nine months of 2020 was negative as we took an impairment on UAB in line with our guidance to bring the book value of the asset closer to its fair value.”