Commercial Bank Group posted a first quarter (Q1) net profit of QR702.3mn, up 16.5% on the same period in 2021.
The Group’s first quarter customer loans and advances totalled QR98.4bn, down by 1% (QR99.4bn) from March 2021, but up 0.4% from December 2021.
The decrease was mainly due to Turkish lira conversion to Qatari riyals. Excluding FX impact, the underlying loans increased by 1% despite the payout of the temporary overdraft by the government.
The bank’s customer deposits stood at QR84.5bn in the first quarter, up 3.3% on March 2021 and up 3.2% on December 2021.
The increase was mainly in low cost deposits, which increased by 10.9% due to the various cash management initiatives and digital products that the bank offers.
The Group balance sheet has increased by 5.1% as at March 31, 2022 with total assets at QR171.5bn, compared with QR163.1bn in March 2021. The increase was mainly due to increase in balances with Central Bank and investment securities.
Commercial Bank chairman Sheikh Abdulla bin Ali bin Jabor al-Thani said, “Qatar continued to demonstrate resilience in overcoming the challenges faced by global economies during the past two years, whilst retaining its title as one of the region’s strongest economies and among the most promising economies, globally.
The decrease was mainly due to Turkish lira conversion to Qatari riyals. Excluding FX impact, the underlying loans increased by 1% despite the payout of the temporary overdraft by the government.
The bank’s customer deposits stood at QR84.5bn in the first quarter, up 3.3% on March 2021 and up 3.2% on December 2021.
The increase was mainly in low cost deposits, which increased by 10.9% due to the various cash management initiatives and digital products that the bank offers.
The Group balance sheet has increased by 5.1% as at March 31, 2022 with total assets at QR171.5bn, compared with QR163.1bn in March 2021. The increase was mainly due to increase in balances with Central Bank and investment securities.
Commercial Bank chairman Sheikh Abdulla bin Ali bin Jabor al-Thani said, “Qatar continued to demonstrate resilience in overcoming the challenges faced by global economies during the past two years, whilst retaining its title as one of the region’s strongest economies and among the most promising economies, globally.
“Furthermore, Qatar’s GDP is forecast to rise from $161bn in 2021 to $201bn in 2025, and confidence in Qatar’s economy is also witnessing significant growth following the government’s legislative and regulatory efforts to attract businesses – factors which augur well for Commercial Bank and have contributed to the bank’s strong start to 2022.”
Commercial Bank’s vice chairman Hussain Alfar
dan added, “With the upcoming FIFA World Cup, Commercial Bank has continued to invest in upscaling its digital service offering, to ensure seamless banking for all our existing and new customers. In line with this, Commercial Bank was recognised by several organisations for our position as a leader in banking innovation.
Commercial Bank’s vice chairman Hussain Alfar
dan added, “With the upcoming FIFA World Cup, Commercial Bank has continued to invest in upscaling its digital service offering, to ensure seamless banking for all our existing and new customers. In line with this, Commercial Bank was recognised by several organisations for our position as a leader in banking innovation. “In March 2022, Commercial Bank’s shareholders approved to increase the non-Qatari ownership threshold in the capital of the Bank up to 100%, a step that will further help to improve the attractiveness of the Qatar stock market and Commercial Bank shares as the 100% foreign ownership limit (FOL) is often a requirement for many investment funds to enter a market and invest.”
Commercial Bank Group’s net provisions for loans and advances increased by 11.2% to QR236.2mn for the quarter that ended in March 2022, from QR212.5mn in the same period in 2021.
The increase in provisions was mainly due continued prudent provisioning on NPL customers.
The non-performing loan (NPL) ratio increased to 4.6% at March 31, 2022 from 4.2% in March 2021, however this has decreased from 4.7% in December 2021.
The loan coverage ratio decreased to 100.2% in March compared with 105.9% in March 2021, but increased from 97.4% in December 2021.
Commercial Bank’s Group Chief Executive Officer Joseph Abraham commented, “I am pleased to report a good start to the year as our financial performance for the first quarter demonstrates the strong execution of our strategy.
“The Group reported consolidated net profit of QR702.3mn for the period, up 16.5% compared to the same period last year, driven by an improvement in net interest income.
“Group net interest income for Q1, 2022 increased by 11.4% to QR953.8mn compared to the same period last year. The increase was driven by continued effective management of cost of funding and improvement in interest income.
“Normalised total fees and other income in Q1, 2022 stood at QR262.4mn, an increase of 13.8% compared to the same period last year, driven by an increase in FX and trading income. Overall operating income increased by 11.9%.
“Normalised operating expenses reduced by 6.1% reflecting strong jaws and positively on the cost-to-income ratio, which reduced to 22.5% from 26.8% during the same period last year. Consequently, operating profit in Q1, 2022 increased 18.6% to QR942.5mn compared to the same period last year.
“The domestic bank improved its normalised cost to income ratio to 20.4%, down from 22.2% for the same period last year as the bank continues to focus on improving income and driving efficiencies.
“Net provisions are in line with the guidance provided on cost of risk as we continue our conservative provisioning approach.
“Group loans and advances were QR98.4bn in Q1, 2022, down 1% compared to the same period in the previous year. This was mainly driven by a reduction in government and public sector loans due to the strong fiscal position and also forex translation moves in Turkey. Net of the forex adjustment, loans still grew by 1%.
“Customer deposits increased to QR84.5bn, up by 3.3%, which is driven by low-cost deposits, which increased by 10.9%. Commercial Bank is fully compliant with the new loan-to-deposit ratio that has been issued by the Qatar Central Bank.
“Alternatif Bank’s performance in the first quarter of 2022 showed improved profitability. The bank reported a net profit of QR34.4mn during the period compared to a net loss of QR20.7mn for the same period in 2021.
“The impact from our share of associates in 2022 improved by 70.6% compared to 2021 driven mainly by improved performance at our associate banks, National Bank of Oman and United Arab Bank. We expect our associate banks to continue to improve their performance and contribution during the year.”
Commercial Bank Group’s net provisions for loans and advances increased by 11.2% to QR236.2mn for the quarter that ended in March 2022, from QR212.5mn in the same period in 2021.
The increase in provisions was mainly due continued prudent provisioning on NPL customers.
The non-performing loan (NPL) ratio increased to 4.6% at March 31, 2022 from 4.2% in March 2021, however this has decreased from 4.7% in December 2021.
The loan coverage ratio decreased to 100.2% in March compared with 105.9% in March 2021, but increased from 97.4% in December 2021.
Commercial Bank’s Group Chief Executive Officer Joseph Abraham commented, “I am pleased to report a good start to the year as our financial performance for the first quarter demonstrates the strong execution of our strategy.
“The Group reported consolidated net profit of QR702.3mn for the period, up 16.5% compared to the same period last year, driven by an improvement in net interest income.
“Group net interest income for Q1, 2022 increased by 11.4% to QR953.8mn compared to the same period last year. The increase was driven by continued effective management of cost of funding and improvement in interest income.
“Normalised total fees and other income in Q1, 2022 stood at QR262.4mn, an increase of 13.8% compared to the same period last year, driven by an increase in FX and trading income. Overall operating income increased by 11.9%.
“Normalised operating expenses reduced by 6.1% reflecting strong jaws and positively on the cost-to-income ratio, which reduced to 22.5% from 26.8% during the same period last year. Consequently, operating profit in Q1, 2022 increased 18.6% to QR942.5mn compared to the same period last year.
“The domestic bank improved its normalised cost to income ratio to 20.4%, down from 22.2% for the same period last year as the bank continues to focus on improving income and driving efficiencies.
“Net provisions are in line with the guidance provided on cost of risk as we continue our conservative provisioning approach.
“Group loans and advances were QR98.4bn in Q1, 2022, down 1% compared to the same period in the previous year. This was mainly driven by a reduction in government and public sector loans due to the strong fiscal position and also forex translation moves in Turkey. Net of the forex adjustment, loans still grew by 1%.
“Customer deposits increased to QR84.5bn, up by 3.3%, which is driven by low-cost deposits, which increased by 10.9%. Commercial Bank is fully compliant with the new loan-to-deposit ratio that has been issued by the Qatar Central Bank.
“Alternatif Bank’s performance in the first quarter of 2022 showed improved profitability. The bank reported a net profit of QR34.4mn during the period compared to a net loss of QR20.7mn for the same period in 2021.
“The impact from our share of associates in 2022 improved by 70.6% compared to 2021 driven mainly by improved performance at our associate banks, National Bank of Oman and United Arab Bank. We expect our associate banks to continue to improve their performance and contribution during the year.”