Sheikh Abdulla bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank
Doha: The Commercial Bank, its subsidiaries and associates (Group) announced yesterday a net profit of QR1.15bn for the nine months ended September 30, 2020 compared to QR1.48bn for the same period in 2019.
Operating profit for the Group increased by 13.7 percent to QR2,306.6m for the nine months ended September 30, 2020, compared to QR2,028.9m achieved in the same period in 2019.
Sheikh Abdulla bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank, 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.”
Hussain Alfardan, Commercial Bank’s Vice Chairman, added: “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 $500m 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,” he added.
Net interest income for the Group increased by 19.8 percent to QR2,323.6m (normalised 19.2 percent to QR2,311.6m) for the nine months ended September 30, 2020 compared to QR1,938.9m achieved in the same period in 2019. Net interest margin increased to 2.4 percent for the nine months ended September 30, 2020 compared to 2.3 percent achieved in the same period in 2019. Although asset yields have reduced, the increase in margins is mainly due to proactive management of the cost of funding both in Qatar as well as Turkey.
The Group balance sheet has decreased by 1.7 percent as at September 30, 2020 with total assets at QR143.1bn, compared to QR145.6bn in September 2019. The decrease was mainly due to investment securities and due from banks.
The Group’s loans and advances to customers increased by 1.5 percent to QR90.5bn at September 30, 2020 compared with QR89.1bn in the same period in 2019. The increase was mainly in the commercial and services sectors.
All the 3 rating agencies have affirmed Commercial Bank’s ratings and the outlook remains at Stable.
Joseph Abraham, Commercial Bank’s Group Chief Executive Officer, 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 percent 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. Group net interest income for the first nine months of 2020 increased 19.8 percent to QR2.3bn (normalised 19.2 percent) 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.
"Gross loan provisioning for the period increased 13.5 percent compared to the previous year, reflecting our prudent approach of factoring in the COVID-19 impact on our ECL models. Group loans and advances were QR90.5bn at the end of the first nine months of 2020, up 1.5 percent 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 percent 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 percent depreciation of the Turkish lira. Despite these challenges, Alternatif Bank reported a profit of QR53.6m during the period," he added.
