DOHA: The Commercial Bank delivered a net profit of QR1.45bn for 2015, a 24.9 percent decrease in profitability compared to 2014. On a quarterly basis, Commercial Bank generated net profit of QR117m in the fourth quarter 2015, as compared to QR387m in the fourth quarter 2014.
The Board of Directors is recommending, for approval at the annual general assembly on March 16, a cash dividend payout of QR3 per share. The financial results and profit distribution are subject to the approval of the Qatar Central Bank.
The bank’s net operating income increased by1.2 percent to QR3.94bn for the year ended December 31, 2015, up from QR3.90bn achieved in 2014. ABank delivered net operating income of QR711.6m for the year representing 18 percent of the total net operating income.
Sheikh Abdullah bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank, said, “Despite concerns over the global economy, Qatar’s economy remains robust, backed by the country’s strong reserves and the government’s commitment to planned non hydro-carbon projects. The review of major government projects ahead of last year’s drop in the price of oil, means that Qatar is in a strong position to continue the diversification of its economy. This national strategy provides Commercial Bank with a wide range of opportunities to generate value for its customers and shareholders, whilst supporting the development of the economy, as it has done for the past 40 years.”
Hussain Al Fardan, Commercial Bank’s Vice-Chairman and Managing Director, added, “Commercial Bank reported a net profit of QR1.46bn for the full year 2015. Our financial results for the year were affected by slowing economic growth in our markets in addition to higher than average provisioning taken by our UAE associate. However, the fundamentals of our business remain strong and our strategy firm: to continue to build upon our 40 year heritage, further developing a financial institution designed to meet our customers’ changing needs.”
The bank’s net interest income was QR2.53bn, 1.8 percent lower than in 2014, as tightening liquidity and asset yields compressed margin. ABank contributed QR499.5m, 19.8 percent of the total. Net interest margin decreased to 2.48 percent as compared to the third quarter of 2015 at 2.51 percent. Net provisions for loans and advances were QR814m, up 30.7 percent from QR623m provided in 2014. The non-performing loan ratio has increased to 4.17 percent compared with 3.82 percnet at the end of December 2014 .
Impairment provisions on the Bank’s investment portfolio reduced to QR46.5m, compared with QR50m in 2014.
Commercial Bank delivered balance sheet growth of 6.7 percent at with total assets at QR123.4bn, compared to QR115.7bn at the end of December 2014. ABank contributed QR16.5bn of assets for the period. Balance sheet growth was driven mainly by an increase in lending to customers and financial investments.
Loans and advances to customers were up by 5.6 percent to QR76.6bn compared with QR72.5bn at the end of December2014. The growth in lending since December 2014 has been generated mainly in the Services, Real Estate and Retail sectors. Investment securities were up by 36.4 percent to QR15.8bn, up from QR11.6bn in 2014.
Abdulla Saleh Al Raisi, Commercial Bank’s CEO, said, “Our markets have proved challenging during the course of the year, as economic growth slowed amidst concern over the prospects of the global economy. 2016 will likely be a challenging year as the world adjusts to lower oil prices, increasing interest rates and slower rates of growth from China. However, Commercial Bank is well-positioned to generate value and we are optimistic about the long term prospects for the Bank.”
