DOHA: The Commercial Bank reported a net profit of QR491m for the nine months ended September, a 63 percent decrease as compared to QR1.34bn recorded for the same period in 2015.
The bank’s total assets are up 4 percent to QR123.9bn and customer loans and advances rose by 4 percent to QR76bn. The results reflect the performance of Commercial Bank’s subsidiaries and associates for the nine months period.
Sheikh Abdullah bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank, said, “Commercial Bank has proudly served the financial needs of its customers for over 40 years by always looking forward to the future. I, together with my fellow Board members, am resolved to maintain the development of Commercial Bank. Through our new executive leadership, and under the guidance of the Board, we are taking necessary decisions now to reshape a strong Commercial Bank for the future. Commercial Bank continues to have great potential to generate long term value for our customers and investors. Our decisions now will ensure that we unlock the Bank’s full potential.”
Hussain Al Fardan, Commercial Bank’s Vice Chairman and Managing Director, added, “Commercial Bank reported an operating profit of QR1.4bn for the nine months ended September 30.
During this period, we aligned our local market strategies to the current challenging realities, pursuing only those opportunities which meet our returns criteria. Our discipline will be maintained as we continue to serve our customers.”
The Bank’s net provisions for loans and advances were QR1.1bn, up 104 percent from a year ago. The non-performing loan (NPL) ratio has increased to 5.3 percent at September 30 2016 compared with 3.6 percent from a year ago. Impairment provisions on the Bank’s investment portfolio increased to QR68m from QR25m.
Joseph Abraham, Commercial Bank’s Chief Executive Officer, commented, “Since joining Commercial Bank in July, we are completing a review of the Bank’s strategy, performance and future direction and we will update the market with the results of our review later this year. However, one clear action became evident early in the process, which was the need for us to recognise a number of non-performing loans. The decision we have taken to provide for an additional QR505m of loans in the third quarter has consequently impacted our financials. Both the Board and the Bank’s leadership team view this as the necessary first step in aligning the business for the current and future economic environment and ensuring Commercial Bank builds sustainable earnings and is well positioned for the future.”
He added, “During the period, we continued to manage the business conservatively, reflecting both the challenges and opportunities of the current market. Qatar generated a solid financial performance excluding provisioning with QR431 million operating profit for the third quarter. Our Turkish subsidiary, ABank, has been aligned more closely in its working with Commercial Bank and with the injection of new equity and a Tier 2 issuance raised in the first half of the year, we had the funds to pursue loans in the corporate mid-market. However loan growth was limited as we remained highly selective of opportunities. Most importantly, we brought operational costs down by 5 percent at ABank during the period. UAB continues to successfully recover as its management team execute upon the realignment of the business to the UAE’s corporate market, whilst NBO in Oman has performed well.”
Commercial Bank’s subsidiary in Turkey Alternatifbank (“ABank”) delivered a net loss of TL 26.8m for the nine months. National Bank of Oman and United Arab Bank have achieved a profit of QR159m.
