The Commercial Bank yesterday announced net profit of QR683m for the year ended December 31, 2016 compared to QR1.28bn in the same period in 2015, registering a fall of 46.6 percent.
The Board of Directors has recommended, for approval at the Annual General Assembly on April 4, a bonus share payout of 5 percent (issue of one bonus share for every twenty shares held).
“The year 2016 was marked by challenging economic conditions and volatile markets exacerbated by international political uncertainty. To address these conditions, we have created a clear five year strategic plan which focuses on building sustainable growth. Under the new executive leadership, the Board is confident in Commercial Bank’s ability to return to growth as this plan is implemented,” said Sheikh Abdullah bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank.
Hussain Al Fardan, Commercial Bank’s Vice Chairman and Managing Director, added, “Commercial Bank reported an operating profit of QR1.94bn for the full year 2016. However, provisions and impairments of QR1.39bn were taken as part of our Strategic Plan to prudently provision and de-risk our balance sheet which has resulted in a net profit of QR501m".
"Despite the impact of provisions, our underlying business remains robust and the recently developed five year strategic plan will reshape our business towards sustainable growth,” he added. The Group reported a net profit of QR501.4m as compared to QR1.43bn for the same period in 2015, a decrease of 65 percent.
Net operating income for the Group decreased by 9 percent to QR3.59bn for the year ended December 31, 2016, down from QR3.95bn achieved in the same period in 2015. The Bank’s net operating income decreased by 4.9 percent to QR3.06bn compared to the same period in 2015.
Adjusting for a one off gain from sale of property in 2015 the Group’s net operating income would be lower by 6.9 percent and the Bank’s 2.1 percent compared to the same period in 2015.
Net interest income for the Group decreased by 7.6 percent to QR2.34bn for the full year ended December 31, 2016 compared to the same period in 2015, mainly due to an increase in the cost of deposits and a change in the business mix in ABank resulting in lower income.
Net interest margin decreased to 2.2 percent as compared to 2.5 percent in the same period in 2015. The Bank’s net interest income was lower marginally by 1.8 percent to QR1.99bn compared to the same period in 2015.
Non-interest income for the Group decreased by 11.4 percent to QR1.25bn for the full year ended December 31, 2016 compared with QR1.41bn.
The overall decrease in non-interest income was due to lower net fee and commission income, partly offset by higher foreign exchange income and investment income. The Bank’s non- interest income decreased by 10.1 percent to QR1.06bn compared to the same period in 2015.
Non – interest income in 2015 included a one off gain on sale of a property, adjusting for this non-interest income for the Group would be lower by 5.4 percent and for the Bank by 2.7 percent, compared to the same period in 2015. Total operating expenses for Group decreased by 2.3 percent at QR1.65bn for the year 2016 compared with QR1.69bn for the same period in 2015. The Bank’s total operating expenses increased by 2 percent at QR1.25bn.
The Group’s net provisions for loans and advances increased by 50.6 percent to QR1.27bn for the year 2016, from QR842m for the same period in 2015.
