Commercial Bank Group posted a net profit of QR501.4mn in 2016, Qatar’s premier bank said yesterday. In 2015, the group had registered a net profit of QR1.4bn. The group delivered balance sheet growth of 5.6% in end-December 2016 with total assets at QR130.4bn compared with QR123.4bn in December 2015.
Total asset growth was driven mainly by an increase of QR3.5bn in due from banks, QR1.2bn from loans and advances to customers and QR1.3bn on revaluation of property and equipment.
Commercial Bank chairman Sheikh Abdullah bin Ali bin Jabor al-Thani said, “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.”
Commercial Bank vice chairman and managing director Hussain Alfardan said, “Commercial Bank reported an operating profit of QR1,942mn for the full year 2016. However, provisions and impairments of QR1,394mn 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 QR501mn. 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.”
Net operating income for the group decreased by 9% to QR3.6bn in 2016 compared with QR3.9bn in 2015.
The group’s net provisions for loans and advances jumped by 50.6% to QR1.26bn in 2016, from QR842mn for the same period in 2015 as it de-risked assets.
The non-performing loan (NPL) ratio increased to 5% in December 2016 compared with 4.2% at the end of December 2015, but the coverage ratio increased to 78.9% as on December 31 last year compared to 71.2% as on December 31, 2015.
The group’s loans and advances to customers increased by 1.6% to QR77.8bn in December 2016 compared with QR76.6bn in the same period in 2015. The growth in lending has been generated, mainly in the industry, commercial and services sectors.
Customer deposits increased by 1.6% to QR70.9bn as on December 31, 2016, compared with QR69.8bn in the same period in 2015. The increase was primarily in ABank time deposits. The bank’s customers’ deposit remained stable at QR62.8bn.
Commercial Bank CEO Joseph Abraham said, “On joining the bank in July 2016, I was impressed with its strong brand and client franchise; since then we have developed, received the board approval and begun the implementation of the bank’s five-year strategic plan. We have embarked on a transformation journey and have already started translating the strategic plan into tangible actions that will reshape our business, build sustainable earnings and achieve growth.
“As part of this plan, we have raised capital and initiated a process of prudent provisioning and de-risking of our loan portfolio through diversification by sector, geography and tenor whilst building momentum in our business earnings and driving increased productivity and efficiency. Across the five-year plan, we will maintain a focus on building asset quality, diversification, client experience and digital innovation as key market differentiators for Commercial Bank.”
Commercial Bank has a subsidiary in Turkey, ABank and associate banks in the UAE and Oman: United Arab Bank (UAB) and National Bank of Oman (NBO).
Board of directors proposes
5% bonus share payout
Commercial Bank’s board of directors has recommended for approval at the Annual General Assembly on April 4, a bonus share payout of 5%, which translates into issuance of one bonus share for every 20 held. The financial results and bonus distribution are subject to the approval of the Qatar Central Bank, the bank said.
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