CB net profit rises 47.3% to QR1,327 mn in 2021 H1

July 28, 2021

Commercial Bank (CB) on Tuesday announced that the Group reported a net profit of QR1,327.3 million in the first half of 2021, up by 47.3 percent as compared to QR901.2 million for the same period in 2020.
The bank registered a normalised operating income of QR2,283.9 million in the first half of 2021, up by 9.9 percent compared to the same period last year.
Total assets of the bank increased 12.8 percent to QR162.1 billion at the end of June 2021 compared to QR143.7 billion in June 2020, while the customer loans and advances increased 15.6 percent to reach QR100.6 billion in the first half of 2021 compared with QR87 billion in the same period of 2020.
The bank’s operating profit stood at QR1.705 billion, up by 11.6 percent compared to QR1.527 billion achieved in the same period in 2020.
The bank reported a strong capital adequacy ratio of 18.4 percent at the end of June 2021 compared to 17.3 percent in June 2020.
The bank saw net provisions of QR444.6 million in the first half of 2021, up by 50.2 percent, mainly on account of continued prudent provisioning. The NPL ratio was 4.1 percent compared to 5 percent, while the coverage ratio was 112.1 percent against 90 percent in the previous year.
In a statement issued on the occasion, Commercial Bank Chairman Sheikh Abdulla bin Ali bin Jabor Al Thani said, “Qatar’s economy is expected to enter a period of accelerated growth, supported by a robust policy response from the government to mitigate the economic impact of COVID 19, the expansion of LNG production capacity and the upcoming football World Cup.”
“At Commercial Bank we are committed to championing Qatar’s position as a place for innovative world-class banking solutions in the region. During the second quarter of 2021, we received the ‘Visa Global Service Quality Award 2020’ and the ‘Most Innovative Customer Service Bank for 2021’ from International Finance Magazine. Both these awards are the testimony to our continuous efforts to providing the latest, most innovative banking solutions to our customers,” Sheikh Abdulla said. Commercial Bank Vice Chairman Hussain Alfardan said, “We continue to see strong investor confidence in our business. The resilience of our business strategy and our continued focus on prudent risk management was recognised by Moody’s that re-affirmed our ‘A3’ rating for long-term deposits with a stable outlook for the long-term.”
Normalised net interest income for the Group increased by 14.1 percent to QR1.779 billion for the first year of 2021 compared to QR1.559 billion achieved in the same period in 2020.
On a normalised basis, the net interest margin increased to 2.6 percent in the first half of 2021 compared to 2.4 percent in the same period in 2020. Although asset yields have reduced, the increase in margins is mainly due to effective management of the cost of funding.
Normalised non-interest income for the Group decreased by 2.8 percent to QR505 million for the first half of 2021 compared with QR519.3 million achieved in the same period in 2020. The overall decrease in non-interest income was mainly due to lower FX and trading income in subsidiary Alternatif bank due to the challenging conditions in Turkey.
Normalised total operating expenses increased by 5.1 percent to QR578.9 million for the first half of 2021 compared with QR550.9 million in the same period in 2020 due to continued investment in technology for operational efficiency.
The Group’s net provisions for loans and advances increased by 84.4 percent to QR415.2 million for the first half of 2021, from QR225.2 million in the same period in 2020. The increase in provisions was mainly due to continued prudent provisioning.
The non-performing loan (NPL) ratio decreased to 4.1 percent on June 30, 2021 compared to 5 percent in June 2020. The loan coverage ratio was at 112.1 percent in June 2021 up from 90 percent in June 2020.
The Group’s investment securities decreased by 5.6 percent to QR25.3 billion on June 30, 2021 compared with QR26.8 billion in the same period in 2020. The decrease is mainly due to maturities in government bonds.
The Group’s customer deposits increased by 6 percent to QR82.3 billion on June 30, 2021, compared with QR77.7 billion in the same period in 2020. Low cost deposits have increased by 23.1 percent due to the various cash management initiatives and digital products that the bank offers.
Commenting on the results, Commercial Bank Group Chief Executive Officer Joseph Abraham said, “Commercial Bank continued to deliver positive results for the first six months of 2021 that reflected positive business momentum and also impairments of UAB in the comparative period last year which impacted results. The positive business growth was reflected in operating profit before provisions that increased by 11.6 percent to QR1.7 billion for the first half of 2021.”
“Profit before associates and taxes increased by 2.4 percent to QR1.3 billion during the period, contributing positively to our earnings for the first half of 2021. We continue to focus on improving the performance of our associates by driving operational efficiencies. Group’s net interest income increased by 13.3 percent to QR1.8 billion compared to the same period last year,” he said.
“The domestic bank reported a 15.3 percent increase in total fees and other income on a normalised basis, driven by a recovery in our investment income. On a normalised basis, the Group’s cost to income ratio improved to 25.3 percent in the first half of 2021 compared to 26.5 percent for the same period last year that enabled us to increase our income whilst maintaining a stable cost base,” Abraham said.
“Our associate banks NBO and UAB contributed positively to our earnings for the first half of 2021. We continue to focus on improving the performance of our associates by driving operational efficiencies,” he said.
“Alternatif Bank returned to profit during the second quarter of 2021 that reduced the first quarter’s loss of QR20.7 million that was caused by interest rate volatility to a lower loss of QR13.8 million for the first half of 2021,” he said.
Meanwhile, during the meeting held on Tuesday, the board of directors of Commercial Bank made a recommendation to the shareholders to hold an extraordinary general assembly, on a day and time to be announced at a later stage, to amend the Articles of Association of the Bank to increase the foreign ownership threshold to 100 percent, subject to the approval of the concerned authorities and the extraordinary general assembly.

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