(MENAFN- The Peninsula) The Commercial Bank of Qatar QSC delivered a net profit of QR1.9bn for 2014, a 20.9 percent increase in profitability compared to 2013. On a quarterly basis, Commercial Bank generated a net profit of QR387m in the fourth quarter of 2014, an increase of 29 percent compared to fourth quarter 2013.
The Board of Directors recommended a combination of a cash dividend payout of QR3.5 per share and the issue of one bonus share for every 10 shares held, for approval at the annual general assembly scheduled to be held on March 18. The financial results and profit distribution are subject to the approval of the Qatar Central Bank.
The net operating income is up 13.6 percent to QR3.9bn for 2014. Total assets increased by 2.3 percent to QR115.7bn. Customer loans and advances are up by 8.5 percent to QR72.5bn and earnings per share reached QR5.93. Customers' deposits reduced by 2.9 percent to QR61.6bn as on December 31, 2014, compared with QR63.4bn as on December 31, 2013.
Sheikh Abdullah bin Ali bin Jabor Al Thani, Chairman, Commercial Bank, said: "2014 marks the fortieth year since the incorporation of Commercial Bank as Qatar's first private commercial bank. In that time, the bank has grown to become the leading private commercial bank in Qatar, helping to build the nation in a period which has seen a huge transformation of Qatar's economy and society...."
Hussain Al Fardan, Commercial Bank's Vice Chairman and Managing Director, said, "Solid annual performances from Commercial Bank, our alliance banks, UAB and NBO, combined with a strong performance from our Turkish subsidiary, ABank, has meant that Commercial Bank delivered net income of QR1.94bn, a 20.9 percent improvement compared to 2013."
The net interest income was QR2.5bn for 2014, 17.9 percent higher than in 2013, reflecting a strong growth in lending activities and the full year contribution and consolidation of ABank. ABank contributed QR638m, 24.7 percent of the total net interest income. Net interest margin decreased marginally to 2.72 percent as compared to the third quarter of 2014 at 2.77 percent. Non-interest income was up 6.1 percent to QR1.3bn for the year ended December 31, 2014 compared with QR1.2bn in 2013 with ABank contributing QR211m. The overall increase in non-interest income was due to higher net fee and commission income and was partially offset by lower income from investments securities and foreign exchange.
The net provisions for loans and advances were QR623m for 2014, up 3 percent from QR604m provided in 2013. The non-performing loan ratio has increased to 3.79 percent as on December 31, 2014 compared with 3.71 percent at the end of September 2014 and the coverage ratio has increased to 74.3 percent as on December 2014 compared to 68.3 percent in September 2014.
Impairment provisions on the investment portfolio reduced to QR50m for 2014 compared with QR110m in 2013.
The growth in lending since December 2013 has been generated, mainly, in the government, contracting, services, commercial and retail sectors. Loans and advances to customers of QR13.1bn at ABank were included as on December 31, 2014. Investment securities were down by 21 percent to QR11.6bn as on December 31, 2014 compared with QR14.7bn at the end of December 2013. The reduction in investment securities is mainly due to the maturity and sale of Government bonds. Investment securities of QR1.4bn at ABank were also included.
Abdullah Saleh Al Raisi, Commercial Bank's CEO, said, "Commercial Bank's full year financial performance demonstrates the value of the re-focusing of our strategy undertaken earlier in the year. Across our franchise, we are driven by a returns based approach to our markets."
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