(MENAFN- Gulf Times) Commercial Bank has received shareholders' approval to raise capital worth QR3.6bn ($1bn), which will help the country's first private bank in its future growth. This will be a combination of additional Tier 1 and Tier 2 capital.
The shareholders at their extraordinary general meeting last night also approved the increase in bank's capital by 10% to QR3.26bn from QR2.96bn by issuing bonus shares to the shareholders on the basis of one new share for every 10 held. They have also authorised the bank's board of directors to dispose of fractional shares.
At the ordinary general assembly held prior to the extraordinary general meeting at the Commercial Bank Plaza, the shareholders have approved the issuance of "local and global certificates of deposits" amounting up to $2bn, which is a low-cost form of funding.
A Commercial Bank official said as the bank grew, there was a need for liquidity to have the proper asset€liability match.
The shareholders approved the board of directors' recommendation to distribute a cash dividend of 35% of the nominal share value, which translates into QR3.5 a share.
Commercial Bank chairman Sheikh Abdullah bin Ali bin Jabor al-Thani presided over the annual general meeting. Vice-chairman and managing director Hussain Alfardan and other directors were present.
In his report, which was read by Commercial Bank CEO Abdulla al-Raisi, Sheikh Abdullah said, "Our success and place in Qatar's history owe much to the vision of the founding members. Forty years ago, the Commercial Bank of Qatar was incorporated as Qatar's first private sector bank."
"Our commitment to innovation and to creating opportunities, as we have done for 40 years, has seen Commercial Bank deliver strong results in 2014," he said.
Commercial Bank posted a net profit of QR1.94bn in 2014, up 20.9% on the previous year. Total assets reached QR115.7bn in 2014, up 2.3% on 2013. Customer loans and advances scaled up 8.5% to QR72.5bn in 2014.
He said the board of directors gave clear direction to the executive team that the bank should "focus its strategy on a returns-based approach to our markets."
To ensure Commercial Bank retained its market position in Qatar, he said the bank "pursued growth against pre-determined returns criteria, and worked hard during the year to improve its share of profitable" government business.
Commercial Bank appointed a new management team in ABank, and worked closely with them, aligning the business to its overall return focused strategy. Also, the bank continued to enhance its partnerships with alliance partners: United Arab Bank (UAB) of the UAE and National Bank of Oman (NBO). To date, Commercial Bank's partnerships with UAB and NBO have "generated significant value" for its shareholders.
"As part of our strategy, we implemented financing initiatives to ensure Commercial Bank has the appropriate level of funding. We raised $1bn in a syndicated term loan facility in addition to the issuance of $750mn of five-year senior unsecured Notes under Commercial Bank's $5bn European Medium Term Note Programme," Sheikh Abdullah noted.
He said Commercial Bank was "committed to delivering the highest standards of service and value to both our customers and to our shareholders and in successfully delivering that ambition."
"We owe our thanks to the loyalty, dedication and hard work of all our employees who ensure that Commercial Bank creates opportunities every day. As we reflect on our performance over the past year, our achievements throughout the last forty years and look forward to future opportunities, we would like to offer our thanks to HE Abdullah bin Khalifa al-Attiyah, who has led the board of directors as chairman with dedication through a period of significant change and development," Sheikh Abdullah said.
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