(MENAFN- The Peninsula) By Mohammad Shoeb
DOHA: The Commercial Bank and its subsidiaries and associates reported a net profit of QR482m for the first six months of this year ended June 30, 2016 (H1, 2016), down 54 percent compared to QR1.05bn for the corresponding period in 2015.
The Bank posted a net profit of QR208m for the second quarter of 2016, a decrease of 65 percent compared to the second quarter of 2015, and a 24 percent decrease compared to the first quarter 2016.
Sheikh Abdullah bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank, said: 'Although world economic conditions remain challenging, the Qatari economy continues to deliver robust growth. The growth of the non-hydrocarbon sector continues to offset any impact of lower hydrocarbon prices. Qatar";s non-hydrocarbon economy is increasingly being driven by the services sector, offering Commercial Bank significant future opportunity. As we look to the future, we have strengthened our executive team with the appointment of Joseph Abraham, a highly experienced developed markets and emerging markets banker, to the role of CEO. We were delighted to promote Abdulla Saleh Al Raisi as Advisor to Commercial Bank";s Board. Both appointments will benefit the long term future of Commercial Bank.”
Commenting on the financial performance of the Bank, Hussain Al Fardan, Commercial Bank";s Vice Chairman and Managing Director, added: 'Commercial Bank reported an operating profit of QR1bn for the first six months of 2016. Market conditions are challenging, however, the continued diversification of the Qatari economy and the Government";s commitment to its public infrastructure projects provides the opportunity for growth.”
Net operating income of the Banking group decreased by 11.7 percent to QR1.83bn for the first half, down from QR2.07bn achieved in the same period previous year.
Net interest income was QR1.23bn for the half year, down 1.2 percent compared to the same period in 2015. Although asset yields in Qatar have improved, these have seen offset by reduction in ABank (Turkey-based Alternatifbank) resulting in a relatively flat NII. NIMs have remained steady at 2.34 percent as compared to the first quarter of 2016. Non-interest income was down 27.7 percent to QR595m for the H1, 2016 compared with QR822m. The decrease in non-interest income was due to lower net fee and commission income from ABank due to lower new loan generation.
Total operating expenses were up by 1 percent at QR831m compared to QR823m for the same period in 2015.
The Bank";s net provisions for loans and advances were QR603m for the half-year ended June 30, 2016 up 60 percent from QR376m for the same period in 2015. The NPL (non-performing loan) ratio has increased to 4.8 percent at June 30, 2016 compared to 4.5 percent at the end of March 2016 and the coverage ratio increased to 78.5 percent as at June 30, 2016 compared to 76.1 percent at the end of March 31, 2016.
Joseph Abraham, Commercial Bank";s CEO, said: 'Commercial Bank";s financial performance for the period has been impacted by a combination of factors across the various markets in which it operates.”
'Qatar generated a solid performance despite the challenges of the slower market conditions due to lower hydro carbon prices. We continue our efforts to increase our yields by selective re-pricing of assets and focus on increased cross sell across our business lines. We are also looking at our business strategy to reshape our book to be in line with market opportunities. Our Turkish subsidiary ABank and associate UAB continue to operate in challenging economic conditions and their results reflect these conditions - our efforts will be focused on bringing greater integration of risk and business plans in these markets to ensure that they are reflective of market opportunities and risks,” he added.
'2016 will be a challenging year for the financial services sector; however, we will be focused on taking actions to ensure that Commercial Bank is in a good position to generate future value for customers and shareholders.”
The Peninsula