(MENAFN- The Peninsula) The Peninsula
DOHA: The Commercial Bank, its subsidiaries and associates reported a net profit of QR405m for the first quarter of the year ended March 2018, a 345 percent jump as compared to QR91m posted for the same period in 2017.
The Group's total assets rose by 8.4 percent to QR146.3bn froma year ago. Customer loans and advances grew by 13.0 percent to QR92.7bn.
Sheikh Abdullah bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank, said the Qatari economy is resilient with GDP growth revised upwards to 2.8 percent for 2018, making it one of the fastest growing economies in the region. Confidence in Qatar's economy prevails, reflected by the strong appetite for Qatari bonds. The Bank had a strong start to 2018, with top line growth and operating profitability on the rise for the fifth sequential quarter, thanks in part to the bank's strong franchise and balance sheet, as well as prudent management of liquidity.
'Looking ahead to 2018 and beyond, the projected growth of the private sector will present several opportunities for the Bank to finance the expansion of business in the country, he said.
Hussain Al Fardan, Commercial Bank's Vice Chairman, added, 'Commercial Bank had an excellent start to the year and continued with the execution of its 5-year strategic plan. The bank reported its fifth sequential quarter of increased operating profitability with strong asset growth, a stable funding platform and increased efficiencies across the operating business. Net operating income for the Group increased by 3.8 percent to QR919m for the quarter, up from QR885m posted in the same period in 2017. Net interest income for the Group increased by 10.1 percent to QR659m,, driven mainly by strong loan growth. Net interest margin is 2.3 percent for the quarter, an increase of 0.1 percent from a year ago.
Non-interest income for the Group decreased by 9.4 percent to QR260m. The overall decrease in non-interest income was mainly due to lower income from investment securities as equity holdings were scaled down in line with the strategic plan and foreign exchange income.
Total operating expenses were tightly managed at a Group level, down 12.4 percent to QR 311m. Costs reductions were primarily driven by lower staff and administrative expenses.
The Group's net provisions for loans and advances decreased by 53.7 percent to QR222m. The non-performing loan (NPL) ratio increased to 5.3 percent in the quarter ended 31 March 2018 compared to 5.0 percent for the same period in 2017. The loan coverage ratio increased to 86.4 percent compared to 85.9 percent from a year ago. The Group's total asset growth was driven mainly by an increase in loans and advances and in investment securities. The investment securities increased by 17.7 percent to QR20.2bn on year-on-year. The increase is mainly in Government bonds. The Group's customer deposits increased by 10.3 percent to QR79.3bn for the quarter, compared with QR71.9bn for the same period last year.
Joseph Abraham, Commercial Bank's Group Chief Executive Officer, commented, 'I am pleased to report a strong business performance for the first quarter of the year, a clear indicator that we have the right strategy in place and the right team to implement it.
'The results of the strong execution of our 5 year strategic plan are seen in Q1 2018 results with a consolidated operating profit of QR608m and a net profit of QR405m, representing a 15 percent and a 345 percent increase over the same period last year, respectively. As we advised last year we have come to the end of the legacy loan book provisioning and the normalised credit charge has benefited our bottom line. More importantly we have continued to grow our business strongly with a focus on the government and public sector, introduced new and innovative products in retail banking as part of our digital agenda and continued our tight focus on efficiency driving down our cost income ratio whilst continuing to invest in our product and infrastructure, he said.
The first quarter also saw the successful rebranding of ABank to Alternatifbank, as part of a broader strategy to more closely align associates and subsidiaries with the group. The new management team in Alternatifbank also had positive impact with operating profit increasing to QR85min Q1 2018, up 38 percent compared with the same period last year, Joseph Abraham said.
'For our Associates, NBO reported a net profit of QR119m for the quarter, slightly impacted by challenging market conditions. For UAB, discussions are ongoing to negotiate terms of the potential sale of Commercial Bank's stake in the bank, he added.
MENAFN1904201800630000ID1096747112
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.