Commercialbank posts QR818m H1 profit Wednesday, 28 July 2010 03:11

DOHA: Commercialbank, Qatar’s largest private sector bank, posted a net profit of QR 818m in the first half of this year ended June 30.  Abdullah bin Khalifa Al Attiyah, Chairman of the Board of Directors of Commercialbank said, “Despite the continued slow and uncertain pace of recovery in global markets, the Qatar economy has grown in 2010 and is set to continue to grow steadily in the year ahead led by government spending.”

The bank’s net operating income was QR1.243bn for the six months ended June 30, 2010 compared to QR1.496bn in the first half of 2009 which included an exceptional gain of QR165m arising from the sale of a real estate asset and dividend income of QR56m from the local equities which were sold to the Government of Qatar.

Net interest income was up 2 percent to QR801m in the first half of 2010 compared to QR 787m in 2009 and also up by 6 percent to QR412m in the second quarter of 2010 against QR389m in the first quarter. The Bank’s tight balance sheet management continued to deliver a strong net interest margin which was 3.7 percent in the first half of 2010 compared with 3.2 percent for the same period in 2009. The increase in net interest income was, however, offset by lower fee and commission income, dividend income and other income.

“Commercialbank’s financial performance in the first half of the year reflects the bank’s solid business foundation which was developed through our revised risk based strategy in 2009,” said Hussain Al Fardan, Commercialbank’s Managing Director.

“We have made progress in developing our domestic corporate and retail businesses and we are optimistic that we will maintain current performance levels in the second half of the year.”

The bank’s net provision for loans and advances reduced to QR61m in 2010 from QR202m in the first half of 2009 and comprised QR28m against the retail lending book, QR20m for corporate banking and QR13m for Islamic banking; the Bank now classifies its non-performing loans on a 90 day past due basis compared with 180 days in prior periods.

Andrew Stevens, Commercialbank’s Group Chief Executive Officer, said, “This is a solid performance reflective of the re-alignment of the business undertaken towards the end of last year and the gradual improvement in the strength of the Qatar economy in 2010. We have managed the bank prudently, ensuring that we maintain good asset quality, continuing strong balance sheet management and securing a low cost base for both funding and expenditure.”

“We are seeing some opportunities in the market, particularly in the Public Sector, which are helping to deliver some positive trends in the business such as the 4 percent growth in loans and advances and the increase of 16 percent in customers’ deposits since the end of December last year.”

Meanwhile, Commercialbank’s associates National Bank of Oman (NBO) and United Arab Bank (UAB) contributed QR 68m in the first half of the year which represents 8 percent of Commercialbank’s net profit for the first half of this year compared with QR75m for the same period in 2009.

The associates’ contribution in 2010 has been reduced by a late adjustment in NBO’s 2009 financial results for an increase in provisions of RO5m following a recommendation from the Central Bank of Oman. The impact for Commercialbank was a QR17m reduction in net profit in the first half of 2010.

THE PENINSULA

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