The Peninsula — Doha
The Commercial Bank (P.S.Q.C.) (“the Bank”), its subsidiaries and associates (“Group”) announced yesterday its financial results for the half year ended June 30, 2023. The Group reported a net profit of QR1,554.3m as compared to QR1,432.3m for the same period in 2022.
Sheikh Abdulla bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank, said, “Despite a challenging environment in the global banking sector this year, Commercial Bank has achieved positive financial and operational performance in the first half of 2023. By consistently investing in technology and innovation, we have been able to deliver world-class services that enhance the customer experience, which was further validated by our recent accolade of the ‘Top Innovation in Mobile Banking Award in the World 2023’ from Global Finance. We remain committed to leverage this growth and success to create value for our stakeholders.”
Hussain Alfardan, Commercial Bank’s Vice Chairman, said, “We are pleased to announce the solid performance of Commercial Bank in the first half of 2023, which reflects our unwavering commitment to operational excellence. We continue to focus across key segments of the corporate and retail sectors and this has contributed to positive momentum in our results and demonstrates our success in meeting the needs of our customers. As we move ahead, we remain resolute in our goal to position Commercial Bank as a leading banking provider in the region. We anticipate another year of positive achievements, contributing to the continued growth and prosperity of Qatar’s economy.”
Operating profit for the Group increased by 6.9% to QR2,112.9m for the six months ended 30 June 2023 compared with QR1,975.7m achieved in the same period in 2022.
Net interest income for the Group increased by 2.4% to QR1,935.0m for the six months ended 30 June 2023 compared with QR1,890.3m achieved in the same period in 2022. Net interest margin maintained at 2.7% for the six months ended 30 June 2023.
Normalized non-interest income for the Group increased by 23.9% to QR819.8m (+28.8% on reported basis) for the six months ended 30 June 2023 compared with QR661.6m achieved in the same period in 2022. The overall increase in non-interest income was mainly due to recovery of investment income.
Normalized total operating expenses increased by 11.4% to QR642.0m (+18.5% on a reported basis) for the six months ended 30 June 2023 compared with QR576.2m in the same period in 2022 mainly due to inflation related expenses as well as one-off expenses in Turkey and Bank’s continued digital investments.
The Group balance sheet decreased by 8.8% as at 30 June 2023 with total assets at QR160.8bn, compared with QR176.4bn in June 2022. The decrease was mainly due to decrease in loans and advances.
The Group’s loans and advances to customers decreased by 11.7% to QR89.4bn at 30 June 2023 compared with QR101.2bn in the same period in 2022. The decrease was mainly due to decrease in acceptances by QR5.0bn in Qatar and a reduction in Alternatif Bank loans and advances by QR3.2bn due to the Turkish lira depreciation and focused loan underwriting.
The Group’s investment securities, stood at QR29.4bn at 30 June 2023, which is similar to QR29.4bn at 30 June 2022. The Group’s customer deposits decreased by 14.8% to QR76.1bn at 30 June 2023, compared with QR89.3bn in the same period in 2022. The decrease is mainly in time deposits.
Joseph Abraham, Commercial Bank’s Group Chief Executive Officer, commented, “Commercial Bank continued to deliver improved financial performance for the first half of 2023 as the Group recorded a consolidated net profit of QR1,554.3m, up by 8.5% compared to the QR1,432.3m achieved in the same period of 2022.
The increase was mainly attributed to growth in operating income, higher recoveries and improved performance from our associates.
“Normalized operating income grew by 8.0% supported by 2.4% increase in interest income and 23.9% growth in total fees and other income. The Group’s net interest income for the period increased by 2.4% to QR1,935.0m compared to QR1,890.3m in the same period in 2022 mainly on account of increase in interest rates.
“Normalized total fees and other income up by 23.9% to QR819.8m compared to QR 661.6m in the same period of 2022 mainly due to recovery in investment income.
“The Group’s normalized operating expenses was QR642.0m, up by 11.4%, mainly driven by inflation related and one-off expenses in Turkey and the Bank’s continued digital investments. Cost to income ratio at Group level reported at 23.3% in the first half of 2023, increased from 22.6% for the same period in 2022.
Consequently, Group’s operating profit improved to QR2,112.9, up by 6.9%.
“Net provisions increased to QR575.5m, up by 8.8% compared to QR528.9m over the same period last year. The Group’s coverage ratio strengthened to 111.9% as at 30 June 2023, compared to 103.2% in June 2022.
“Group loans and advances contracted by 11.7% to QR89.4bn mainly due to decrease in acceptances by QR5.0bn in Qatar and a reduction in Alternatif Bank loans and advances by QR3.2bn due to the Turkish lira depreciation and focused loan underwriting in a negative yield environment for loans.
“Our associates continue to demonstrate improved performance with net profit from associates of QR145.3m, 36.6% increase compared to QR106.4m during the same period in 2022.
“Alternatif Bank reported a net profit of QR88.2m for the first half of 2023 compared to a net profit of QR58.6m in the previous year. The results were impacted by the hyperinflation accounting amounted to QR116.6m in H1 2023 and QR93.4m in H1 2022.
