REG - Commercial Bk Qatar - Annual Financial Report

Commercial Bank PSQCAnnouncement

08/04/2024 09:45

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RNS Number : 5662H  Commercial Bank of Qatar (Q.S.C.)  08 April 2024

The Commercial Bank (P.S.Q.C.) Announces

Net Profit of QAR 3,010 Million for the year ended 31 December 2023

 

08 April 2024, Doha, Qatar: The Commercial Bank (P.S.Q.C.) ("the Bank"), its
subsidiaries and associates ("Group") announced today its financial results
for the year ended 31 December 2023. The Group reported a net profit of QAR
3,010.2 million as compared to QAR 2,811.1 million for the same period in
2022.

 

The Board of Directors proposed a dividend distribution to shareholders of QAR
0.25 per share i.e. 25% of the nominal share value.

 

The financials and proposed dividend distribution are subject to Qatar Central
Bank approval and endorsement by shareholders at the Bank's Annual General
Meeting.

 

Key financial highlights for the Group compared to the same period in 2022

·   Net profit of QAR 3,010.2 million, up by 7.1%.

·   Net operating income of QAR 5,489.5 million, up by 3.7%.

·   Net interest margin (NIM) is improved to 2.8%, up by 10 basis points.

·   Return on average assets (ROAA) has improved to 1.8% as compared to
1.7% in 2022.

·   Total assets of QAR 164.4 billion, down by 2.7%.

·   Customer loans and advances of QR 91.5 billion, down by 6.7% from
December 2022.

·   Customer deposits of QR 76.5 billion, down by 8.0% from December 2022.

·   "The Most Innovative Bank" award in the Middle East by World Finance.

·   "The Fastest Growing Brokerage House" award in Qatar by International
Finance.

 

 

Sheikh Abdulla bin Ali bin Jabor Al Thani, Chairman of the Board of Directors
of Commercial Bank, said, "The confirmation of Commercial Bank's 'A-' rating
with a positive outlook by Fitch, and 'A-' rating with a stable outlook by
S&P, reflects the proactive execution of our strategic plan and the
strength of Qatar's Government and economy.

In line with the Qatar National Vision 2030, Commercial Bank launched its
inaugural Sustainable Finance Framework, which will further our commitment to
support projects that enable the transition to a low carbon and climate
resilient economy, as well as a positive societal impact.

Our commitment to investing in technology and innovation has earned a number
of awards, including "Fastest-Growing Partner in Qatar" and the "Highest Spend
per Card in Qatar" at the Mastercard MENA Business Forum, highlighting our
influence in the Middle East's cards and payments industry."

 

Mr. Hussain Ibrahim Alfardan, Commercial Bank's Vice Chairman, said,

"We are pleased to report Commercial Bank's good performance for the fiscal
year of 2023. Substantial growth in crucial segments has played a vital role
in achieving strong financial results, highlighting our effectiveness in
meeting our customers' needs.

Looking ahead, our commitment remains strong as we work towards solidifying
Commercial Bank's position as a leading banking provider in the region. We
look forward to another year of achievements and contributing towards the
growth and prosperity of Qatar's economy."

 

Net interest income for the Group decreased by 2.4% to QAR 3,867.3 million for
the year ended 31 December 2023 compared with QAR 3,963.1 million achieved in
the same period in 2022. The decrease is mainly due to Alternatif Bank, where
the net interest income has decreased by 18.5%. Net interest margin improved
to 2.8% for the year ended 31 December 2023.

 

Non-interest income for the Group increased by 21.9% to QAR 1,622.2 million
for the year ended 31 December 2023 compared with QAR 1,330.9 million achieved
in the same period in 2022. The overall increase in non-interest income was
mainly due to the higher investment income.

 

Total operating expenses increased by 26.6% to QAR 1,440.8 million for the
year ended 31 December 2023 compared with QAR 1,138.1 million 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's net provisions for loans increased by 0.3% to QAR 990.7 million
for the year ended 31 December 2023, from QAR 987.6 million in the same period
in 2022. Despite strong recoveries, we have continued with prudent
provisioning on NPL customers. Non-performing loan (NPL) ratio stood at 5.9%
at 31 December 2023 from 5.3% at 30 September 2023 and 4.9% at 31 December
2022. The reason for increase in NPL is due to decrease in the loans and
advances exposure during the year.

 

The Group balance sheet has decreased by 2.7% as at 31 December 2023 with
total assets at

QAR 164.4 billion compared with QAR 168.9 billion in December 2022. The
decrease was mainly due to decrease in loans and advances to customers and due
from banks.

 

The Group's loans and advances to customers has decreased by 6.7% to QAR 91.5
billion at 31 December 2023 as compared to QAR 98.0 billion in December
2022.  The is due to Alternatif Bank, whose loans decreased due to the
Turkish lira depreciation. At domestic level, the decrease was partly due to
government repayments of temporary overdrafts.

 

The Group's investment securities increased by 3.1% to QAR 30.8 billion at 31
December 2023 compared with QAR 29.8 billion in the same period in 2022.

 

The Group's customer deposits decreased by 8.0% to QAR 76.5 billion at 31
December 2023, compared with QAR 83.2 billion in the same period in 2022.
The decrease is mainly in current and call deposits.

 

Mr. Joseph Abraham, Commercial Bank's Group Chief Executive Officer,
commented, "Throughout 2023, Commercial Bank maintained its strong performance
while successfully implementing our five-year strategic plan.

 

"In 2023, the Group achieved a consolidated net profit of QAR 3,010.2 million,
marking a 7.1% increase from the QAR 2,811.1 million reported in 2022. This
growth was largely driven by continuing increase in net operating income which
increased by QAR 195.5 million as compared to 2022.

 

"The Group's net interest income for the year 2023 saw a slight decrease of
2.4%, to reach QAR 3,867.3 million, down from QAR 3,963.1 million in 2022.
Although loan balance reduced by 6.7% year on year, the decrease in net
interest income was 2.4% as we managed to increase asset yield whilst continue
to manage interest cost.

 

"Overall fees and other income increased by 21.9% to QAR 1,622.2 million,
compared to QAR 1,330.9 million in 2022. This rise was mainly driven by higher
investment income.

 

"In 2023, the Group saw an increase in its cost-to-income ratio, reaching
26.2% from 21.5% in 2022. This rise was mainly due to elevated operating
expenses incurred at Alternatif Bank. The Domestic Bank's cost-to-income ratio
remained low at 22.2%.

 

"The gross cost of risk increased by 1 basis points (bps) to 144 bps as
compared to 143 bps, aligning with our 2023 guidance. However, the net cost of
risk decreased by 16 basis points to 105 basis points as compared to 121 basis
points in 2022, due to strong recoveries during the year.

 

"Investment securities increased by 3.1%, reaching QAR 30.8 billion, up from
QAR 29.8 billion in 2022.

 

"Customer deposits declined by 8.0% this year at QAR 76.5 billion, mirroring a
6.7% reduction in net loans and advances to customers, which decreased to QAR
91.5 billion from QAR 98.0 billion in 2022. This decline is largely due to the
effects of rising interest rates. In addition, low-cost deposits fell by
15.3%, reaching QAR 25.7 billion, compared to QAR 30.3 billion in the previous
year.

 

"Our associates continue to deliver good performance, with our profit from
share of associates growing by 32.3% in 2023, amounting to QAR 294.2 million,
up from QAR 222.3 million in 2022.

 

"The Group remains in adherence to the International Accounting Standards
(IAS) 29, which require the application of hyperinflationary accounting for
Alternatif Bank. As a result, a non-cash "net monetary loss" of QAR 335.0
million was recorded in the Group's income statement for the period as
compared to QAR 189.4 million in the corresponding period in 2022.

 

"The Domestic Bank's net profit showed a growth of 9.8%, rising to QAR 2,860.0
million from QAR 2,603.6 million in 2022. This increase is due to higher
investment income and higher recoveries during the year.

 

"During the year, Alternatif Bank witnessed a substantial upturn in net
profit, achieving QAR 83.6 million in contrast to QAR 31.5 million net profit
in the previous year. This improvement can be attributed to an improved FX and
trading income, which experienced an increase of 842.8% to QAR 417.5 million,
compared to QAR 44.3 million in the same period last year."

 

 

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