REG - Commercial Bk Qatar - Annual Financial Report

Commercial Bank PSQCAnnouncement

25/02/2025 11:15

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RNS Number : 3977Y  Commercial Bank of Qatar (Q.S.C.)  25 February 2025

 

 

PRESS RELEASE

 

 

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

Financial Results

For The Year Ended

31 December 2024

 

 

 

The Commercial Bank (P.S.Q.C.) reports financial year 2024

Net Profit of QAR 3,032.1 million, up by 0.7%

 

Key Highlights

·    Net profit of QAR 3,032.1 million, up by 0.7%.

·    Total assets of QAR 165.8 billion, up by 0.9% from December 2023.

·    Loans and advances to customers remained stable at QAR 91.5 billion.

·    Customer deposits of QAR 77.0 billion, up by 0.6% from December 2023.

·    Strong capital adequacy ratio at 17.2% (post adjusting for proposed
dividends).

·    Total equity of QAR 26.5 billion, up by 8.5% from December 2023.

·    S&P affirmed Commercial Bank's rating at A-/Stable/A-2.

·    Received the prestigious "Best Green Financing Initiative" award and
"Sustainable and Green Bank of the Year in Qatar" award from the Asian Banker.

 

Doha, Qatar, 21 January 2025:

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
2024.

The Group reported a net profit of QAR 3,032.1 million, compared to the prior
year's reported net profit of QAR 3,010.2 million, representing a 0.7%
increase. The result underscores the consistent strides we continue to make in
our journey of growth and innovation.

The Board of Directors proposed a dividend distribution to shareholders of QAR
0.30 per share i.e. 30% 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.

 

Sheikh Abdulla bin Ali bin Jabor Al Thani, Chairman, said:

"In 2024, Commercial Bank had a positive year, making steady progress in
executing its strategic plan while further strengthening its financial
position. S&P affirmed the Bank's credit rating at A-/Stable/A-2,
reflecting its solid capitalization and the support provided by Qatari
authorities, recognizing the Bank's high systemic importance in Qatar. This
affirmation underscores the Bank's financial stability and its key role in the
national economy. We remain focused on maintaining this momentum, ensuring
continued financial stability, and delivering long-term value for our
stakeholders."

 

Mr. Hussain Ibrahim Alfardan, Vice Chairman, said,

"Commercial Bank achieved notable progress in 2024, driven by Qatar's robust
economic performance and our focus on sustainable growth. We maintained a
strong operational foundation, with disciplined cost management and consistent
growth across key segments.

Our commitment to sustainability took centre stage this year, marked by the
successful issuance of our inaugural Green Bond, raising CHF 225 million to
fund impactful green projects in Qatar. These efforts earned us the
prestigious "Best Green Financing Initiative" and "Sustainable and Green Bank
of the Year in Qatar" from the Asian Banker, reflecting our leadership in
advancing sustainable finance and environmental responsibility."

 

Mr. Joseph Abraham, Group Chief Executive Officer, commented:

"Commercial Bank delivered a strong and steady performance in 2024,
successfully aligning with our strategic objectives and achieving positive
financial outcomes. The Bank reported a consolidated net profit of QAR 3,032.1
million, reflecting a 0.7% year-on-year increase, driven by lower operating
cost, lower net provisions and improved performance from our associates.  Our
subsidiary in Turkey incurred a loss of QAR 85.2 million in 2024 after
hyperinflationary accounting which negatively impacted the 2024 results by
2.8%.

While higher market funding costs impacted net interest income, we achieved
notable growth in core fee income and other income, which rose by 12.5%. This
increase reflects the success of our strategic emphasis on diversifying
revenue streams through transaction banking, an expanding card portfolio, and
a robust performance in wealth management. These efforts underscore our
commitment to adapting to market dynamics while delivering value to our
clients.

We remain focused on optimizing our balance sheet, achieving a 0.9% increase
in total assets. Our proactive engagement in debt markets underscores strong
investor confidence in our financial stability and our commitment to
sustainable growth initiatives. With a robust capital position, including a
Common Equity Tier 1 ratio of 12.3% and a Capital Adequacy Ratio of 17.2%, we
continue to support growth while maintaining prudent capital levels in line
with our guidance.

As we continue our journey, we remain steadfast in our commitment to executing
our long-term strategy, with a focus on supporting Qatar's National Vision
2030. Our dedication to responsible banking and sustainable financing remains
at the core of our efforts, and we are reaffirming this commitment as we move
forward."

 

Key indicators of the financial results for the year ended 31 December 2024
were as follows:

Financial Highlights

 (QAR million)                              December     December     Change %

                                            2024         2023

 Total assets                                165,813.0    164,376.3   0.9%
 Loans and advances to customers             91,480.0     91,490.4    0.0%
 Customer deposits                           77,006.8     76,541.2    0.6%
 Total equity                                26,488.7     24,405.8    8.5%

 Net operating income                        4,556.0      5,489.5     -17.0%
 Operating expenses                         (1,273.2)    (1,440.8)    11.6%
 Operating profit                           3,282.8      4,048.6      -18.9%
 Net provisions                             (467.2)      (917.4)      49.1%
 Share of results of associates             329.7        294.2        12.1%
 Net monetary losses due to hyperinflation  (131.8)      (335.0)      60.7%
 Net profit                                 3,032.1      3,010.2      0.7%

 

 Key Performance Indicators          December  December

                                     2024      2023

 Cost to Income Ratio                27.9%     26.2%
 Cost of Risk - COR (bps) - gross    102       144
 Cost of Risk - COR (bps) - net      36        105
 Non-Performing Loan (NPL) Ratio     6.2%      5.9%
 Loan Coverage Ratio                 82.2%     105.1%
 Common Equity Tier 1 (CET 1) Ratio  12.3%     10.6%
 Capital Adequacy Ratio (CAR)        17.2%     14.9%

 

 

Balance sheet: Total Assets as at 31 December 2024 reached QAR 165.8 billion,
an increase of 0.9% from 31 December 2023. This is mainly driven by
improvement in investment securities, with the Bank investing in high-quality
market securities. The loans and advances to customers remained stable at QAR
91.5 billion, when compared to year end 2023.

 

Debt securities rose to QAR 10.7 billion as the Bank diversified its funding
sources. Furthermore, the generation of diversified customer deposits helped
to increase customer deposits by 0.6% to reach QAR 77.0 billion from QAR 76.5
billion at 31 December 2023.

 

 

Income statement: Net profit for the year ended 31 December 2024 reached QAR
3,032.1 million, an increase of 0.7% compared to 2023. The overall growth in
reported profitability was driven mainly by lower operating cost, lower net
provisions and improved performance from our associates. The Group's
cost-to-income ratio increased to 27.9% from 26.2%, due to lower operating
income from Turkey as well as Bank's continued investment in digital
innovation and service proposition. Overall, the results highlight the Group's
consistent financial performance and resilience, even amidst market
challenges.

 

Credit quality: As of 31 December 2024, the ratio of non-performing loans to
gross loans stood at 6.2%, compared to 5.9% as of 31 December 2023, primarily
due to lower gross loan balances as well as from the newly recognized NPLs. In
2024, the Group's net loan provisions decreased to QAR 330.4 million, down
from QAR 990.7 million in 2023, driven by higher recoveries and ECL releases.
As of 31 December 2024, Loan Coverage Ratio is 82.2%. This approach
underscores our ongoing focus on maintaining asset quality and reinforcing our
commitment to long-term financial sustainability.

 

Capital ratios: The Group's Common Equity Tier 1 (CET 1) Ratio as at 31
December 2024 reached 12.3%. The Capital Adequacy Ratio (CAR) as at 31
December 2024 stood at 17.2%, underlining strong capital accretion. These
ratios are higher than the regulatory minimum requirements of the Qatar
Central Bank and Basel III requirements.

 

Credit ratings highlight the Bank's robust resilience

 

On 20 November 2024, Standard & Poor's (S&P) Global Ratings has
affirmed Commercial Bank's issuer credit ratings at A-/A-2 with a stable
outlook.

Earlier in 2024, both Fitch and Moody's affirmed Commercial Bank's strong
credit ratings of "A" and "A2," respectively, with a stable outlook. Fitch's
rating reflects potential support from Qatari authorities, driven by a stable
operating environment and the Bank's robust franchise and improving
profitability. Similarly, Moody's stable outlook highlights the Bank's
resilience in capitalization, liquidity, and profitability, while recognizing
the potential for support from Qatari authorities in times of need.

These affirmations of Commercial Bank's top-tier ratings by S&P, Fitch,
and Moody's underscore strong confidence from institutional, corporate, and
retail clients in the Bank's financial performance and strategic outlook.
These ratings reflect the Bank's solid financial position, bolstered by its
resilience in capitalization, liquidity, and profitability, and its ability to
attract support from Qatari authorities if necessary. As a result, investors
and market participants are assured of the Bank's capacity for sustainable
growth and long-term success.

 

Diversified funding sources

 

Commercial Bank made significant strides in capital markets during the year.
In the first quarter, the Bank successfully priced a USD 750 million
Regulation S 5-year bond, which was oversubscribed 2.4 times and listed on
Euronext Dublin, marking its return to the public international capital
markets after a 3-year hiatus. In the second quarter, the Bank closed a USD
500 million 3-year Syndicated Term Loan Facility, which was also
oversubscribed 2.3 times, reflecting strong investor confidence. In the third
quarter, the Bank issued a CHF 225 million Green Bond for 3 years at a coupon
rate of 1.7075%, following strong demand from institutional investors.

 

The Bank continues to proactively seek diversified funding sources to support
its growth initiatives and enhance liquidity. It remains focused on securing
competitive, sustainable financing options that align with its long-term
strategy, further strengthening its financial position and capacity to meet
the evolving needs of its customers and stakeholders.

 

Sustainability and green financing for a resilient future

 

Commercial Bank is fully committed to the Qatar National Vision 2030 which
aims to transform Qatar into an advanced society capable of achieving
sustainable development by 2030 through four interconnected pillars:
environmental, economic, social, and human development.

In 2024 the Bank issued its debut Green Bond at a coupon rate of 1.7075% on
strong institutional demand. The CHF 225 million issue hit several milestones:
the largest CHF Green bond issuance in Qatar; the largest CHF issuance in
Qatar since January 2013, and the largest CHF Green bond issued in the CEEMEA
region since 2021.

The Bank expects to use proceeds to projects in Sustainable Water and
Wastewater Management, Green Buildings and Clean Transportation. These are
expected to contribute towards achieving the goals of Qatar National Vision
2030 and Qatar's National Environment and Climate Change Strategy.

In August 2024, MSCI upgraded the Bank's ESG rating from "BBB" to "A".
Finally, in the fourth quarter, The Asian Banker honoured Commercial Bank with
"Best Green Financing Initiative" award and the "Sustainable and Green Bank of
the Year in Qatar" award. These achievements recognize the Bank's commitment
to sustainability and responsible banking practices.

 

Driving value creation through strategic partnerships and recognition

 

With strong roots in Qatar, Commercial Bank has a significant presence in:
Turkey (through Alternatif Bank, a wholly-owned subsidiary); Oman (through its
strategic stake in National Bank of Oman); and the UAE (through its strategic
stake in United Arab Bank). With its consistent performance, supported by
regional strength and international reach, the Bank has been recognized by
Forbes as one of the top 30 Most Valuable Banks in the Middle East for 2024.
This recognition underscores the Group's continued commitment to effectively
serving its diverse customer base.

 

In 2024, the Group won several other prestigious awards including:

·    World Finance:  Best Digital Bank in the Middle East

·    World Finance: Best Bank in CSR in the Middle East

·    Major accolade at Mastercard East Arabia Business Forum held in
Singapore for its highest spend per account across the region on its
Mastercard Limited Edition World Elite portfolio for the second year in a row
by Mastercard

 

 

About Commercial Bank

Commercial Bank, incorporated in 1974 as the first private bank in the
country, celebrates its 50th anniversary this year. It stands as one of
Qatar's leading financial institutions, with a profitable track record since
its inception, and is the second-largest conventional bank in Qatar. Today,
the Bank continues to play a pivotal role in driving innovation and raising
banking service standards across the region through investment in new
technology, a strong customer focus, and prudent management.

For further information, visit: Investor Relations | Commercial Bank of Qatar
(cbq.qa) (https://www.cbq.qa/EN/IR/Pages/default.aspx)

For investor-related queries, please contact CB Investor Relations team on
ir@cbq.qa (mailto:ir@cbq.qa)

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