DOHA: Commercial Bank’s net profit increased by 7.3 percent to QR506m in the first quarter this year compared with QR471m achieved in Q1-2012. The bank’s total assets grew 22 percent to QR85.6bn. Customer loans and advances rose by 22 percent at QR51.4bn and customers’ deposits grew by 22 percent to QR46.2bn.
Abdullah bin Khalifa Al Attiyah, Chairman of the Board of Directors of Commercial Bank, said: “Qatar’s economy is expected to grow strongly in 2013 with an increasing contribution from the non-hydrocarbon sector. The recent budget demonstrates the government’s continuing strong commitment to infrastructure development as well as increasing investment on education and health. Commercial Bank has made a strong start to the year with growth continuing in both the Wholesale and Retail businesses; we will remain focused in 2013 on growing our core domestic businesses whilst developing our international alliance businesses in Oman and in the UAE, alongside our future new partnership in Turkey.”
Hussain Al Fardan, Commercial Bank’s Managing Director, said: “Commercial Bank has had a positive first quarter despite the continuing competitive operating environment. The bank has successfully targeted opportunities for growth in lending, maintained the delivery of alternative sources of income and expanded its deposit base. The bank is well positioned and well funded to target new opportunities during the remainder of the year.”
The bank’s net operating income increased by 11 percent to QR753m for the first quarter of 2013, up from QR680m achieved for the quarter ended March 31, 2012.
Net interest income was QR454m for the quarter ended March 31, 2013, five percent lower than in the same period in 2012, reflecting growth in lending to customers offset by the impact of a reduction in the net interest margin which declined to 2.64 percent for the first quarter of 2013 compared with 2.75 percent for the fourth quarter of 2012. The decline in the net interest margin resulted from a reduction in average yields on assets due to competitive market pricing pressure on lending and lower returns from other financial instruments, partially offset by a reduction in the average cost of funds.
Non-interest income was up 48 percent to QR299m for 2013 compared with QR202m for the same period in 2012 due to higher levels of loan-related and trade service fee income, improved gains from the Bank’s investment portfolio and an increase in foreign exchange income.
The bank’s total operating expenses were up by 15 percent to QR244m for the first quarter of 2013 compared with QR211m in 2012, but were down compared with the fourth quarter. Staff costs were 11 percent higher than the first quarter and in line with the fourth quarter of 2012. General and administrative expenses, and depreciation, were also up reflecting investment made in the bank’s infrastructure.
Andrew Stevens, Commercial Bank’s Group Chief Executive Officer, said: “Commercial Bank has delivered strong growth in lending and profitability in the first quarter of 2013. In line with our expectations, the Qatar market has seen limited growth in either the Public, or Private, Sector during the period with competitive pricing dynamics continuing to place pressure on margins. Despite this, the Bank has been successful in growing its lending and continues to diversify its income sources to offset pressure on core income.”
Commercial Bank’s associates increased their contribution to the bank’s net profit by 25 percent to QR67m in Q1-2013 compared with QR53m for the same period in 2012.
The Peninsula
