Commercial Bank of Qatar Q4 net up 33 pc
Doha, January 24, 2010
Commercialbank, the largest private sector bank in Qatar, said its net profit for the fourth quarter of 2009 soared to QR1.52 billion ($417.4 million), up 33 per cent when compared to last year despite challenging market conditions.
Announcing the results for the year ended December 31, 2009, Abdullah Bin Khalifa Al Attiyah, chairman of Commercialbank board of directors, said the net operating income increased to QR2.77 billion.
"It was a very challenging year for global financial markets but Commercialbank has delivered a resilient set of full year results despite the effects of the financial downturn," he remarked.
The bank managed its balance sheet proactively throughout the year improving yields on certain asset classes and reducing the cost of funds by diversification of its funding sources.
"These actions led to an increase in net interest income of 30 per cent to QR1.58 billion for the year ended 31 December 2009 compared to 2008," he noted.
The increase in net interest income was largely offset by lower loan-related fee income which declined to QR555 million compared to QR774 million in 2008 reflecting a reduction in credit demand from the private sector and lower investment gains, down QR239 million, due to reduced asset valuations.
Net interest margin improved to 3.4 per cent in 2009, up from three per cent in 2008 reflecting the tight balance sheet management which has also enabled the bank to reduce the cost of borrowing to its corporate customers during the second half of the year as liquidity pressures eased.
The bank continued to manage its costs tightly during 2009 with general and administrative expenses declining by 2.2 per cent to QR667 million compared to QR682 million for the year ended December 31, 2008, Al Attiyah pointed out.
"Cost management will continue to be a strategic priority in 2010. Depreciation has increased by QR25 million to QR93 million in 2009 principally due to the expansion of the branch network and the establishment of the Bank’s new head office."
"The cost to income ratio increased slightly to 25.9 per cent compared to 25.2 per cent for 2008," he added.
Al Attiyah said the strength of its regional franchise has enabled Commercialbank to absorb the challenges of last year and also re-align the business so that it is better positioned to capture the potential value that recovering markets will offer.
Hussein Alfardan, Commercialbank’s managing director said, “Our results reflect the pragmatic and prudent approach we have taken in managing the business through the global financial downturn. The bank is committed to a clear strategy of controlled and sustainable growth, whilst remaining vigilant to the changing economic environment."
The strong market reception to Commercialbank’s $1.6 billion global bond offering is a testimony to the strength and resilience of our business and our strategy, Alfardan pointed out.
"Having successfully managed the challenges of the past year, we will continue to focus on actively managing risk, capital and liquidity and we are confident of the improving growth prospects of our regional banking alliance," he added.
Andrew Stevens, Commercialbank’s Group CEO, said the bank’s net provisions increased to QR648 million when compared to QR524 million in 2008.
"Despite the challenges, we have improved returns across the business, with an increase in our net operating profit to QR2.7 billion. We remain focused on building all of core businesses within the domestic market for the long term whilst continuing to consolidate and extract synergies from our regional alliance," Stevens said.
"Our strategy will see Commercialbank become an increasingly powerful regional banking presence as we build out a franchise based on customer focused service delivered from a lower cost base. We are well positioned to capture the growth opportunities in the coming year," he added.-TradeArabia News Service
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