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CBQ net profit plunges 35pc in Q3

DOHA, October 18, 2015

Commercial Bank of Qatar (CBQ), the Gulf state's second-largest lender by assets, reported a 35 per cent fall in third-quarter net profit on Sunday, blaming the weaker performance of its unit in the UAE.

It is the third Qatari bank to report results so far this earnings season and the first to miss analyst expectations.

In contrast, Qatar National Bank and Qatar Islamic Bank have already delivered estimate-beating results.

CBQ made a net profit of QR316 million ($86.8 million) in the three months to September 30 versus QR486.5 million in the same period of last year, according to Reuters calculations based on the bank's previous financial filings. It did not provide a quarterly breakdown in its latest earnings statement.

Five analysts polled by Reuters had forecast on average CBQ's quarterly profit would be QR495.4 million.

The bank made a net profit of QR1.34 billion in the first nine months of 2015, down by 13.7 per cent from a year earlier, the filing said.

"Commercial Bank's UAE associate partner United Arab Bank has experienced difficult market conditions resulting in prudent provisioning during the period, which has affected our net profit," said Hussain Alfardan, CBQ's vice chairman and managing director.

United Arab Bank, in which CBQ holds a 40 per cent stake, last week reported an 85 per cent drop in net profit for the first nine months, compared with the same period of last year, blaming a large jump in provisioning.

The results suggested that some smaller banks in the Gulf region could be feeling the strain of tighter liquidity and declining asset quality as a result of low oil prices.

Still, CBQ's units in Oman and Turkey performed better. National Bank of Oman reported a 6.6 percent rise in third-quarter net profit to QR14.93 million ($38.78 million), according to Reuters' calculations. Over the nine-month period, Alternatifbank delivered an 18.4 per cent rise in nine-month net profit to 116 million lira ($40.13 million).

Credit growth in Qatar has been one of the main drivers of expansion for banks in recent years as the government spends ahead of hosting the soccer World Cup in 2022.

But CBQ's rate of loan expansion slowed to 3.8 percent year on year, with total lending standing at 73.4 billion riyals at September 30. It had been 4.6 per cent at the end of the second quarter of 2015.

Deposits climbed by 10.3 per cent year on year to QR64.1 billion at September 30, but were flat to the end of June this year.-Reuters




Tags: profit | Bank | CBQ |

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