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The Commercial Bank (P.S.Q.C.) (“the Bank"), its subsidiaries and associates (“Group") announced today its financial results for the half year ended 30 June 2021. The Group reported a net profit of QAR 1,327.3 million as compared to QAR 901.2 million for the same period in 2020.
Key financial highlights for the Group compared to the same period in 2020
Mr. Joseph Abraham, Commercial Bank's Group Chief Executive Officer, commented: “Commercial Bank continued to deliver positive results for the six months ended 30 June 2021, reporting consolidated net profit of QAR 1.3 billion for the period up 47.3% compared to the same period last year which reflected positive business momentum and also impairments of UAB in the comparative period last year which impacted results. The positive business growth was reflected in operating profit before provisions which increased by 11.6% to QAR 1.7 billion for the first half of 2021.
“Profit before associates and taxes increased by 2.4% to QAR 1.3 billion during the period, contributing positively to our earnings for the first half of 2021. We continue to focus on improving the performance of our associates by driving operational efficiencies.
“Group net interest income increased by 13.3% to QAR 1.8 billion compared to the same period last year. The improvement was driven by asset growth and a strong focus on net interest margins which continued to improve from 2.4% to 2.6% particularly through effective management of our cost of funds.
“Normalized total fees and other income for the Group was QAR 505.0 million, a decrease of 2.8% compared to the same period last year primarily due to challenging market conditions in Turkey, impacting our subsidiary, Alternatif Bank.
“The domestic bank reported a 15.3% increase in total fees and other income on a normalised basis, driven by a recovery in our investment income.
“On a normalised basis, the Group's cost to income ratio improved to 25.3% in H1 2021 compared to 26.5% for the same period last year, which enabled us to increase our income whilst maintaining a stable cost base.
“Net provisioning increased by 50.2% to QAR 444.6 million, compared to the same period last year mainly on account of continued prudent provisioning which has further improved the NPL coverage ratio to 111.2% compared with 90.0% for the comparative period, despite lower recoveries in H1 2021 as compared to H1 2020.
“Business momentum was reflected in growth in loans and advances which were QAR 100.6 million at the end of H1 2021, up 15.6% compared to the same period in the previous year due to increased loan demand from new and existing customers. Our customer deposits grew 6.0% at QAR 82.3 billion whilst our focus on low cost deposits continued to yield results, with consolidated low-cost deposits increasing by 23.1% during the period, contributing to the improvement in NIMs.“Our associate banks NBO and UAB contributed positively to our earnings for the first half of 2021. We continue to focus on improving the performance of our associates by driving operational efficiencies."
“Alternatif Bank returned to profit during Q2 2021 which reduced the Q1 2021 loss of QAR 20.7 million which was caused by interest rate volatility to a lower loss of QAR 13.8 million for H1 2021.
Recommendation to Hold EGM to Increase the Foreign Ownership Threshold to 100%
The Board of Directors of the Bank decided, during the meeting held on July 27th 2021, in accordance with the laws and decisions applicable to foreign investment ownership in Qatar shareholding companies, to make a recommendation to the shareholders to hold an extraordinary general assembly, on a day and time to be announced at a later stage, in order to amend the Articles of Association of the Bank to increase the foreign ownership threshold to 100%, subject to the approval of the concerned authorities and the extraordinary general assembly.