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Rahul Preeth
Doha
Commercial Bank is likely to issue roughly 200 so-called Kangaroo bonds denominated in Australian dollar towards the end of this quarter or early next quarter, the chief executive of the group, Joseph Abraham, said on Tuesday.
The bank was “checking the appetite” in the market for the bond issue, Abraham said, adding that it formed part of diversifying the bank’s funding profile.
“We look at (diversification) by geography, tenor and type,” Abraham told media personnel at a roundtable held to discuss its 2018 financial results. The kangaroo bond issue is part of the bank’s geographic diversification process, he added.
The Commercial Bank Group has posted an impressive 175.5 percent jump in its net profit of QR1.6 billion for 2018, with its operating profit rising 5.9 percent to QR2.3 billion.
Abraham attributed the bank’s stellar performance to optimising expenses and lowering credit provisioning. As a result, its cost-to-income ratio came down to 33.4 percent from 37.5 percent. The bank aims to further reduce ratio by 2 percent to 31.5 percent this year through operational efficiencies.
When asked if the bank’s exposure to real estate sector was one of the factors for the provisions coming down, Abraham said: “Our exposure to the real estate sector was too large. We had around 32 percent of our loan book in the real estate sector.”
But the bank has reduced its exposure to the real estate sector since then and has more than doubled its economic exposure. Now, the bank is trying to strike a balance between the two sectors, he added.
“There is over-supply in the real estate sector,” Abraham said, describing the situation as “a case of indigestion”.
“We think this (oversupply) will get digested through the system,” he added.
The chief executive also credited the bank’s success in 2018 to the execution of its five-year strategic plan, which was first introduced in 2016. Under this plan, Commercial Bank’s vision aims to turn the lender into the “best bank in Qatar”.
“Our latest financial results are evidence of the successful execution of our five-year strategic plan and we will continue to deliver against our plan in 2019, with an increased focus on innovation,” Abraham added.
With the overall economic outlook in Qatar remaining stable by most standards, he said the bank expects its loan growth to be in line with the market — by around 4 to 5 percent in 2019.
Although tighter liquidity and higher funding costs might put margins under pressure, Abraham said the bank would manage through active loan re-pricing.
“We are actually growing our loan book,” said Commercial Bank CFO Rehan Khan. “There have been a lot of new businesses that we have begun in 2018. Our focus is primarily on government and public sector because we are under the Qatar average in that area.”
At the same time, Khan said, the bank was also working with the private sector such as the SMEs, retail and corporate customers.
Doha
Commercial Bank is likely to issue roughly 200 so-called Kangaroo bonds denominated in Australian dollar towards the end of this quarter or early next quarter, the chief executive of the group, Joseph Abraham, said on Tuesday.
The bank was “checking the appetite” in the market for the bond issue, Abraham said, adding that it formed part of diversifying the bank’s funding profile.
“We look at (diversification) by geography, tenor and type,” Abraham told media personnel at a roundtable held to discuss its 2018 financial results. The kangaroo bond issue is part of the bank’s geographic diversification process, he added.
The Commercial Bank Group has posted an impressive 175.5 percent jump in its net profit of QR1.6 billion for 2018, with its operating profit rising 5.9 percent to QR2.3 billion.
Abraham attributed the bank’s stellar performance to optimising expenses and lowering credit provisioning. As a result, its cost-to-income ratio came down to 33.4 percent from 37.5 percent. The bank aims to further reduce ratio by 2 percent to 31.5 percent this year through operational efficiencies.
When asked if the bank’s exposure to real estate sector was one of the factors for the provisions coming down, Abraham said: “Our exposure to the real estate sector was too large. We had around 32 percent of our loan book in the real estate sector.”
But the bank has reduced its exposure to the real estate sector since then and has more than doubled its economic exposure. Now, the bank is trying to strike a balance between the two sectors, he added.
“There is over-supply in the real estate sector,” Abraham said, describing the situation as “a case of indigestion”.
“We think this (oversupply) will get digested through the system,” he added.
The chief executive also credited the bank’s success in 2018 to the execution of its five-year strategic plan, which was first introduced in 2016. Under this plan, Commercial Bank’s vision aims to turn the lender into the “best bank in Qatar”.
“Our latest financial results are evidence of the successful execution of our five-year strategic plan and we will continue to deliver against our plan in 2019, with an increased focus on innovation,” Abraham added.
With the overall economic outlook in Qatar remaining stable by most standards, he said the bank expects its loan growth to be in line with the market — by around 4 to 5 percent in 2019.
Although tighter liquidity and higher funding costs might put margins under pressure, Abraham said the bank would manage through active loan re-pricing.
“We are actually growing our loan book,” said Commercial Bank CFO Rehan Khan. “There have been a lot of new businesses that we have begun in 2018. Our focus is primarily on government and public sector because we are under the Qatar average in that area.”
At the same time, Khan said, the bank was also working with the private sector such as the SMEs, retail and corporate customers.
