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Tribune News Network
Commercial Bank (CB) on Wednesday announced that the Group reported a net profit of QR1.301 billion in 2020 as compared to QR2.021 billion in 2019.
The board of directors has proposed a dividend distribution to shareholders of QR 0.1 per share that equals to 10 percent of the nominal
share value.
Operating profit of the Group increased by 0.7 percent (14.1 percent on normalised basis) to QR 3.14 billion for 2020, compared to QR3.118.6 billion in 2019.
Net interest income of the Group increased by 4.6 percent to QR3.1 billion (17.7 percent on normalised basis) in 2020 compared to QR2.963 billion in 2019. On a normalised basis, net interest margin increased to 2.4 percent in 2020 compared to 2.3 percent in 2019. Although asset yields have reduced, the increase in margins is mainly due to proactive management of the cost of funding.
Non-interest income of the Group decreased by 17.8 percent to QR1.137 billion in 2020 compared with QR1.383 billion in 2019.
Total operating expenses decreased by 10.7 percent to QR1.096 billion in 2020 compared to QR1.228 billion in 2019.
The Group’s net provisions for loans and advances increased 40.7 percent to QR836.4 million in 2020 from QR 594.4 million in 2019. The increase in provisions was mainly due to ECL model changes on account of COVID-19.
The non-performing loan (NPL) ratio decreased to 4.3 percent at the end of 2020 compared to 4.9 percent in 2019. The loan coverage ratio was at 101.6 percent in 2020. The underlying ECL provisions have increased due to the COVID-19 impact.
The Group balance sheet increased 4.1 percent in 2020 with total assets at QR153.6 billion, compared to QR147.5 billion in 2019. The increase was mainly due to loans and advances.
The Group’s loans and advances to customers increased by 9.9 percent to QR96.7 billion at the end of 2020 compared with QR88 billion in 2019. The increase was mainly in the commercial and government public sectors.
The Group’s investment securities decreased 4 percent to QR25.8 billion in 2020 compared to QR26.8 billion in 2019. The decrease is mainly due to maturities in government bonds.
The Group’s customer deposits decreased by 0.7 percent to QR75.8 billion in 2020, compared to QR76.3 billion in 2019. The decrease is mainly on time deposits. However, current and savings deposits have increased by 24.8 percent due to the various cash management initiatives and digital products that the bank offers.
Commenting on the results, Commercial Bank Chairman Sheikh Abdulla bin Ali bin Jabor Al Thani said, “Qatar has again demonstrated resilience with its successful management of the COVID-19 pandemic. Consequently, the International Monetary Fund (IMF) has predicted that Qatar’s GDP will grow 2.7 percent in 2021.
The IMF also noted that the country’s prudent budgetary decisions will keep its fiscal gap in check. During these challenging times, it has been a key priority for Commercial Bank to support the nation’s economy by postponing loan instalments and interest payments, providing corporates and SMEs in affected sectors with concessionary interest rates and participating in the National Response Guarantee programme. Commercial Bank remains committed to using its resources to bring world-class banking solutions and innovative products to Qatar in support of the private sector.”
Commercial Bank Vice Chairman Hussain Alfardan said, “Our investments in technology enabled us to seamlessly transition to working from home during movement restrictions whilst providing our customers with uninterrupted access to our services through enhanced digital services. Furthermore, focusing on prudent risk management allowed us to manage our risk profile during these unusual times as recognised by Fitch Ratings which affirmed our ‘A’ long-term issuer default rating with a stable outlook for the bank.”
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