QATAR Commercial bank eyes up to 40% of net income …from foreign businesses

Commercialbank will strongly support its developing businesses abroad and ensure they strongly contribute to its bottomline, said Group CEO Andy Stevens.

The Commercialbank Plaza at the West Bay. Qatar remains the principal market of Commercialbank. The bank is also looking to expand “equally good developing businesses” in the neighbouring markets to contribute to the bottomline, says Group CEO Andy Stevens.

“Many years ago, we said we want these investments to contribute strongly to our financial performance. And it is still our intention that we want between 30% and 40% of our net income derived from these investments by 2015. That will make these investments very worthwhile indeed.

“We have a clear vision about the business we want to build. I want to reiterate, Qatar is our principal market- jewel in our crown. The business we have here is the biggest and rightly so,” Stevens said.

“However, there are out there, in our neighbouring markets, equally good developing businesses. We will continue to support those businesses and ensure they strongly contribute to our bottomline,” Stevens said.

A successful diversification strategy has expanded Commercialbank’s GCC (Gulf Co-operation Council) footprint through strategic partnerships with associated banks, National Bank of Oman (NBO) in Oman and United Arab Bank (UAB) in the UAE.

Stevens said both NBO and UAB have posted phenomenal growth over the last few years.

UAB has had a three-fold growth since 2008, when Commercialbank picked up a stake in the UAE bank.

Within two months, UAB will move to a 26-storey iconic tower in Sharjah, which will be the bank’s head office. The bank is establishing a very strong profile in its headquarter city, Sharjah, and its future looks very positive, Stevens said.

He said NBO also came out with “great results” last year. The lender will also have a new headquarter building shortly. “We have got a lovely piece of land in Muscat for the NBO headquarter,” he said.

In the last few years, many GCC banks faced challenging times. The balance sheet growth may be there, but their profitability has been squeezed because of “intense competition and declining margins”.

“But both our affiliates- UAB and NBO -have outperformed their competition” Stevens said.

Asked whether Commercialbank looked at other markets, particularly emerging countries such as Malaysia, Stevens said, “We are not looking at Malaysia. Malaysia might be highly attractive for some, but that’s not on our radar screen. We are looking for quality business that adds immediate returns to our shareholders.”

Commercialbank remained focused on one key measure – earnings per share (EPS), he said.

“We are not necessarily looking to go back to our shareholders for more capital; they have given us a lot of capital. Our job now is to improve the returns on the existing shares we have got. For us, EPS is very important,” Stevens said.

“At Commercialbank, we are absolutely Qatar-focused and committed to our country. We are also increasingly GCC-centric now. Thirdly, we are Middle East and Turkey aligned. We have got a natural radius of business that we want to explore … stretching ourselves too quickly is not our intention.”

Currently, Turkey’s ABank has a network comprising some 75 branches. Though it is big by GCC standards, it is small for Turkey.

“Given the size of the country, you may question whether that size is sufficient,” Stevens said.

Qatar and Turkey, he said, have growing trading and investment links and growing political ties.

“Flights to Turkey from here are full … every single day. And when you look at the makeup, the passenger manifest, it is not just one group of people. They are a combination of business people and those who seek leisure and tourism and go for shopping. Many of them are Qataris.”

Stevens said Commercialbank would be “well placed” to assist people who regularly deal with Turkey and Qatar.

‘Local expansion to match Qatar growth, urbanisation’

Commercialbank’s physical expansion across Qatar will “match the growth and direction of urbanisation” in the country, Group CEO Andy Stevens said.

The bank will soon start another major project in Al Sadd – Commercialbank Boulevard – which will be an “exciting” mixed-use property development.

The bank will be the “anchor tenant” at Commercialbank Boulevard, where it will set up a “state-of-the-art mega branch”, Stevens said.

Commercialbank’s new Messila branch is set for formal opening. A new branch is also being built at Shamal. At the Pearl-Qatar, Commercialbank will open its fourth branch shortly.

“And we have exciting plans for Wakrah”, Stevens said. In view of Wakrah’s growing importance, because of its proximity to Doha and the Mesaieed Industrial City, chances are that Wakrah will become “a two or three branch town” for Commercialbank, he said.

Wakrah will also become home to Commercialbank’s new state-of-the-art training academy.

At Lusail, Commercialbank has already procured land. “But we have time to go before Lusail bursts into life,” Stevens said.

Qatar, the Commercialbank Group CEO said, would be the “key market” for the bank. “At the moment, the market is in anticipation… is waiting for the launch of the big projects,” Stevens said.

He said Commercialbank was looking forward to the onset of mega projects in the country.

“We genuinely want to see new business coming in. We also want to see the interest diverted away from the current margins to those that are associated with the new businesses, going forward,” Stevens added.

Source: Caye Global News, Gulf Times

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