The net profit earned by the bank in the fourth quarter of 2012 was QR447mn, up 19% on QR376mn registered in Q4, 2011.
Commercialbank announced its 2012 results after a meeting of its Board of Directors here yesterday.
The Board of Directors has recommended to the bank’s Annual General Assembly the approval of a cash dividend of 74% of net profit, which equates to QR6 per share.
The bank’s total assets increased by 12% to QR80bn in December 2012 compared with QR71.6bn in 2011.
The increase in total assets, the bank said, was due to growth of QR6.9bn in lending to customers and QR0.9bn in balances held with the Qatar Central Bank, partially offset by a reduction of QR0.6bn in investments.
The financial results indicate Commercialbank’s customer deposits totalled QR41.4bn in December 2012, an increase of 9% compared with the same period in 2011.
Loans and advances to customers were up 17% to QR48.6bn in December 2012 compared with QR41.7bn in December 2011.
The growth in lending in 2012 has been generated in both the corporate and retail businesses, Commercialbank said.
Financial investments got reduced to QR11.2bn in December 2012, 5% lower than the same period in 2011. The decrease since 2011-end reflects, mainly, the maturity and sales of Government Bonds and Qatar Central Bank Certificates of Deposits offset by investment in Qatar Central Bank Treasury Bills.
Commercialbank’s net interest income was QR1.87bn in December 2012, 4% lower than in 2011, reflecting growth in lending to customers offset by a reduction in the net interest margin to 2.95% in 2012 from 3.46% in 2011.
The decline in net interest margin resulted from lower average yields on lending due to intensely competitive market pricing pressure and the full year impact of regulatory changes, which capped pricing for retail products in 2011, partially offset by a reduction in the average cost of funds; the net interest margin in the fourth quarter of 2012 was in line with the third quarter.
The bank’s non-interest income was up 21% to QR1.12bn for 2012 compared with QR926mn for the same period in 2011 due to higher gains from the bank’s investment portfolio and an increase in foreign exchange income, partially offset by lower levels of net fee and commission income.
The bank’s total operating expenses were up 17% and reached QR1.028bn compared with QR875mn in 2011. Staff costs were 10% higher reflecting annual increments for staff and investment in staff training and development.
General and administrative expenses, and depreciation, were also up reflecting continued investment in the development of both the bank’s infrastructure and service delivery capability.
Commercialbank’s net provisions for loans and advances stood at QR140mn in December 2012, down 42% from QR239mn provided in the same period in 2011. The asset quality remains strong with the non-performing loan ratio reducing to 1.09% in December 2012 compared with 1.2% in December 2011.
The provisions for impairment on the bank’s investment portfolio got reduced to QR62mn in 2012 compared with QR68mn in 2011.
On Commercialbank’s 2012 financial performance, Chairman HE Abdullah bin Khalifa al-Attiyah said, “2012 has been another difficult year for the world economy with slower growth in emerging markets and established economies remaining subdued. Against this backdrop, the Qatar economy has continued to grow.
The credit demand has been dominated by the public sector with continuing low levels of demand from the private sector.
“However, Commercialbank has successfully grown its lending and diversified revenue streams to deliver a record profit for the full year. Qatar economy is expected to be driven by the Government’s spending programme in 2013 and Commercialbank is well positioned to support the future economic growth of Qatar and to deliver ongoing value to its shareholders.”
Commercialbank Managing Director Hussain Alfardan said, “Commercialbank has successfully achieved strong earnings in a challenging operating environment.
The bank has protected its core business in 2012 while delivering alternative sources of income. Our asset quality remains strong and we remain both well capitalised and funded to target growth sectors of the economy in the year ahead.”
Source: Caye Global News, Gulf Times
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