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Qatar Commercial Bank Second-Quarter Profit Advances 23%, Beats Estimates
Commercial Bank of Qatar reported a 23 percent increase in second-quarter profit, beating analysts’ estimates, as the country’s second-biggest lender by assets reduced funds it set aside to cover loan losses.
Net income rose to 408 million riyals ($112 million), the Doha-based bank said in an e-mailed statement, after a profit of 333 million riyals a year earlier. That exceeded the median estimate of seven analysts for a profit of 371 million riyals, according to data compiled by Bloomberg.
“We are satisfied that the business is delivering sustained levels of profitability,” Chief Executive Officer Andrew Stevens said in a phone interview today. “The improving trends we saw in the first two quarters give us confidence the performance will be maintained.”
As Qatari banks suffered from losses related to the global economic slowdown, the country’s government last year bolstered them by taking equity stakes and agreeing to buy the banks’ real-estate portfolios. Qatar National Bank SAQ, the country’s biggest lender by assets, posted a 36 percent rise in second- quarter profit, beating analysts’ forecasts.
Commercial Bank cut net provisions for loans and advances to 61 million riyals in the first half from 202 million riyals a year earlier and now classifies non-performing loans as 90 days past due rather than 180 days, according to the statement.
The reclassification was to comply with international practices and central bank requirements, Stevens said. The bank plans further provisions for loans in the second half of the year, he said.
‘Positive’ Figures
Loans and advances to customers rose to 33.3 billion riyals on June 30, up 4 percent from a year earlier, the bank said. Deposits increased 1.3 percent to 30.4 billion riyals.
“The balance sheet figures are very positive because deposit and lending growth was stronger than we expected,” Sofia El Boury, a banking analyst at Shuaa Capital PSC, said in a telephone interview. Shuaa Capital predicted net income of 363 million riyals, according to data compiled by Bloomberg.
Net operating income dropped to 1.24 billion riyals in the first half from 1.5 billion riyals a year earlier. Operating income in the first half of last year included a gain of 165 million riyals from the sale of real-estate assets and dividend of 56 million riyals from equities sold to the government, according to the statement.
Commercial Bank plans no bond issuances this year after raising $1.6 billion in a bond sale last year to repay a $380 million syndicated loan facility, Stevens said.
The bank issued 10.3 million new ordinary shares earlier this year to Qatar Holding, a unit of the country’s sovereign wealth fund, increasing the government’s stake in the bank to 9.1 percent, the lender said.
Commercial Bank shares rose 0.6 percent to close at 67.7 riyals before the results were announced. The stock has gained 9.6 percent this year, compared with a 6 percent increase in the Qatar Exchange Banking Sector Index.
To contact the reporter on this story: Robert Tuttle in Doha at rtuttle@bloomberg.net
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