Qatar: Commercial Bank reports net profit of $376mln in H1
With the bank board approving a plan to buy back up to 10% of fully paid-up issued shares, subject to regulatory approvals, and due to the pipeline of loan growth, it was decided not to distribute an interim dividend for H1-2025.
'In H1-2025, Commercial Bank has accelerated progress across the core pillars of our five-year strategy, delivering measurable impact in digital innovation, client experience, and operational efficiency. As we enter the final stretch of our 2022–26 plan, our focus remains on disciplined execution, delivering sustainable value, and deepening our alignment with Qatar National Vision 2030. We remain fully committed to supporting the country's economic ambitions while continuing to raise the bar in service excellence, innovation, and long-term shareholder returns,' said Sheikh Abdulla bin Ali bin Jabor al-Thani, chairman.
Omar Hussain Alfardan, vice-chairman and managing director, said Commercial Bank sustained strong momentum in H1-2025, with major credit rating agencies reaffirming their ratings, reflecting continued confidence in the bank's capital strength, liquidity, and profitability.
"In May, the board of directors approved a share buyback plan of up to 10% of the bank's fully paid-up issued shares, subject to the regulatory approval. This strategic initiative reflects our focus on enhancing shareholder value, capital efficiency, and superior returns on equity," he said, adding in June, it further diversified the funding base through a successful QR500mn senior unsecured bond issuance under its EMTN or euro medium term note programme.
Joseph Abraham, Group chief executive officer, said Commercial Bank delivered a strong performance in H1-2025, reflecting disciplined execution of its strategy and a continued focus on long-term value creation.
"The bank reported a consolidated net profit after tax of QR1.26bn, driven by strong growth in fee and other income, higher dividends from investments and improved contribution from associates," he said.
Total assets rose 13.2% year-on-year to QR182.1bn, mainly due to higher loans and advances to customers and an increase in investment securities.
The investment securities rose 26% to QR35.8bn, with the bank investing in high-quality market securities supporting the moves to lock in yields. The loans and advances to customers stood at QR103.8bn, up 12.7% due to higher corporate, government and public sector, retail borrowings and acceptances.
Debt securities rose to QR11.4bn as the bank diversified its funding sources. Furthermore, customer deposits stood at QR83.5bn as it focused on reducing high cost of funding, while growing low-cost deposits by 10.2%, which represents 42.1% of the total customer deposits mix.
The group's reported H1-2025 cost-to-income ratio increased to 30.6% due to lower operating income and higher cost increases coming from Turkey, as well as bank's continued investment in people, digital innovation and service proposition.
"Our strategic focus on diversifying income streams continues to yield results, with total fee and other income increasing year-on-year, supported by robust performance in transaction banking, growing cards portfolio, enhanced wealth management, and well managed investments portfolio. This helped offset pressure on net interest income to an extent, which was impacted from a downwards interest rate revisions," Abraham said.
"Our capital position remains robust, with a CET1 ratio of 12.5% and a capital adequacy ratio (CAR) of 17.2% as we continue to support growth while maintaining prudent capital levels in line with our guidance," according to him. These ratios are higher than the regulatory minimum requirements of the Qatar Central Bank and Basel III requirements.
On credit quality, the ratio of non-performing loans to gross loans was 5.5% against 5.9% a year-ago period. In H1-2025, the group's net loan provisions fell to QR244.1mn from QR293.7mn in H1-2024.
Net provisions were down 30.8%, supported by a combination of recoveries and reversals and strong performance was evident by associates whose contributions improved by 23.6%.
As of June 30, 2025, loan coverage ratio was 87.9%, which underscores the ongoing focus on maintaining asset quality and reinforcing its commitment to long-term financial sustainability.
The group is subject to the global minimum top-up tax under Pillar Two tax legislation. The top-up tax relates to domestic operations. The group has accrued for BEPS Pillar Two Taxes with effect from January 1, 2025; based on the applicable rules under Base Erosion and Profit Shifting (BEPS) Pillar Two Anti Global Base Erosion (GloBE) Rules.
The rules have multiple mechanisms that aim to ensure that qualified multinational enterprises maintain a minimum effective tax rate of 15% calculated based on the excess taxable profits in every jurisdiction in which the group operates. The incremental impact of these new taxes amounted to QR112.9mn for H1-2025.
© Gulf Times Newspaper 2022 Provided by SyndiGate Media Inc. (Syndigate.info).
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