The Banking Executive Magazine - April 2021

The Group’s loans and advances to customers increased by 12.0% to QAR 99.4 billion by 31 March 2021 compared with QAR 88.8 billion in the same period in 2020. The in- crease was mainly in the government & public and consumption sectors. The Group’s investment securities decreased by 2.9% to QAR 25.5 bil- lion by 31 March 2021 compared with QAR 26.2 billion in the same period in 2020. The decrease is mainly due to maturities in Govern- ment bonds. The Group’s customer deposits in- creased by 5.8% to QAR 81.8 billion by 31 March 2021, compared with QAR 77.4 billion in the same period in 2020. Low cost deposits have in- creased by 26.6% due to the various cash management initiatives and dig- ital products that the bank offers. S&P revised the Bank’s outlook to positive from stable and affirmed the 'BBB+/A-2' ratings. This indicates the possibility of an upgrade in the next 12 – 24 months. Moody’s and Fitch have affirmed the Bank’s ratings and the outlook remains stable. Mr. Joseph Abraham, Commercial Bank’s Group Chief Executive Offi- cer, commented: “Commercial Bank delivered a very positive set of results for the first quarter of 2021. The Group reported a consolidated net profit of QAR 602.7 million for the period up by 50.0% compared to the same period last year. The Group’s achievements, despite a challenging market environment, reflect the strong execution of our five-year strategic plan, which is now in its final year of implementation. “Group net interest income for the first quarter of 2021 increased by 5.9% to QAR 856.0 million com- pared to the same period last year. Adjusting for the impact of IFRS 2, net interest income increased by 7.4%. The improvement was driven by the effective management of our cost of funding to improve our net in- terest margin. “Total fees and other income in Q1 2021 reached QAR 230.5 million, an increase of 12.3% on a normalised basis compared to the same period last year, driven by a recovery in FX and trading income as well as invest- ment income following heightened volatility in global capital markets which adversely affected the com- parative period in Q1 2020 due to the COVID-19 pandemic. Conse- quently, operating income in Q1 2021 increased by 8.4% on a nor- malised basis to QAR 1.1 billion, compared to the same period last year. “Gross provisioning in Q1 2021 in- creased by 28.7% compared to the same period last year mainly on ac- count of higher provisions on NPL customers. This was partially offset by strong recoveries during the pe- riod, hence net loan provisioning in Q1 2021 increased by 12.9% to QAR 212.5 million, compared to the same period last year. “Group loans and advances were QAR 99.4 billion at the end of Q1 2021, up 12.0% compared to the same period in the previous year. Our customer deposits grew 5.8% at QAR 81.8 billion whilst our focus on low cost deposits continues to yield results, with consolidated low-cost deposits growing 26.6% during the period, contributing to the improve- ment in NIMs. “Alternatif Bank’s performance in the first quarter of 2021 was impacted by increased interest rate and currency volatility in the Turkish market. Alter- natif Bank reported a net loss of QAR 20.7 million during the quarter com- pared to a profit of QAR 24.6 million for the same period last year.We re- main positive on the outlook for Al- ternatif Bank for the full year, are committed to our business in Turkey, and see significant opportunities to create value in the long term. - “Our associate banks NBO and UAB contributed positively to our earnings in the first quarter of 2021 with UAB recording a profit for the first quarter compared to a loss the previous year. NBO in Oman continues to con- tribute positively to the overall in- come from associates. We continue to focus on improving the perform- ance of our associates by driving op- erational efficiencies.” the BANKING EXECUTIVE 16 ISSUE 148 APRIL 2021