Commercial Bank of Qatar (CBQ) posted a 62.9 percent slump in its second-quarter net attributable profit on Tuesday, missing analysts’ forecasts as rising impairments on bad loans and weaker results at its overseas subsidiaries weighed heavily.
The result contrasts with those of the three other large Qatari lenders, which all reported rising profits for the quarter, even as the local economy slows and challenges emerge in the domestic construction sector.
The Gulf Arab state’s third-largest lender by assets earned a net profit attributable to equity holders of 212.3 million riyals ($58.3 million) in the three months to June 30, it said in a statement.
That compares with a profit of 572.3 million riyals in the same period a year earlier, and the 339.5 million riyal average forecast of five analysts polled by Reuters.
CBQ was hit by a 66.9 percent rise in net impairment losses on loans and advances to 343.7 million riyals.
In addition the bank’s net interest income declined by 2.1 percent to 613.3 million riyals, while net fee and commission income slipped by 37.9 percent to 181.7 million riyals.
The bank said the latter was partly a result of lower new lending at Alternatifbank, the Turkish bank of which it currently owns 75 percent.
CBQ reported the results after market hours. It had earlier in the day said it would buy the remaining 25 percent of Alternatifbank after Turkish conglomerate Anadolu Industry Holding exercised an option which gave it a right to sell its stake to the Qatari lender.
That contributed to a 2.3 percent drop in CBQ’s share price, reflecting investors’ nervousness about the prospects for Turkey after the failed coup attempt at the weekend, before the shares rallied to close 1.4 percent higher.
In its results statement CBQ said the Turkish lender continued to operate in “challenging” economic conditions.
For the first half of the year Alternatifbank made a net loss of 57.8 million lira, which compared with a net profit of 75 million lira in the same period of 2015.
CBQ’s partly-owned United Arab Bank, a United Arab Emirates-based lender which CBQ said was also operating in a difficult market, reported a 79 percent fall in its first-half net profit.
Its other subsidiary, National Bank of Oman, achieved a 5 percent rise in profit for the period.
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