Commercial Bank of Qatar suffers 3% decline in net profit in second quarter of 2014
Commercial Bank of Qatar (CBQ) suffered a 3 percent decline in second-quarter net profit, Reuters calculations based on half-year figures from the bank showed on Wednesday, as higher costs and provisions overshadowed strong loan growth.
The bank earned a net QR502.6 million ($138.1 million) in the three months to June 30 against QR518.2 million in the same period last year, Reuters calculated as the bank did not provide quarterly results breakdown in an earnings statement. It made a net QR1.05 billion in the first six months of 2014, up 3 percent on the same period last year, the filing said.
Analysts had on average forecast a quarterly profit of QR512.8 million, according to a Reuters poll.
The bank has now reported declining profit in four of the last five quarters, as higher provisioning dragged down earnings.
Impairment allowances in the second quarter totalled QR226.7 million, 55.8 percent up on the same period last year, according to Reuters calculations. For the first six months of 2014, impairments totalled QR286 million, the statement showed, a 33 percent increase year-on-year.
Meanwhile, operating expenses in the first six months of the year jumped 65 percent year-on-year to 828 million riyals, although the increase was only 11.6 percent when costs associated with Alternatifbank - the Turkish lender which CBQ bought last year - were excluded.
Higher costs and provisioning erased the benefits which CBQ accrued from another quarter of strong lending growth.
Total loans stood at QR69.4 billion on June 30, up 4 percent since the start of the year, with lending to government clients, industry and the real estate sector the predominant drivers, the statement said.
CBQ has been rapidly expanding its lending activities in recent quarters as it - like other banks in Qatar - benefit from the billions of riyals being ploughed into the local economy by the government for infrastructure development and preparations for hosting the 2022 soccer World Cup.
Deposits, which have also been growing strongly in recent quarters, stood at QR59.8 billion on June 30, up 27.6 percent on the same point of 2013.