We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Wed 19 Oct 2016 12:45 PM

Font Size

- Aa +

Qatari bank CBQ swings to Q3 loss as impairments jump

Qatar's third-largest bank made a net attributable loss of $285,612 in the three months to Sept. 30

Qatari bank CBQ swings to Q3 loss as impairments jump

Commercial Bank of Qatar (CBQ) swung to a third-quarter net loss, it reported late on Tuesday, as the country's third-largest lender by assets was forced to set aside more cash to cover bad loans.

The results, the first since the appointment of former Australia and New Zealand Banking Group banker Joseph Abraham as chief executive, continue the bank's dismal earnings run, having posted falling profits in the preceding four quarters.

The bank made a net attributable loss of 1.04 million riyals ($285,612) in the three months to Sept. 30, the bank said in a financial statement.

That compared with a net attributable profit of 275.9 million riyals a year earlier, while the average forecast of four analysts polled by Reuters was for a quarterly profit of 281.7 million riyals.

Reuters had earlier calculated the earnings based on a separate statement which did not provide a quarterly breakdown.

Weighing on the bank's earnings was a near-tripling of net impairment charges against bad loans, which jumped to 504.9 million riyals in the third quarter from 167.6 million a year earlier.

Provision levels in the Gulf are being carefully watched as the region's banks feel the fallout of lower oil prices on the wider economy, which has forced cutbacks in state and consumer spending, as well as layoffs in a number of industries.

Saudi banks have been hit hard by third-quarter impairments, although other Qatari lenders which have so far reported earnings have not registered significant jumps.

In a statement, Abraham said a review of the bank since he joined had identified a need to recognise a number of non-performing loans.

"Both the board and the bank's leadership team view this as the necessary first step in aligning the business for the current and future economic environment and ensuring Commercial Bank builds sustainable earnings and is well positioned for the future," Abraham said.

The bank will update the market with other aspects of the review later in the year, Abraham said.

Quarterly net interest income fell by 13.5 percent to 563.2 million riyals and net fee and commission income fell by 30.7 percent to 170.7 million.

Loans and deposits levels both increased by 4 percent to 75.9 billion riyals and 66.7 billion riyals as of Sept. 30.

Arabian Business: why we're going behind a paywall

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.