Qatar bank CBQ swings to loss

Bad loan pro­vi­sions al­most triple

Kuwait Times - - BUSINESS -

Com­mer­cial Bank of Qatar (CBQ) swung to a third-quar­ter net loss, it re­ported late on Tues­day, as the Gulf Arab state’s third­largest 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 rec­og­nize 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.—Reuters

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.