C Bk Qatar S Regulatory News (CBQS)

The Commercial Bank (Q.S.C.)

Financial Results for the Nine Months Ended 30 September 2015

 Net profit of QAR 1,341 million for the nine months ended 30 September 2015

18 Oct 2015, Doha, Qatar: The Commercial Bank Q.S.C. ("Commercial Bank" or "the Bank"), its subsidiaries and associates announced today its financial results for the nine month period ended 30 September 2015. The Bank reported a net profit of QAR 1,341 million as compared to QAR 1,553 million for the same period in 2014, a decrease of 13.7%.

Key financial highlights compared to the same period in 2014

· Net operating income up 4% to QAR 3,058 million

· Net profit of QAR 1,341 million

· Total assets up 4.3% to QAR 119.2 billion

· Customer loans and advances up by 3.8% to QAR 73.4 billion

· Customers' deposits up 10.3% to QAR 64.1 billion

· Earnings per share of QAR 3.98

His Excellency Sheikh Abdullah bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank, said, "The global economy continues to adjust to the challenges of a lower oil price, a continuation of low global interest rates, and a moderation in emerging markets' economic growth. Despite these challenges, Qatar's economy continues to diversify, recording the highest non-oil GDP growth rate in the GCC region. Commercial Bank's strategy, guided by its Board of Directors, enables it to take advantage of Qatar's growing private sector, utilising our 40 year heritage of servicing the financing needs of growing companies in Qatar and the region."

Financial Performance

Commenting on financial performance, Mr. Hussain Alfardan, Commercial Bank's Vice Chairman and Managing Director said, "Commercial Bank has continued to build on its strategy of creating sustainable value for our customers and shareholders. The continued successful execution of our strategy means that Commercial Bank remains well positioned to generate value even as we expect the growth of our markets to moderate. Commercial Bank delivered a solid performance for the nine month period of 2015, delivering a 4% increase in net operating income to QAR 3,058m. Commercial Bank's UAE associate partner United Arab Bank has experienced difficult market conditions resulting in prudent provisioning during the period, which has affected our net profit."

Net operating income increased by 4% to QAR 3,058 million for the nine months ended 30 September 2015, up from QAR 2,934 million achieved in the same period in 2014.

Net interest income was QAR 1,903 million for the nine months ended 30 September 2015, 2% lower than the same period of 2014, mainly due to a reduction in asset yields at AlternatifBank ("ABank"). Net interest margin decreased marginally to 2.5% as compared to 2.6% in the same period in 2014.

Non-interest income was up by 16% to QAR 1,155 million for the Nine Months ended 30 September 2015 compared with QAR 996 million. The overall increase in non-interest income was due to higher net fee and commission income, higher foreign exchange gains and profit on sale of property, which was partially offset by lower income from investments securities.

Total operating expenses were up by 3% at QAR 1,256 million for the nine months ended 30 September 2015 compared with QAR 1,220 million for the same period in 2014.

The Bank's net provisions for loans and advances were QAR 544 million for the nine months ended 30 September 2015, up 44% from QAR 377 million for the same period in 2014. The non-performing loan (NPL) ratio has reduced to 3.6 % at 30 September 2015 compared with 3.7% at the end of September 2014 and the coverage ratio increased to 81.3% as at 30 September 2015 compared to 68.3% as at 30 September 2014.

Impairment provisions on the Bank's investment portfolio reduced to QAR 25 million for the nine months ended 30 September 2015 compared with QAR 43 million for the same period in 2014.

Commercial Bank delivered balance sheet growth of 4% at the end of September 2015 with total assets at QAR 119.2 billion, compared to QAR 114.3 billion at the end of September 2014. Total asset growth was driven mainly by an increase of QAR 4.8 billion in investment securities and QAR 6 billion in customer deposits.

Loans and advances to customers were up by 3.8% to QAR 73.4 billion at 30 September 2015 compared with QAR 70.7 billion at the end of September 2014. The growth in lending has been generated, mainly in Services and Consumption Sectors.

Investment securities is up 35.1% to QAR 18.4 billion as at 30 September 2015 compared with QAR 13.6 billion at the end of September 2014. The increase is mainly in Treasury bills issued by the Central Bank and government bonds.

Customers' deposits increased by 10.3% to QAR 64.1 billion at 30 September 2015, compared with QAR 58.1 billion as at 30 September 2014. The increase was mainly in time deposits.

Mr. Abdulla Saleh Al Raisi, Commercial Bank's Chief Executive Officer, commented, "The dynamics of our markets mean that we are seeing a growing range of opportunities for Commercial Bank. The private sector is becoming an increasingly important driver of Qatar's economy, as well as those of our other markets, whilst the public sector continues to offer good opportunities. We have grown Commercial Bank by offering innovative and customer focused products and services despite the expected slowing of the economies in which we operate. Our net profit for the nine month period ended 30 September 2015 of QAR 1.3 billion was impacted by the increased provisioning levels at UAB. However, our results for this period represent a solid operating performance in increasingly challenging markets, with year on year growth on loans and advances by 3.8% to QAR 73.4 billion and customers' deposits growth by 10.3% to QAR 64.1 billion. The 4% increase in operating income was driven by the 16% increase in Fees and Other Income to QAR 1.1 billion.

Summarising the Bank's business achievements and initiatives for the third quarter of 2015, Commercial Bank signed a new "Al Dhameen program" portfolio agreement with Qatar Development Bank.  The Bank launched a number of summer promotions, namely a Ramadan and summer Credit Card campaign; an international money transfer campaign for Online Banking and Mobile Banking; an ATM-use campaign; a Personal, Vehicle and Mortgage summer Loan campaign; a Debit Card money back campaign; and a campaign for "Life in Qatar", Commercial Bank's specialised services for newly arrived expatriates.

Technological innovations during this same period included the launch of an enhanced Internet Banking website featuring first-to-market technologies, and the introduction of a live link with the Credit Bureau Office enabling Commercial Bank to offer the fastest approval times for loans in Qatar.

Commercial Bank was judged to be the best bank in Qatar for SMEs at The International Banker 2015 Middle East and Africa awards, complementing earlier awards success with Commercial Bank taking the accolade of "Best Retail Bank in Qatar 2015" from The Asian Banker earlier this year.

Subsidiary in Turkey

Alternatifbank ("ABank") delivered an 18.4% increase in net profit to TL 116 million for the nine months ended 30 September 2015 (TL 98 million for 2014).

Net operating income grew by TL 100 million to TL 472 million for the nine months ended 30 September 2015, from TL 372 million in 2014, mainly due to an increase in net fees and commission income and investment income. As at 30 September 2015, ABank had grown its customer lending by 34.7% to TL 10.7 billion and customers' deposits increased by 14.1% to TL 6.2 billion compared with 30 September 2014.

Associates in the UAE and Oman

National Bank of Oman

National Bank of Oman ("NBO") achieved a net profit of OMR 43 million for the nine months ended 30 September 2015 as compared to OMR 37 million, an increase of 16% over 2014. Net operating income grew by OMR 14 million to OMR 98 million, from OMR 84 million in same period 2014, mainly due to an increase in net interest income which was up 15% to OMR 70 million. As at 30 September 2015, NBO grew its customer lending by 12% to OMR 2.5 billion and customers' deposits reduced marginally to OMR 2.4 billion compared to 2014.

United Arab Bank

United Arab Bank ("UAB") delivered a net profit of AED 72 million for the nine months ended 30 September 2015 which is lower by 85% over the same period in 2014. The decrease in the profit is mainly due to UAB experiencing difficult market conditions which resulted in prudent provisioning during the period. The net operating income for the nine months ended 30 September 2015 was down by 3% to AED 998 million, from AED 1,032 million in 2014 with a solid underlying performance in Net Interest Income which was up by 5%, while a decrease in Non-Interest Income by 25%, as compared to the same period in 2014. UAB's loans and advances were down by 2% to AED 17.6 billion as at 30 September 2015, with customers' deposits at AED 18.3 billion, down 2% compared to 30 September 2014.

- END -

For more information please contact:

Ibrahim Al Emadi Jon Earl

Head of Corporate Communications Managing Director

Commercial Bank F T I Consulting

Tel: +974 4449 4748 Tel: +971 (0) 50 494 1178

Email: Ibrahim.alemadi@cbq.qa Email: jon.earl@fticonsulting.com

Notes to Editors

About Commercial Bank

Commercial Bank has total assets of QAR 119.2 billion as at 30 Sep 2015. As a full service commercial bank, the Bank offers a full range of corporate, retail and investment banking services as well as owning and operating exclusive Diners Club franchises in Qatar and Oman. The Bank's countrywide network includes  30 full service branches and 156 ATMs.

Profitable every year since incorporation in 1974, continual investment in technology and human capital, together with a strong capital base, provides a solid foundation for continued growth. A successful diversification strategy has expanded Commercial Bank's GCC footprint through strategic partnerships with associated banks, the National Bank of Oman (NBO) in Oman and United Arab Bank (UAB) in the UAE. NBO, the second largest bank in Oman with total assets of OMR 3.3 billion as at 30 Sep 2015, has 61 conventional branches and 6 Islamic branches in Oman and 1 branch each in Egypt, Abu Dhabi and Dubai. UAB is headquartered in Sharjah, with total assets of AED 25.8 billion as at 30 Sep 2015, and operates 30 branches across the emirates in the UAE. Building on the successful execution of the Bank's expansion strategy to date, Commercial Bank completed the acquisition of a majority stake in Alternatifbank in Turkey in July 2013.

Commercial Bank was awarded "Best retail bank in Qatar" for 2015 by The Asian Banker based on its wide-ranging achievements over the past three years and ambitious future plans. In recognition of the Bank's innovative customer focused products and services provided to SMEs, Commercial Bank also won the prestigious "Best Commercial (SME) Bank of the Year, Qatar" award from The International Banker for the year 2015.

The Bank is dedicated to supporting Qatar's community and social infrastructure through Corporate Social Responsibility programmes and sponsorship of various events. Title sponsorship of the Commercial Bank Qatar Masters and the Grand Prix of Qatar Moto GP reflects the Bank's promotion of excellence in sports and its keen interest in enhancing Qatar's international sporting reputation. To reinforce Qatar's flourishing cultural environment, Commercial Bank is the strategic partner of the Katara Cultural Village. This collaboration symbolises the Bank's commitment to supporting cultural activities in Qatar and making the country a regional arts and cultural hub.

www.cbq.qa

About Alternatifbank (ABank)

ABank was established in 1991 and has been listed on the Istanbul Stock Exchange since 1995. Commercial Bank became the majority shareholder in ABank in 2013 holding a 74.24% stake, following the acquisition of ABank shares of 70.84% from the Anadolu Group and 3.40% through a public tender offer. Anadolu Group remains a significant shareholder retaining 25% of shares in ABank. The bank completed a squeeze out process and its current shareholding in Abank is 75%.

ABank is a mid-size Turkish bank that predominately serves medium-sized companies through a country-wide network of 64 branches in 21 cities. ABank provides commercial/corporate banking services and products, with a special focus on the growing segment of Small and Medium-Sized Enterprises. The Bank's main product ranges cover trade finance instruments, working capital finance, cash management, and portfolio management. The Bank has also recently made a strategic decision to re-enter Retail Banking, targeting the "mass affluent segment" in terms of customer profile with tailor made products.

At 30 September 2015, ABank had total assets of TL 14.6 billion, total loans stood at TL 10.7 billion, customer deposits of TL 6.2 billion and shareholders' equity of TL 1.05 billion.

http://wwweng.abank.com.tr

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