DUBAI, Oct 24 – Commercial Bank of Qatar (CBQ), the Gulf Arab state’s third-largest lender by assets, reported a jump in third-quarter net profit as losses on bad loans fell.
The bank earned a net profit of 404.6 million riyals ($111.2 million) in the three months to Sept. 30, it said in a statement on Wednesday. That compares with a profit of 79.4 million riyals in the same period a year earlier.
EFG Hermes forecast the bank would post a profit of 419.7 million riyals, while SICO Bahrain forecast a profit of 426.2 million riyals.
The results mark a fifth consecutive quarter of profit growth for the bank, which until last year was hobbled by extra provisions to cover bad debt linked to troubles facing some of its overseas investments and weaker state and consumer spending in Qatar.
The bank’s net impairment losses on loans and advances dropped to 188.7 million riyals in the quarter, down from 489.3 million riyals in the same period a year ago.
“Our bottom line has benefitted from the reduction of our legacy loan book provisioning and is trending towards a normalised provisioning rate,” said group chief executive Joseph Abraham.
The reduction in provisions helped offset a decrease in net interest income and net fee and commission income.
Commercial Bank did not provide a quarterly breakdown of the performance of its business in Turkey, Alternatifbank.
Qatar National Bank (QNB), the largest bank by assets in the Middle East and Africa, earlier this month reported a foreign exchange translation loss of 2.97 billion riyals during the quarter, which analysts said was likely mainly related to the Turkish lira. QNB owns a bank in Turkey.
The lira has come under pressure this year as a result of investor concerns about Turkish President Tayyip Erdogan’s influence on monetary policy and an ongoing row with the United States that has resulted in reciprocal sanctions and trade restrictions.
Commercial Bank said it continued to classify its shares in United Arab Emirates-based United Arab Bank (UAB) as an asset held for sale.
The bank said in June it had ended talks to sell its 40 percent stake in UAB to Tabarak Investment, after the pair failed to agree terms.
($1 = 3.6400 Qatar riyals) (Reporting by Tom Arnold; Editing by Mark Potter)