Qatar's CBQ second quarter profit rises 7.7 percent, tops forecasts

Qatar’s CBQ second quarter profit rises 7.7 percent, tops forecasts

Commercial Bank of Qatar (CBQ) posted a nearly 8-percent rise in quarterly profit on Wednesday on lower provisions and the recovery of impairments taken in two previous quarters, beating analysts' forecasts.

July 19, 2012 11:45 by Reuters

The Gulf Arab state’s third-largest lender by market value earned 546 million riyals ($149.95 million), up 7.7 percent from 509.6 million riyals a year earlier.

Analysts had forecast average quarterly profit of 486.56 million riyals, according to a Reuters poll.

“The second quarter included the recovery of the provision taken in the previous two quarters for a single domestic Islamic banking corporate account,” CBQ said, without giving further details.

The bank posted a first-half net profit of 1.1 billion riyals, it said in a statement, compared to 955.5 mln riyals in the year-earlier period.

Loans and advances grew 10 percent to 43.9 billion riyals at the end of June. Lending growth came from both corporate and retail businesses, CBQ said. Net provisions were down 64 percent to 32 million riyals in the first half of the year.

Customer deposits rose 17 percent to 40.6 billion riyals from the year-earlier period, the lender said.

Total assets rose 8 percent to 73.3 billion riyals as of June 30 compared with the year-earlier period. Meanwhile, total operating expenses rose 10 percent to 455 million riyals due to a 6-percent increase in staff costs.

“Whilst public sector lending has grown in the second quarter, private sector credit demand has remained subdued and at a lower level than the first half of 2011,” said Andrew Stevens, CBQ Group’s chief executive.

“Despite this, we have grown both our loan book and our deposit base and have further diversified our sources of funding.”

In April CBQ launched a $500 million five-year bond. In February it signed a $455 million term loan with a club of seven regional and international banks, with the cash to be used for general corporate purposes, the bank said, without giving further detail on tenor or pricing.

Banks in Qatar are expected to benefit from heavy state spending on infrastructure as the world’s fastest growing economy prepares to host the 2022 World Cup.

Shares in CBQ closed flat at 71 riyals before the results were announced.

($1=3.638 Qatari riyals)

(Reporting By Regan Doherty; Editing by Amran Abocar)