(The Group’s Comments) The Net Profit of Commercial Bank Rises to QAR 934.08 Million in the First Half of 2019

(The Group’s Comments) The Net Profit of Commercial Bank Rises to QAR 934.08 Million in the First Half of 2019

July 17, 2019

· Profits: increased by 9.2% to QAR 934.1 million in the first half of 2019, compared to QAR 855.1 million for the same period in 2018, while the bank’s earnings per share amounted to QAR 0.23 versus QAR 0.21 for the corresponding period of 2018. The second quarter profits on the other hand reached QAR 503 million, compared to QAR 450 million for the same period of 2018. The bank's profits improved mainly due to a decrease of QAR 61 million in Other Expenses.

· Comprehensive Income: Commercial Bank recorded a first quarter valuation profits of QAR 252.4 million, versus a loss of QAR 532 for the same period of 2018.

· Operating Income: improved marginally by 0.76% by the end of the first half to reach QAR 1,846.6 million, versus to QAR 1,832.6 million for the same period of 2018. It was also noted that the net interest income decreased by 8.3%, but the increase in foreign exchange profits and the net commissions compensated for this decrease. Additionally, the reason behind this decrease in the net interest income (the bank’s primary source of profits) was a 26% drop in the Turkish lira during this period; it should be mentioned that the Commercial Bank owns the Turkish bank Alternatif, and therefore both financial statements are consolidated.

· Operating Expenses: decreased by 26% to QAR 980 million in this half, compared to QAR 1,056 million for the corresponding period of 2018 due to the drop of QAR 61 million in Other Expenses and the decrease of Employee Costs by QAR 18.7 million.

· In terms of asset quality, non-performing loans accounted for 4.9% of the total loan portfolio. The rate of coverage, which measures the provisions deducted to meet the decline in the value of these loans, is about 96.2%.

· Assets: Loans and advances decreased by 2.7% in this half, compared to the same period of 2018, due to the decline of the Turkish currency, as explained above. In contrast, deposits increased by 2.4%, as the ratio of loans to customer deposits reached 110.3%. In this half, the return on shareholders' equity stood at 5.63%, versus 5.57% for the corresponding period of last year, and the book value of the bank amounted to QAR 4.10 per share.

· Commercial Bank owns a 34.9% stake in National Bank of Oman (NBO), which posted steady profits at the end of the first half that amounted to OMR 25 million. Meanwhile, the profits of the bank's wholly-owned Turkish Bank Alternatif fell by QR62 million, as for Emirates based United Arab Bank (UAB), the Commercial Bank is still considering selling its stake in it.