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(The Group's
Comment) Al Khalij Net Profit Rises 10.5% to QR 608.4 Million in
2018
January 24, 2019
• Al Khalij Commercial Bank disclosed its results for 2018,
which showed a profit increase of 10.50% compared to 2017; that
is, QR 608.40 million compared to QR550.52 million by the end of
2017. This improvement was due to the reduced allocations to
meet the decline in loans and advances. As for the comprehensive
income, it amounted to QR 607.84 million by the end of 2018,
meaning that the items of comprehensive income recorded a loss
of about QR568 thousand against a profit of about QR 47 million
at the end of 2017.
• The Bank's assets declined by 10% in 2018 to QR52.10 billion,
compared to QR 57.89 billion at the end of 2017. This decrease
resulted from a decrease in loans and advances by QR 3.78
billion in 2018 and by 10.78% over 2017. Financial investment
declined by QR1.85 billion or 14.76%, as the bank sold some of
these investments, and reclassified others to comply with
international standards, resulting in a loss of about QR 11.6
million transferred to the fair value reserve.
• In terms of customer deposits, it fell by 12.50% in 2018
compared with the previous year. Most of this decline was due to
a decrease in term deposits which reached QR25.80 billion
compared to QR 30.0 billion at the end of 2017. Looking into the
bank's deposit structure, we find that it is made up of 90% term
deposits and 10% demand deposits.
• Shareholders' equity decreased by 10.00% at the end of 2018 to
reach QR 6.57 billion compared to QR 7.29
billion at the end of 2017. This decrease was due to the
implementation of Standard No. 9, where QR 766 million was
transferred from the risk reserve account.
Return on equity for 2018
hit 9.25% versus 8.75% at the end of 2017. The yield improved
mainly due to a decrease in shareholders' equity.
• Net interest income decreased by 7% and net operating profit
fell by 5.9% to QR 1.14 billion compared to 1.21 billion at the
end of 2017. The Bank recouped some of its provisions and its
revenues worth QR 36 million. In addition, the provision for
decline of loans and advances amounted to QR 93 million, leding
to higher profits despite lower revenues.
• The Board of Directors of the Company recommended to the
General Assembly the distribution of 7.5% (dividend yield 6.43%)
of the nominal value of capital as cash dividends for the year
2018, which is the same percentage for the year 2017.
• The stock currently trades at PE multiple of 6.95 times, and a
book value multiple of 1.74 times.
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