Doha Bank's Net Profit Declines by 25% to QR 830.2 Million

January 30, 2019

Profit: Doha Bank announced its results for 2018, showing a decline of 25% compared to the previous year. The profit posted in 2018 stood at QR 830.2 million compared to QR 1,110.1 million in 2017.  This decline is mainly ascribed to the application of Financial Standard IFRS 9, which led to deducting the expected credit loss in 2018 by QR951.7 million, compared to QR592.5 million in 2017, an increase of QR359.2 million; in addition to a decrease in net interest income of QR 175 million, which negatively affected profits.


Earnings per share: Deducting the share of the capital bondholders, the earning per share amounted to QR1.97 per share, compared to QR3.02 in 2017, down by 35%. This decline is consider high in light of the steady earnings registered within the past two years.

Comprehensive Income:  comprehensive income at the end of 2018 amounted to QR 864.4 million compared to QR 1,157.5 million at the end of 2017. The statement of comprehensive income showed the bank incurred losses as result of foreign currencies translation worth QR 18.7 million, compared to a profit of QR 11.5 million in 2017.


Application of IFRS 9: In 2018, the bank implemented the Financial Standard IFRS 9, which significantly affected shareholders 'equity; it negatively impacted shareholders' equity by QR 1,555 million at the end of 2018, or 12.2% of total equity, or 18.0% of the total equity attributable to shareholders of the bank.

Assets: Assets increased by 2.8% between 2018 and 2017 to reach QR 96.1 billion at the end of 2018. As for loans and advances to customers (the main source of interest income), it stood at QR 59.8 billion, accounting for 62% of the bank's assets, or 108% of customer deposits, a high percentage indicating the bank used all funding resources available in lending.

Asset Quality: Quality of assets has deteriorated, as evidenced by the rate of non-performing loans in 2018 which reached 5.85% compared to 3.16% in 2017. The coverage ratios also declined from 106% at the end of 2017 to 98% at the end of 2018.

 Shareholders' Equity: As mentioned above, shareholders' equity has been affected by the application of IFRS 9 and decreased by 18% to QR 2,074 million. This decrease is due to the bank's recognition of incurring credit losses and impairment of financial assets, as risk reserve fell by 1, 233 million between 2018 and 2017.

Revenues: Net interest decreased by 7.7% to QR 2,081 million compared to QR 2,255 million at the end of 2017. The decrease is due to higher interest expense (cost of deposits) than interest income. Net interest income accounts for 79% of the total operating income.