Commercial Bank of Qatar posts 99% drop in Q4 profit

Commercial Bank of Qatar (CBQ), the Gulf Arab state’s third-largest lender by assets, reported a 99 per cent fall in fourth-quarter net profit on Wednesday, according to Reuters calculations.

This meant it widely missed analysts forecasts as it was hit by provisions and weakness among its overseas investments.

The bank earned a net profit of QAR1.4m ($384,499) in the three months to Dec. 31, compared with a profit of QAR100.9m in the same period a year earlier, Reuters calculated based on financial statements in lieu of a quarterly breakdown.

The average of three analysts polled by Reuters had forecast CBQ would make a quarterly profit of QAR52.2m.

The results, which follow a third-quarter net loss and four prior quarters of falling profits, are the first since the launch of a five-year plan by new chief executive Joseph Abraham in November to try to turn around its performance.

The bank has struggled with a rise in bad loans due to the fallout of lower hydrocarbon prices on the wider economy, which has forced cutbacks in state and consumer spending, as well as the weaker performance of some of its overseas investments.

CBQ, which last year raised its stake in Turkey’s Alternatifbank to 100 per cent and also holds shares in National Bank of Oman and United Arab Bank, reported annual 2016 net profit of QAR500.8m, down from QAR1.4bn the previous year.

It attributed the annual profit slump to a jump in provisions by roughly half to QAR1.27bn from QAR842m the year before.

The bank’s board recommended paying shareholders one bonus share for every 20 shares held. For 2015 it had recommended a cash dividend of QAR3 per share.