Commercial Bank reports QR1.26 bn net profit for H1 amid strategic growth, global tax impact

Qatar Tribune

5 days ago

Tribune News Network
Doha
The Commercial Bank, its subsidiaries and associates (Group), on Wednesday announced a net profit of QR1,261.4 million for the first half of 2025, reflecting its continued resilience and commitment to long-term value creation, despite new global tax regulations and marketvolatility.
The Group reported a net profit before the application of the new BEPS Pillar Two tax at QR1,374.2 million for the six months ended 30 June 2025, down 12.5 percent from QR1,571 million during the same period in 2024. The decline was primarily attributed to increased losses from its Turkish subsidiary, Alternatif Bank, which widened by QR104.2 million, and changes related to long-term incentive schemes (LTIS), amounting to QR35.9 million. Adjusting for LTIS, the normalised net profit before tax stood at QR1,410.1 million.
With the implementation of the 15 percent global minimum top-up tax under the OECD's Base Erosion and Profit Shifting (BEPS) Pillar Two framework, the Group incurred a tax charge of QR112.9 million. Consequently, the net profit after tax declined to QR1,261.4 million in H1 2025, compared to QR1,571 million in H1 2024.
Commercial Bank Chairman Sheikh Abdulla bin Ali bin Jabor Al Thani said the bank had made significant progress on its five-year strategic plan (2022–2026), especially in digital innovation, client experience, and operational efficiency.
'As we approach the final stretch of our strategy, our focus remains on disciplined execution, delivering sustainable value, and aligning with Qatar National Vision 2030,' he said.
Vice Chairman and Managing Director Omar Hussain Alfardan highlighted the reaffirmation of the bank's credit ratings and a share buyback plan as testaments to investor confidence and the bank's robust fundamentals.
'The Board approved a share buyback plan of up to 10 percent of issued shares in May 2025, subject to regulatory approval. This aligns with our strategic goal of enhancing shareholder value and capital efficiency,' he said.
In June, the bank successfully issued a QR500 million senior unsecured bond under its EMTN programme, further diversifying its funding base. The period also saw the launch of a new corporate mobile banking app, which earned the 'Best Mobile Banking App – Qatar 2025' award from International Finance.
Commercial Bank Group CEO Joseph Abraham said the bank's performance in H1 2025 was driven by a strategic focus on diversified income sources, with total assets growing 13.2 percent year-on-year to QR182.1 billion.
'Our non-interest income grew 1.9 percent year-on-year, led by higher fee and commission-based income across transaction banking, cards, wealth management, and investments,' Abraham said.
Loans and advances to customers rose by 12.7 percent to QR103.8 billion, supported by growth in the corporate, government, and retail sectors. Investment securities increased by 26 percent to QR35.8 billion, with the bank locking in yields through high-quality investments.
Customer deposits reached QR83.5 billion, with low-cost deposits growing 10.2 percent and now constituting 42.1 percent of the deposit mix. Debt securities increased to QR11.4 billion, underscoring efforts to diversify funding.
Net provisions declined by 30.8 percent to QR244.1 million, reflecting recoveries and reversals. The ratio of non-performing loans to gross loans improved to 5.5 percent from 5.9 percent a year earlier, while the loan coverage ratio stood at a healthy 87.9 percent.
Alternatif Bank, the Group's Turkish subsidiary, reported a loss of QR107.1 million, driven by hyperinflationary accounting and market volatility.
Despite higher costs from digital innovation and operations in Turkey, the Group maintained a strong capital base. The Common Equity Tier 1 (CET1) ratio was 12.5 percent, while the Capital Adequacy Ratio (CAR) stood at 17.2 percent — both well above Qatar Central Bank and Basel III requirements.
From January 1, 2025, the Group began accruing the BEPS Pillar Two tax as per the OECD's Global Anti-Base Erosion (GloBE) rules, which seek to ensure that multinational enterprises are taxed at a minimum effective rate of 15 percent across all jurisdictions. The tax led to an incremental cost of QR112.9 million in the first half of the year.
In a move to enhance shareholder returns, the Group's board has approved a share buyback programme of up to 10 percent of fully paid-up issued shares. The programme awaits regulatory approval from Qatar Central Bank (QCB) and Qatar Financial Markets Authority (QFMA).
Looking ahead, Abraham said the bank remains committed to executing its strategic priorities while continuing to support Qatar's sustainable development goals.
'We are well positioned to adapt, innovate, and grow in a dynamic environment. Our performance in H1 2025 reflects strong fundamentals, prudent capital management, and a clear roadmap for long-term value creation,' heconcluded.