Commercial Bank of Qatar , the country’s second-largest lender by assets, reported a drop in fourth-quarter net profit on Monday, missing analysts’ forecasts as provisioning for bad loans rose substantially.
The bank made a net profit of 300 million riyals ($82.4 million) for the final three months of the year, a drop of 32.9 percent compared with 447.3 million riyals a year earlier, it said in a statement.
Five analysts polled by Reuters had, on average, expected a 5.6 percent decline in quarterly profit to 422.3 million riyals.
Provisioning in the quarter more than doubled to 346 million riyals from 136 million riyals, according to Reuters calculations based on the bank’s financial statements.
Full-year profit for 2013 fell 20.2 percent to 1.61 billion riyals.
The board of directors at the bank have recommended a cash dividend of 3.1 riyals per share and a 5 percent bonus share issue for 2013, the statement said. This is down from the 6 riyals paid for 2012.
Meanwhile, CBQ is studying a number of initiatives, including retaining earnings, to boost its capital base in the next 18 months, its group chief executive told Reuters.
The bank sold a 2 billion riyal ($549 million) capital-boosting bond in December, raising its capital adequacy ratio to 13.9 percent after its reserves had been depleted by high loan growth and its purchase of a majority stake in Turkey’s Alternatifbank.
“There are a number of initiatives which we are analysing to boost capital in the next 12 to 18 months,” Andrew Stevens said. He wouldn’t elaborate further, except to say there would be a proposal put to shareholders at their next meeting relating to retaining earnings.
CBQ will not complete any further acquisitions in the near future as it integrates the Turkish business into its organisation, Stevens said in a telephone interview from the bank’s Doha headquarters.
“If you look at our previous acquisitions, it has taken us two to three years to digest them. This time, it is different as this is a full-scale consolidation so time is needed to digest, work out the management strategy and improve the links and governance standards between the two parts,” Stevens said.
CBQ bought a 74.24 percent stake in Alternatifbank during 2013, part of a trend of Gulf banks looking to acquisitions to diversify their businesses away from competitive home markets.