Commercial Bank posts nine-month net profit before Pillar Two Tax of QR1,955.4mn

15/10/2025 02:42 AST

Commercial Bank posted a nine-month net profit before Pillar Two Tax of QR1,955.4mn, down 16.5% on the same period in 2024.

Commercial Bank's total assets stood at QR192bn (as of September this year), up 17.6% on September 30, 2024.

Commercial Bank noted, "Our results were impacted by a decrease in net interest income and an increase in loan impairment charges, offset by higher fee income.

On a normalised basis excluding the LTIS related changes, the adjusted Net Profit before Pillar Two Tax for the nine months ended September 30, 2025 is QR2,000.0mn.

"In relation to our core businesses, our retail and wealth business continues to deliver good and consistent returns. On the wholesale banking side, our strong innovation and customer centric culture continues as well as our penetration in cash management. Our associates continued to perform well as we continue to work closely with them in the execution of their strategies."

Commercial Bank Chairman Sheikh Abdulla bin Ali bin Jabor al- Thani said, "In the nine months of 2025, Commercial Bank advanced in digital innovation and enhancing client experience while ensuring alignment with Qatar National Vision 2030. Independent recognition, including Best Performing Bank in Qatar and awards for AI innovation, reflects the tangible impact of this work on customers and the wider economy.

"As we prepare to enter into the next phase of our strategy, with the recent appointment of our new Group CEO, Stephen Moss, we aim to position the bank for future profitable growth and continue to support the Qatar National Vision 2030."

Commercial Bank Vice Chairman and Managing Director Omar Hussain Alfardan said, "We continued to advance our digital leadership with recognition in AI innovation and introduced new propositions for retail, corporates and SMEs including Visa Commercial Pay. We invested in people by adopting 'Career Day' as an annual initiative to attract Qatari talent.

"We were recognised by the Ministry of Environment and Climate Change for Leadership in Sustainability. Together with ratings reaffirmations earlier this year, we believe we have strong foundations upon which to build as we prepare to enter the next phase of our strategy."

Group Chief Executive Officer Stephen Moss commented, "During my first two months as Group CEO, I have focused on listening carefully to key stakeholders namely our clients, our staff, our regulators and our shareholders. We are in the process of preparing for the next phase of our strategy and aim to update our stakeholders on our strategic priorities in the first quarter of 2026.

"We are in a country, which is forecast by many to be the fastest growing GCC economy in each of 2026 and 2027. We are well positioned as a strong domestic bank to support the needs of our clients through our best-in-class banking products and services."

Balance sheet: Total assets (as at September 30, 2025) reached QR192bn, an increase of 17.6% from September 30, 2024. This is mainly driven by an increase in loans and advances to customers and an increase in investment securities.

Loans and advances to customers increased to QR104bn, up by 14.7% due to higher corporate, government and public sector, retail lending and acceptances. Excluding acceptances which are trade related items, the loan growth is approx. 8.2%. Customer deposits totalled QR85.7bn as Commercial Bank focused on reducing high cost of funding, while growing low-cost deposits by 6.5%, which represents 37.5% of the total customer deposits mix.

Income statement: Commercial Bank reported a consolidated net profit after tax of QR1,785.5mn for the nine months that ended on September 30, which includes a BEPS Pillar Two Tax charge of QR169.9mn and a reported loss of QR132.7mn for the period from its subsidiary in Turkey, Alternatif Bank.

Net provisions increased by 12.7%, which included an increase in gross loan provisions as the Group continued to build loan provisions.

The bank's associates continued to perform strong as their contributions improved by 25.3%.

Credit quality: As of September 30, the ratio of non-performing loans to gross loans stood at 5.8%, compared to 6.0% (as of September 30, 2024).

During the nine months period up to September, the Group's net provisions increased to QR603.1mn, up from QR534.9mn compared to the same period in 2024. As of September 30, 2025, Loan Coverage Ratio for stage 3 loans was 56.9%.

Capital ratios: The Group's Common Equity Tier 1 (CET 1) Ratio (as at September 30) reached 13%. The Capital Adequacy Ratio (CAR) as at September 30 stood at 17.9%.

These ratios are higher than the regulatory minimum requirements of the Qatar Central Bank and Basel III requirements. BEPS Pillar Two Tax: The Group is subject to the global minimum top-up tax under Pillar Two tax legislation. The top-up tax relates to the Group's operations in Qatar.

The Group has accrued for BEPS Pillar Two Tax with effect from 1 January 2025 based on the applicable rules under Base Erosion and Profit Shifting (BEPS) Pillar Two Anti Global Base Erosion (GloBE) Rules.

The rules have multiple mechanisms that aim to ensure that qualified multinational enterprises maintain a minimum effective tax rate of 15% calculated based on the excess taxable profits in every jurisdiction in which Commercial Bank operates.

The incremental impact of these new taxes amounted to QR169.9mn for the nine months that ended on September 30 (nine-month period ended September 30, 2024: Nil). The Group may benefit from certain reliefs on the finalisation of the draft executive regulations in the fourth quarter of 2025.

Commercial Bank share buyback:
The Board of Directors approved at its meeting held on May 22 this year a 'Share Buyback' plan to purchase up to 10% of the bank's fully paid-up issued shares. The programme is pending regulatory approvals from the Qatar Central Bank (QCB) and Qatar Financial Markets Authority (QFMA).

Credit ratings: Commercial Bank's credit ratings remain strong, with Moody's and Fitch affirming the credit ratings at 'A2' and 'A' respectively. The summary of ratings are as follows:

 Moody's: A2 / Stable / P-1

 Fitch: A / Stable / F1

 S&P: A- / Stable / A-2

These ratings reflect continued confidence in the bank's financial strength, underpinned by solid capitalization, liquidity, and profitability, as well as the stable operating environment in Qatar. They also acknowledge the potential for sovereign support if ever required.

The consistency across agencies reinforces Commercial Bank's credibility and strategic position, providing a strong platform for long-term value creation.

Gulf Times