Commercial Bank’s H1 2025 Profit Plunges Amid Rising Costs and Falling Interest Income

• The company's interest income declined by 4% year over year, and the net interest income margin experienced a substantial decline.

• Commercial Bank’s shares increased as much as 5% during H1 2025.

• Net profit was pressured by the lost revenues, a high cost of credit, and increased expenses, partially offset by reduced impairments.

Commercial Bank's stock price demonstrated a notable increase in stock price, beginning the year at 4.35 riyals per share and ending H1 2025 at 4.55 riyals per share, marking an increase of approximately 5%. This performance outperformed the Qatar Stock Exchange (QSE) Index, which saw an approximate 2% increase over the same period. Insider activity was notable in H1 2025, with insiders purchasing shares valued at 20 million QAR.

Here are the key numbers:

● Interest Income: 4,629 million QAR vs. 4,830 million QAR H1 2025 (a 4% YoY decline).

● Net Interest Income: 1,610 million QAR vs. 1,867 million QAR in H1 2025 (a 14% YoY decline).

● Net Profit: 1,261 million QAR vs. 1,571 million QAR in H1 2025 (a 20% YoY decline).

● Earnings per Share: 0.32 QAR/share vs 0.40 QAR/share in H1 2025 (a 20% YoY increase).

Commercial Bank Qatar faced a notable contraction in its net interest margin in H1 2025, decreasing from 39% in H1 2024 to 35%. On top of that, interest income for Commercial Bank showed a remarkable decline in H1 2025, exacerbating the financial impact of the adverse movement in the net interest margin. The reduction in the net interest margin alone contributed to a 78 million QAR drop in net profit, while the decline in interest income added a further negative impact of 179 million QAR. These combined factors significantly weighed on the bank's overall profitability. In response, the company is actively pursuing strategic initiatives aimed at mitigating these challenges and regaining a positive financial trajectory.

Shifting our focus to expenses, it's important to note the significant jump in staff expenses. This increase has adversely impacted net profit, totaling 134 million QAR. The increase can be largely attributed to a significant increase in the component related to performance rights.

Negative impacts are partially mitigated with a reduction in impairments, with a positive contribution to the net profit amounting to 132 million QAR.

For more comprehensive information, please refer to the reliable financial information source, http://sahmik.com.