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CBQ declines most in 8 months on profit fall

February 11, 2014



The lender reported a 20 per cent slump in full-year profit to 1.6 billion riyals ($439 million), falling short of the 1.76 billion-riyal mean estimate of 12 analysts compiled by Bloomberg.



Commercial Bank of Qatar QSC tumbled the most in almost eight months after the Gulf nation's second- biggest lender reported profit that missed estimates. The shares fell 4.4 per cent, the most since June 23, to 69.7 riyals by 12:54pm in Doha. It was the biggest decliner on Qatar's QE Index by index points as trading volume in the stock reached five times the three-month daily average.







The lender reported a 20 per cent slump in full-year profit to 1.6 billion riyals ($439 million), falling short of the 1.76 billion-riyal mean estimate of 12 analysts compiled by Bloomberg.







Commercial Bank expanded into Turkey as it seeks to capture growing trade between the country and GCC states.







The purchase contributed to an increase of 40 per cent in total operating expenses, it said. The bank also more than tripled provisions for bad loans to 714 million riyals and recommended a 2 riyals per share cash dividend. That compares with 6 riyals a year ago, according to data compiled by Bloomberg. It also plans to pay one bonus share for every five held.







"The main issue is the shortfall in the profit because of higher operating expenses and provisions," Jaap Meijer, Dubai- based director of equity research at Arqaam Capital Ltd, said by phone. Investors are "disappointed" with the cash dividend, said Meijer, who recommends investors sell the stock.







The bank is seeking to raise money this year as it freezes costs and focuses on its main markets, including Qatar and the UAE, Chief Executive Officer Andrew Stephens said in an interview.












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Source: Khaleej Times (United Arab Emirates)


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