International rating agency Fitch Ratings has assigned long-term, short-term, individual and support ratings to the Commercial Bank of Qatar (CBQ) of 'BBB+', 'F2', 'C' and '2' respectively. The rating outlook is stable. The bank's ratings reflect its improved operating performance, diversified revenue structure in comparison with other local peers, acceptable liquidity ratios, adequate capitalization and the likelihood of support given its market share of deposits in a relatively small banking system.
These factors are balanced by potential concerns over the ability to sustain earnings growth over a full economic cycle and concentration of risks to the government and retail sectors. A restructuring process initiated by senior management has focused on regrouping the organizational structure into four distinct business divisions, centralization of back office operations, re-branding and renovation of the branch network, strengthening of the risk management process and recruitment of new senior professionals.
Restructuring combined with a surge in lending and widening of interest margins has underpinned performance in 2001 and 2002. Increasing reserve coverage of non-performing loans (NPLs) in 2002 has helped improve asset quality. Core lending activities are funded by a growing and stable deposit base with an 8.5 percent market share of total deposits.
CBQ was incorporated in the State of Qatar in 1975, as the first wholly owned private commercial bank in Qatar. Leading merchant families of Qatar hold a 39 percent shareholding in the bank, though no single shareholder has more than a five percent stake in the bank. The remaining 61 percent is widely held by Qatari nationals.
As a universal bank CBQ provides broad range of products in retail, corporate, treasury and investment services. With a domestic network of 13 branches, three pavilions (manned kiosks), 36 ATMs and three deposit machines spread throughout Qatar, CBQ has built up a 9.3 percent share of total assets. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
