3rd Quarter Results

Commercial Bank of Qatar

Financial Results for the nine months to 30 September 2014

Commercial Bank increases profit for nine months by 19% to QAR 1,553 million

29 October 2014, Doha, Qatar: The Commercial Bank of Qatar Q.S.C. ("Commercial Bank" or "the Bank") and its subsidiaries and associates announced today its financial results for the nine months to 30 September 2014. The Bank delivered a net profit of QAR 1,553 million for the nine months of 2014, a 19% increase in profitability compared to the equivalent nine months of 2013. On a quarterly basis, Commercial Bank generated net profit of QAR 503 million in the third quarter 2014, an increase of 79% compared to the third quarter 2013.

Key financial highlights

· Net Operating income up 22% to QAR 2,951 million

· Net profit up 19% to QAR 1,553 million

· Total assets up 8.6% to QAR 114 billion

· Customer loans and advances up 8.9% at QAR 71 billion

· Customers' deposits up 1% to QAR 58 billion

· Earnings per share of QAR 1.54

Sheikh Abdullah bin Ali bin Jabor Al Thani, Chairman of the Board of Directors of Commercial Bank said, "Qatar's economy continues to grow robustly despite a slowing global economy. The most recent GDP growth figures of 5.7% for the country demonstrate Qatar's resilience as the country diversifies its economy, generating an increasing share of revenue from non-hydrocarbon sectors. Commercial Bank has benefited during the period from the successful execution of its strategy across its operations in Qatar, Turkey, the UAE and Oman and we remain confident in our full year performance."

Financial Performance

Mr. Hussain Al Fardan, Commercial Bank's Vice Chairman and Managing Director, added, "The third quarter has seen a solid performance from Commercial Bank, a strong year-on-year performance from ABank and continued consistent profit generation from our Associates in the UAE and Oman. These performances have enabled Commercial Bank to deliver a 79% year-on-year increase in quarterly profit from QAR 281 million to QAR 503 million."

Net operating income increased by 22% to QAR 2,951 million in the nine months of 2014, up from QAR 2,419 million achieved in the same period in 2013. ABank delivered net operating income of QAR 626 million for the nine months of 2014 an increase of 11 % over the same period in 2013.

Net interest income was QAR 1,955 million for the nine months ended 30 September 2014, 26% higher than in the same period in 2013, reflecting strong growth in lending activities and the consolidation of ABank. ABank contributed QAR 493 million, 25% of the total net interest income. Net interest margin increased to 2.8% as compared to the second quarter of 2014 at 2.7%.

Non-interest income was up 15.4% to QAR 996 million in the first nine months of 2014 compared with QAR 863 million for the same period in 2013 with ABank contributing QAR 133 million. The overall increase in non-interest income was due to higher net fee and commission income and was partially offset by lower income from investments securities and foreign exchange.

Total operating expenses were up 36% to QAR 1,237 million in the first nine months of 2014 compared with QAR 911 million for the same period in 2013. Excluding ABank, expenses increased by 9% for the first nine months of 2014 compared to the same period in 2013 as Commercial Bank continued to invest in its people and infrastructure.

The Bank's net provisions for loans and advances were QAR 378 million for the nine months ended 30 September 2014, up from QAR 368 million provided in the same period for 2013. The non-performing loan ratio has reduced to 3.71% at 30 September 2014 compared with 3.82% at the end of June 2014 and the coverage ratio has increased to 68.3% as at September 2014 compared to 67.3% in June 2014.

Impairment provisions on the Bank's investment portfolio reduced to QAR 43 million for the nine months ended 30 September 2014 compared with QAR 77 million for the same period in 2013.

Commercial Bank delivered strong balance sheet growth at the end of the first nine months of 2014 increasing by 8.6% with total assets at QAR 114.3 billion, compared to QAR 105.3 billion at the same period in 2013. ABank contributed QAR 18.7 billion of assets for the period. Balance sheet growth was driven mainly by an increase of QAR 5.8 billion in lending to customers combined with an increase of QAR 2.4 billion in due from banks.

Loans and advances to customers were up by 9% to QAR 70.7 billion at 30 September 2014 compared with QAR 64.9 billion at the end of September 2013. The growth in lending since 30 September 2013 has been generated, mainly, in the Government, Contracting, Real Estate and Retail Sectors. Loans and advances to customers of QAR 12.7 billion at ABank were included at 30 September 2014.

Investment securities were down by 4.5% to QAR 13.6 billion at 30 September 2014 compared with QAR 14.3 billion at the end of September 2013. The reduction in investment securities is mainly due to the maturity of Qatar Government bonds. Investment securities of QAR 2.5 billion at ABank were included at 30 September 2014.

Customers' deposits have grown marginally by 0.8% to QAR 58.1 billion at 30 September 2014, compared with QAR 57.7 billion as at 30 September 2013. The increase in deposits has come mainly from higher demand and savings balances. Partially offsetting this increase was a reduction in time deposits due to the Bank having received funds from the EMTN issuance in June 2014. This reflects our strategy to ensure continued diversification of our funding base and our focus on growing low cost funds.

Mr Andrew Stevens, Group Chief Executive Officer, commented, "The strategies we have put in place across our regional assets are demonstrating good progress. We have focused on improving our returns and we have done this by only pursuing lending opportunities that match our return expectations, continuing to attract lower cost deposits, diversifying our funding base and effectively managing our costs."

Mr. Abdulla Saleh Al Raisi, Commercial Bank's Chief Executive Officer, commented, "Commercial Bank has delivered a robust performance. The Qatari market remains highly competitive and we have maintained our selective approach to lending opportunities. We continue to defend and drive our profitability in Wholesale and grow our market share in Retail by offering a convenient and multi-channelled banking experience to our customers. We have seen good progress from our Turkish business, ABank. The investment we have made in its leadership, operations and marketing over the past year since our acquisition are now being realised with a significant improvement in ABank's year on year quarterly performance."

Subsidiary in Turkey

Alternatifbank ("ABank") delivered a 95% increase in net profit to TL 99 million for the nine months ended 30 September 2014 (TL 50 million for the same period in 2013).

Net operating income grew by TL 35 million to TL 371 million in the first nine months of 2014, from TL 336 million in the nine months ended 30 September 2013, due mainly to an increase in net fees and commission income. As at 30 September 2014, ABank had grown its customer lending by 32% to TL 7.9 billion and customers' deposits increased by 28% to TL 5.4 billion compared with the same period in 2013.

Associates in the UAE and Oman

National Bank of Oman and United Arab Bank have achieved a strong financial performance for the nine months of 2014 with a 24% improvement in profitability as compared to the same period in 2013.

National Bank of Oman

National Bank of Oman ("NBO") achieved a net profit of OMR 37 million for the nine months ended 30 September 2014 as compared to OMR 31 million, an increase of 19% over the same period in 2013. Net operating income grew by OMR 6.4 million to OMR 84 million, from OMR 78 million in the nine months ended 30 September 2013, mainly due to an increase in net interest income which was up 6% to OMR 59 million. As at 30 September 2014, NBO grew its customer lending by 7% to OMR 2.3 billion and customers' deposits increased by 24% to OMR 2.7 billion compared with the same period in 2013.

United Arab Bank

United Arab Bank ("UAB") delivered a net profit of AED 498 million for the nine months ended 30 September 2014 which represents an increase of 20% over the same period in 2013. The net operating income for the nine months ended 30 September 2014 increased by 24% to AED 795 million, from AED 643 million for the same period in 2013 with solid underlying performance from both Net Interest Income and Non-Interest Income, up 33% and 50% respectively against the same period in 2013. UAB's loans and advances increased by 18% to AED 17.9 billion as at 30 September 2014, with customers' deposits at AED 18 billion, up 20% compared to the same period in 2013.

- END -

For more information please contact:

Ibrahim Al Emadi Jon Earl

Head of Corporate Communications Managing Director

Commercial Bank F T I Consulting

Tel: +974 4449 4748 Tel: +971 (0) 50 494 1178

Email: [email protected] Email: [email protected]

Notes to Editors

About Commercial Bank

Commercial Bank has total assets of QAR 114 billion as at 30 September 2014. As a full service commercial bank, the Bank offers a full range of corporate, retail and investment banking services as well as owning and operating exclusive Diners Club franchises in Qatar and Oman. The Bank's countrywide network includes 31 full service branches and 152 ATMs.

Profitable every year since incorporation in 1974, continual investment in technology and human capital, together with a strong capital base, provides a solid foundation for continued growth. A successful diversification strategy has expanded Commercial Bank's GCC footprint through strategic partnerships with associated banks, the National Bank of Oman (NBO) in Oman and United Arab Bank (UAB) in the UAE. NBO, the second largest bank in Oman with total assets of OMR 3.4 billion as at 30 September 2014, has 62 branches in Oman and 1 branch each in Egypt, Abu Dhabi and Dubai. UAB is headquartered in Sharjah, with total assets of AED 25.2 billion as at 30 September 2014, and operates 28 branches across the emirates in the UAE. Building on the successful execution of the Bank's expansion strategy to date, Commercial Bank completed the acquisition of a majority stake in Alternatifbank in Turkey in July 2013.

Commercial Bank enjoys strong credit ratings of (A) from Fitch, (A1) from Moody's and (A-) from Standard & Poor's. The Bank is listed on the Qatar Exchange and was the first Qatari bank to list its Global Depository Receipts (GDRs) as well as bonds on the London Stock Exchange. Commercial Bank's Swiss Franc bond issuance in December 2010, listed on the SIX Swiss Exchange, was the first public bond issuance by a Qatari bank in Switzerland. Commercial Bank's latest bond issuance in June 2014 is listed on the Irish stock exchange.

The Bank is dedicated to supporting Qatar's community and social infrastructure through Corporate Social Responsibility programmes and sponsorship of various events. Title sponsorship of the Commercial Bank Qatar Masters and the Grand Prix of Qatar Moto GP reflects the Bank's promotion of excellence in sports and its keen interest in enhancing Qatar's international sporting reputation. To reinforce Qatar's flourishing cultural environment, Commercial Bank is the strategic partner of the Katara Cultural Village. This collaboration symbolises the Bank's commitment to supporting cultural activities in Qatar and making the country a regional arts and cultural hub.

www.cbq.qa

About Alternatifbank (ABank)

ABank was established in 1991 and has been listed on the Istanbul Stock Exchange since 1995. Commercial Bank became the majority shareholder in ABank in 2013 holding a 74.24% stake, following the acquisition of ABank shares of 70.84% from the Anadolu Group and 3.40% through a public tender offer. Anadolu Group remains a significant shareholder retaining 25% of shares in ABank.

ABank is a mid-size Turkish bank that predominately serves medium-sized companies through a country-wide network of 73 branches in 27 cities. ABank provides commercial/corporate banking services and products, with a special focus on the growing segment of Small and Medium-Sized Enterprises. The Bank's main product ranges cover trade finance instruments, working capital finance, cash management, and portfolio management. The Bank has also recently made a strategic decision to re-enter Retail Banking, targeting the "mass affluent segment" in terms of customer profile with tailor made products.

At 30 September 2014, ABank had total assets of TL 11.7 billion, total loans stood at TL 7.9 billion, customer deposits of TL 5.4 billion and shareholders' equity of TL 883 million.

http://wwweng.abank.com.tr