In This Article:
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Net Profit Before Tax: QAR704.3 million for Q1 2025, compared to QAR801.6 million for Q1 2024.
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Net Profit After Tax: QAR651.4 million after accounting for a QAR52.9 million tax charge.
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Operating Income: Decreased by 9.5% year-on-year.
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Net Interest Margin: 2.2%, expected to remain between 2.2% and 2.3% for the year.
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Fee and Other Income: Increased by 19.8% to QAR349.4 million year-on-year.
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Operating Expenses: Increased year-on-year, with a reported cost-to-income ratio of 31%.
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Net Provisions: Decreased to QAR149.1 million from QAR240.5 million in Q1 2024.
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NPL Ratio: Decreased to 5.9% from 6.2% at year-end.
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Total Assets: Increased by 1.7% to QAR169.1 billion.
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Gross Loans and Advances: Increased by 5.8% to QAR94.9 billion.
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Customer Deposits: Decreased by 3.8% to QAR76.4 billion.
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Capital Adequacy Ratio: Improved to 17.1% from 16.4% in March 2024.
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Turkish Subsidiary Loss: TRY311 million, equivalent to QAR31.9 million for Q1 2025.
Release Date: April 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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The Commercial Bank (Q.S.C.) (DSMD:CBQK) reported a net profit before tax of QAR704.3 million for Q1 2025, indicating resilience despite challenges.
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The bank's total fees and other income increased by 19.8% year-on-year, driven by growth in retail banking fees, wealth management, and remittances.
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The NPL ratio decreased to 5.9% from 6.2% at the year-end, showing improvement in asset quality.
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The capital adequacy ratio improved to 17.1% from 16.4% in March 2024, reflecting a strong capital position.
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The bank's retail lending growth was robust, increasing by 11.9% year-on-year, indicating strong demand in this segment.
Negative Points
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The top line showed a decline of 18%, primarily due to the variability in the share options scheme and a 15% global tax charge.
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The Turkish subsidiary, Alternatif Bank, reported a net loss of TRY311 million, equivalent to QAR31.9 million, impacting overall profitability.
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Net interest income decreased year-on-year, with a net interest margin of 2.2%, affected by higher funding costs and faster asset repricing.
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Operating expenses increased year-on-year due to investments in digital innovation and higher costs in Turkey, impacting the cost-to-income ratio.
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Customer deposits decreased by 3.8% to QAR76.4 billion, driven by a decline in time deposits, which could affect liquidity.
Q & A Highlights
Q: Can you provide guidance on net interest margins (NIMs) for 2025, and is the current funding model sustainable? A: NIMs are expected to remain between 2.2% to 2.3% for the year. The current funding model, which includes interbank funding, is sustainable. We are focusing on increasing low-cost deposits, which grew by 5.7% this quarter, and plan to issue Qatari Riyal bonds and overseas issuances to support funding. (Noman Ali, CFO)