Q3 2026 Qatar National Bank QPSC Earnings Call

October 12, 2026

Rahul Bajaj: Hello. Good morning. Good afternoon to everyone who has joined this call today. This is Rahul Bajaj here from the Citi Financials research team here out of Dubai. We are very delighted to host Qatar National Bank's Q3 2026 earnings call today. Joining us from QNB today, we have Ramzi Jammal, Group Chief Financial Officer; Noor Mohammed Al-Naimi, SEVP Group Treasury and FI; and Mark Abrahams, EVP Group Treasury, Funding. Without further delay, I will pass on the call to Mark to start his opening remarks.

Rahul Bajaj: Hello. Good morning. Good afternoon to everyone who has joined this call today. This is Rahul Bajaj here from the Citi Financials research team here out of Dubai. We are very delighted to host Qatar National Bank's Q3 2026 Earnings call today. Joining us from QNB today, we have Ramzi Mari, Group Chief Financial Officer; Noor Mohamed Al-Naimi, SEVP Group Treasury and FI; and Mark Abrahams, EVP Group Treasury Trading. Without further delay, I will pass on the call to Mark to start his opening remarks.

Speaker #1: Hello, good morning, and good afternoon to everyone who has joined this call today. This is Rahul Bajaj from the Citi Financials Research team, here out of Dubai.

Speaker #1: We are very delighted to host Qatar National Bank's Q3 2026 earnings call today. Joining us from QNB today, we have Ramzi Murray, Group Chief Financial Officer; Noor Mohammad El-Nemi, SEVP, Group Treasury; Faiz; and Marc Abrahams, EVP, Group Treasury & Trading.

Speaker #1: Without further delay, I'll pass the call to Marc to start his opening remarks.

Speaker #2: Thank you very much, Rahul and Siti, for hosting our call today. Before we begin, it is customary to remind everyone that this call is for investors and analysts only.

Mark Abrahams: Thank you very much, Rahul and Citi for hosting our call today.

Mark Abrahams: Thank you very much, Rahul and Citi for hosting our call today. Before we begin, it is customary to remind everyone that this call is for investors and analysts only, and any media should please disconnect now. I will begin today by providing a brief overview of the economic backdrop in the region and Qatar. We will then proceed to give a summary of our nine-month financial performance, and then open the floor to questions and answers.

Mark Abrahams: Before we begin, it is customary to remind everyone that this call is for investors and analysts only, and any media should please disconnect now. I will begin today by providing a brief overview of the economic backdrop in the region and Qatar. We will then proceed to give a summary of our nine-month financial performance, and then open the floor to questions and answers. The beginning of 2026 was characterized by a resilient global economic backdrop, driven by artificial intelligence and technology-driven investments, and private sector demand. Momentum has weakened since the beginning of March 2026 due to the geopolitical events in the Middle East. This resulted in disruption of commodity and energy markets and of course, heightened volatility.

Speaker #2: And any media should please disconnect now. I will begin today by providing a brief overview of the economic backdrop in the region and Qatar.

Speaker #2: We will then proceed to give a summary of our nine-month financial performance, and then open the floor to questions and answers. The beginning of 2026 was characterized by a resilient global economic backdrop, driven by artificial intelligence and technology-driven investments.

Mark Abrahams: The beginning of 2026 was characterized by a resilient global economic backdrop, driven by artificial intelligence and technology-driven investments, and private sector demand. Momentum has weakened since the beginning of March 2026 due to the geopolitical events in the Middle East. This resulted in disruption of commodity and energy markets and of course, heightened volatility.

Speaker #2: And private sector demand: momentum has weakened since the beginning of March 2026 due to the geopolitical events in the Middle East. This resulted in disruption of commodity and energy markets, and, of course, heightened volatility.

Speaker #2: In its July 2026 World Economic Outlook update, the IMF nevertheless noted that the global economy had remained resilient and projected growth of 3% in 2026 and 3.4% in 2027.

Mark Abrahams: In its July 2026 World Economic Outlook update, the IMF nevertheless noted that the global economy had remained resilient and projected growth of 3% in 2026 and 3.4% in 2027, as technology-led momentum partly offsets the impact of the conflict, while risks remain tilted to the downside. These events affected the overall outlook and macroeconomic landscape for GCC countries, primarily due to the suspension of trade via the Strait of Hormuz and the impact on the region's energy, transport, and other industrial infrastructure. Beyond the hydrocarbon sector, the local economy has proven resilient and has returned to normal operation. The latest data also confirms that the underlying non-hydrocarbon economy remained in expansion mode despite regional disruptions. Qatar's non-mining and quarrying economy, which represents 75% of the GDP, expanded by 2.6% year on year in Q2 2026, with H1 growth coming in at 3.1%.

Speaker #2: As technology-led momentum partly offsets the impact of the conflict, while risks remain tilted to the downside. These events affected by the—sorry, these effects events affected the overall outlook and macroeconomic landscape, the GCC countries, primarily due to the suspension of trade via the Strait of Hormuz.

Speaker #2: And the impact on the region’s energy, transport, and other industrial infrastructure. Beyond the hydrocarbon sector, the local economy has proven resilient and has returned to normal operation.

Mark Abrahams: Beyond the hydrocarbon sector, the local economy has proven resilient and has returned to normal operation. The latest data also confirms that the underlying non-hydrocarbon economy remained in expansion mode despite regional disruptions. Qatar's non-mining and quarrying economy, which represents 75% of the GDP, expanded by 2.6% year on year in Q2 2026, with H1 growth coming in at 3.1%.

Speaker #2: The latest data also confirms that the underlying non-hydrocarbon economy remained in expansion mode, despite regional disruptions. Qatar’s non-mining and quarrying economy, which represents 75% of GDP, expanded by 2.6% year-on-year in the second quarter of 2026, with first-half growth coming in at 3.1%.

Speaker #2: Growth was broad-based across all key sectors, including real estate, financial and insurance, wholesale and retail trade, and construction, up mid- to high-single digits.

Mark Abrahams: Growth was broad-based across all key sectors, including real estate, financial and insurance, wholesale and retail trade, and construction up mid to high single digits. This expansion partly balanced the hydrocarbon output reduction, which resulted in an 11.4% contraction in overall real GDP for the first six months. As conditions normalize, the resumption of hydrocarbon production and exports, alongside continued growth in trade and services, is expected to support a broad-based strengthening of economic activity. Higher energy prices are expected to provide support to external and fiscal balances. Furthermore, QatarEnergy revenues and in turn, Qatar government income, will also be helped by the ramp-up of operations at the Golden Pass terminal in Texas, the United States. Against this backdrop, Qatar's medium-term economic outlook remains constructive. The country's strong sovereign balance sheet, prudent macroeconomic policies, and continued investment program provide a very solid foundation for recovery.

Speaker #2: This expansion partly balanced the hydrocarbon output reduction, which resulted in an 11.4% contraction in overall real GDP for the first six months. As conditions normalized, the resumption of hydrocarbon production and exports, alongside continued growth in trade and services, is expected to support a broad-based strengthening of economic activity.

Speaker #2: Higher energy prices are expected to provide support to external and fiscal balances. Furthermore, Qatar's energy revenues—and, in turn, Qatar government income—will also be helped by the ramp-up of operations at the Golden Pass terminal in Texas, United States.

Mark Abrahams: Higher energy prices are expected to provide support to external and fiscal balances. Furthermore, QatarEnergy revenues and in turn, Qatar government income, will also be helped by the ramp-up of operations at the Golden Pass terminal in Texas, the United States. Against this backdrop, Qatar's medium-term economic outlook remains constructive. The country's strong sovereign balance sheet, prudent macroeconomic policies, and continued investment program provide a very solid foundation for recovery.

Speaker #2: Against this backdrop, Qatar's medium-term economic outlook remains constructive. The country's strong sovereign balance sheet, prudent macroeconomic policies, and continued investment programs provide a very solid foundation for recovery.

Speaker #2: We continue to expect recovery in hydrocarbon activity, expansion of LNG production capacity, and new export infrastructure to support economic growth over the medium term.

Mark Abrahams: We continue to expect recovery in hydrocarbon activity, expansion of LNG production capacity, and new export infrastructure to support economic growth over the medium term. The hydrocarbon expansion will be further supplemented by a broader investment pipeline of more than 60 billion US dollars, including non-hydrocarbon infrastructure projects through public-private partnerships and other real estate and hospitality projects in the next five years. To manage this economic expansion, Doha Investment, a dedicated platform, has been established to oversee the Qatar Investment Authority's domestic portfolio. This entity aims to expand the private sector's role in driving economic growth, deepening local capital markets, and ensuring local businesses remain globally competitive. The Qatari banking system remains robust and resilient.

Speaker #2: The hydrocarbon expansion will be further supplemented by a broader investment pipeline of more than $60 billion USD, including non-hydrocarbon infrastructure projects, through public-private partnerships, as well as other real estate and hospitality projects over the next five years.

Speaker #2: To manage this economic expansion, Doha Investment, a dedicated platform, has been established to oversee the Qatar Investment Authority's domestic portfolio. This entity aims to expand the private sector's role in driving economic growth, deepen local capital markets, and ensure local businesses remain globally competitive.

Mark Abrahams: To manage this economic expansion, Doha Investment, a dedicated platform, has been established to oversee the Qatar Investment Authority's domestic portfolio. This entity aims to expand the private sector's role in driving economic growth, deepening local capital markets, and ensuring local businesses remain globally competitive. The Qatari banking system remains robust and resilient.

Speaker #2: The Qatari banking system remains robust and resilient, following its review of recent geopolitical developments. The QCB has reiterated that the financial system is operating from a position of strength, highlighting strong liquidity, capital levels significantly above regulatory requirements, and strong provisioning coverage against credit risk.

Mark Abrahams: Following its review of recent geopolitical developments, the QCB has reiterated that the financial system is operating from a position of strength, highlighting strong liquidity, capital levels significantly above regulatory requirements, and strong provisioning coverage against credit risk. This was reinforced by September rating actions with Fitch and S&P maintaining their ratings. In summary, Qatar has demonstrated remarkable institutional, operational, and financial resilience. This also supported the strength of the banking system, which continues to operate from a position of stability. I will now move on to QNB's financial results for the nine months ended 30 September 2026. Key financial results were as follows. Net profit was 13.3 billion Qatari riyals, or $3.7 billion, growth 4% compared to last year.

Speaker #2: This was reinforced by September rating actions, with Fitch and S&P maintaining their ratings. In summary, Qatar has demonstrated remarkable institutional, operational, and financial resilience.

Mark Abrahams: In summary, Qatar has demonstrated remarkable institutional, operational, and financial resilience. This also supported the strength of the banking system, which continues to operate from a position of stability. I will now move on to QNB's financial results for the nine months ended 30 September 2026. Key financial results were as follows. Net profit was 13.3 billion Qatari riyals, or $3.7 billion, growth 4% compared to last year.

Speaker #2: This also supported the strength of the banking system, which continues to operate from a position of stability. I will now move on to QNB's financial results for the nine months ended 30 September 2026.

Speaker #2: Key financial results were as follows: net profit was QAR 13.3 billion, or $3.7 billion USD, reflecting growth of 4% compared to last year. Robust revenue growth resulted in an increase in operating income to QAR 36 billion, or $9.9 billion USD, up 8%, demonstrating QNB Group's success in maintaining growth across the range of revenue sources.

Mark Abrahams: Robust revenue growth resulted in an increase in operating income to 36 billion Qatari riyals, or $9.9 billion, up 8%, demonstrating QNB Group's success in maintaining growth across the range of revenue sources. QNB's cost-to-income ratio remains strong at 24.3%, which is one of the best ratios among large financial institutions in the Middle East and Africa region. Total assets were at 1.46 trillion Qatari riyals, or $402 billion, up by 5% from the same period last year. Loans and advances reached 1.06 trillion Qatari riyals, or $291 billion, up by 6%. QNB continued to attract deposits, which increased by 2% from September 2025 to reach 979 billion Qatari riyals, or $269 billion. This reaffirms the strong confidence of our customers and investors, in addition to the quality and resilience of QNB Group. The group's regulatory loans-to-deposit ratio remained at 99%.

Speaker #2: QNB’s cost-to-income ratio remained strong at 24.3%, which is one of the best ratios among large financial institutions in the Middle East and Africa region.

Speaker #2: Total assets were at QAR 1.46 trillion, or $402 billion USD, up by 5% from the same period last year. Loans and advances reached QAR 1.06 trillion, or $291 billion USD, up by 6%.

Mark Abrahams: Total assets were at 1.46 trillion Qatari riyals, or $402 billion, up by 5% from the same period last year. Loans and advances reached 1.06 trillion Qatari riyals, or $291 billion, up by 6%. QNB continued to attract deposits, which increased by 2% from September 2025 to reach 979 billion Qatari riyals, or $269 billion. This reaffirms the strong confidence of our customers and investors, in addition to the quality and resilience of QNB Group. The group's regulatory loans-to-deposit ratio remained at 99%.

Speaker #2: QNB continued to attract deposits, which increased by 2% from September 25 to reach 979 billion Qatari riyals, or $269 billion USD. This reaffirms the strong confidence of our customers and investors, in addition to the quality and resilience of QNB Group.

Speaker #2: The Group's regulatory loan-to-deposit ratio remained at 99%. QNB Group's ratio of non-performing loans to gross loans is at 2.7%, reflecting the high quality of the Group's loan book and the effective management of credit risk.

Mark Abrahams: QNB Group's ratio of non-performing loans to gross loans is at 2.7%, reflecting the high quality of the group's loan book and the effective management of credit risk. In addition, the coverage ratio on stage 3 loans remains strong at 97%. Total equity increased to QAR 134 billion, up by 10% from 25 September. The bank's capital adequacy ratio, at 19.7%, is comfortably higher than both QCB and the latest Basel III reform requirements. In relation to the QNB buyback program, QNB has completed buyback of 149.4 million shares at a cost of QAR 2.5 up to 30 September 2026. The buyback execution remains in progress. We will now turn to Q&A. Thank you.

Speaker #2: In addition, the coverage ratio on Stage 3 loans remains strong at 97%. Total equity increased to QAR 134 billion, up by 10% from September 2025.

Speaker #2: The bank's capital adequacy ratio at 19.7% is comfortably higher than both QCB and the latest FAL3 reform requirements. In relation to the QNB buyback program, QNB has completed the buyback of 149.4 million shares at a cost of QR 2.5, up to September 30th, 2026.

Mark Abrahams: The bank's capital adequacy ratio, at 19.7%, is comfortably higher than both QCB and the latest Basel III reform requirements. In relation to the QNB buyback program, QNB has completed buyback of 149.4 million shares at a cost of QAR 2.5 up to 30 September 2026. The buyback execution remains in progress. We will now turn to Q&A. Thank you.

Speaker #2: The buyback execution remains in progress. We will now turn to Q&A. Thank you.

Speaker #1: Thanks, Mark. Maybe before we hand over the floor to the operator to take the questions, I'll ask a few questions to begin with. The first one is on deposits, and you mentioned that there was notable deposit growth.

Rahul Bajaj: Thanks, Mark. Maybe before we hand over the floor to the operator to take the questions, I will ask a few questions to begin with. The first one is on deposits, and you mentioned that there was a notable deposit growth. If I double-click on that and look at the Qatari versus non-Qatari mix of deposits, there is a stark difference in trends. Qatari deposits seem to have gone down, at least on a Q-on-Q basis, whereas international deposits have gone up. If you could help us understand what is going on, why is this kind of stark difference in deposit flows, that would be very useful. So that is my first question. My second question is around non-credit provisions. Through this year, we have seen a sizable jump in non-credit provisions the bank has taken to the P&L, and that continued in Q3.

Speaker #1: But if I double-click on that and look at the Qatari versus non-Qatari mix of deposits, there's a very, there's a stark sort of difference in trend.

Speaker #1: The Qatari deposits seem to have gone down, at least on a Q-on-Q basis, whereas international deposits have gone up. So, if you could help us understand what's going on—why is there this kind of stark difference in deposit flows—that would be very useful.

Rahul Bajaj: If you could help us understand what is going on, why is this kind of stark difference in deposit flows, that would be very useful. So that is my first question. My second question is around non-credit provisions. Through this year, we have seen a sizable jump in non-credit provisions the bank has taken to the P&L, and that continued in Q3.

Speaker #1: So that's my first question. My second question is around non-credit provisions. Throughout this year, we have seen a sizable jump in non-credit provisions that the bank has taken through the P&L.

Speaker #1: And then that continued in the third quarter. I just wanted to understand what is driving it, and how should we think about this non-credit provision line going forward over the next few quarters.

Rahul Bajaj: Just wanted to understand what is driving it, and how should we think about this non-credit provision line going forward over the next few quarters. So that is my second question. My third and final question around margins. With the rate hike which came in for Fed rate last month, how should we think about medium term margin trajectory for QNB? Also kind of baking in the fact that you probably will see a few rate cuts in Turkey to also come in over the forecast horizon. So those are my three questions. Thank you.

Speaker #1: So that's my second question. And my third and final question around margins: with the rate hike, which came in for the Fed rate last month, how should we think about the medium-term margin trajectory for QNB?

Speaker #1: Also kind of baking in the fact that, yeah, we’ll probably see a few rate cuts in Turkey come in over the forecast horizon.

Speaker #1: So, those are my three questions. Thank you.

Speaker #2: I thank you, Rahul. This is the race for the questions. In terms of deposits, Qatari versus non-Qatari deposits, what we have seen is a return of our usual clients from our international operations, as things have normalized.

Durraiz Khan: Thank you, Rahul. This is Durraiz Khan for the questions. In terms of deposits, Qatari versus non-Qatari deposits, what we have seen is that a return of our usual clients from our international operations, as things have normalized. So this is what is driving the deposit trend. As usual, we go to the source which would give us the most cost-effective deposit solution. As long as we are getting cost-effective deposits from our international franchise in London, Paris, Singapore, and Hong Kong, that is something that we would prefer. Non-credit provisions are specifically for certain customers which have been classified in Qatar, and have LCs or LGs outstanding. As long as the customer is classified, and since the bank has a commitment to meet those LCs and LGs as and when they fall due, we have to make sure we fully provide those.

Speaker #2: So this is what is driving the deposit trend. And as usual, we go to the source, which would give us the most cost-effective deposit solutions.

Speaker #2: So, as long as we are getting cost-effective deposits from our international franchise in London, Paris, Singapore, and Hong Kong, that is something we would prefer.

Durraiz Khan: As long as we are getting cost-effective deposits from our international franchise in London, Paris, Singapore, and Hong Kong, that is something that we would prefer. Non-credit provisions are specifically for certain customers which have been classified in Qatar, and have LCs or LGs outstanding. As long as the customer is classified, and since the bank has a commitment to meet those LCs and LGs as and when they fall due, we have to make sure we fully provide those.

Speaker #2: Non-credit provisions are specifically for certain customers who have been classified in Qatar and have letters of credit or letters of guarantee outstanding. As long as a customer is classified, and since a bank has a commitment to meet those LCs and LGs as and when they fall due, you have to make sure we fully provide for those.

Speaker #2: So those are one-offs. We generally did not have those things in line previously, but these items have come up because a particular customer was classified, which has these outstanding.

Durraiz Khan: So those are one-offs. We generally did not have those things in line previously, but those things have come up because a particular customer was classified which has these outstanding. In terms of margin trajectory, we expect that the margin for the full year would remain between 260 to 265 basis points. The margin, in terms of US Fed increase, it has happened very late in the cycle to impact Q3. Our margin has slightly gone down this quarter, primarily because this rate increase was very much priced in by the market, so it did impact the cost of the deposits as we were raising deposits in the third quarter of the year. But it does not yet reflect on the asset pricing, because that asset pricing, a lot of it will actually happen in Q1 of next year. But we expect that we will be within the range.

Speaker #2: In terms of margin trajectory, we expect that the margin for the full year will remain between 260 to 265 basis points. Regarding the margin in terms of the US Fed increase, it has happened very late in the cycle to impact Q3.

Speaker #2: Even with a lot of that, our margin has slightly gone down this quarter, primarily because this rate increase was very much priced in by the market.

Durraiz Khan: Our margin has slightly gone down this quarter, primarily because this rate increase was very much priced in by the market, so it did impact the cost of the deposits as we were raising deposits in the third quarter of the year. But it does not yet reflect on the asset pricing, because that asset pricing, a lot of it will actually happen in Q1 of next year. But we expect that we will be within the range.

Speaker #2: So it did impact the cost of the deposits, as we were raising deposits in the third quarter of the year. But it does not yet reflect on the asset pricing, because that asset pricing—a lot of it will actually happen in the first quarter of next year.

Speaker #2: But we expect that we will be within the range. In terms of—you're talking about Turkey—Turkey, we expect that between October and December, the policy rate would go down by 100 basis points each.

Durraiz Khan: In terms of you are talking about Turkey. Turkey, we expect between October and December, the policy rate would go down by 100 basis points each. So two cuts we are expecting, but we do not think it will have a material impact for us because it would be very late in the cycle for us to actually move the needle significantly. I hope I have covered all your questions. This is where the answer is all clear. Operator, can we open the floor for Q&A?

Speaker #2: So, two cuts we are expecting, but we do not think it will have a material impact for us because it would be very late in the cycle for us to actually move the needle significantly.

Speaker #2: And so, I hope I've covered all your questions.

Speaker #1: That's very clear—the results are all clear. Operator, can we open the floor for Q&A?

Rahul Bajaj: This is where the answer is all clear. Operator, can we open the floor for Q&A?

Speaker #3: If you wish to participate in the Q&A, you can use the 'Raise Hand' function at the bottom of your Zoom screen at any time to join the queue to ask a question.

Operator: If you wish to participate in the Q&A, you can use the raise hand function at the bottom of your Zoom screen at any time to join the queue to ask a question. Once called upon, please unmute your audio to ask your question. If you have joined via a phone line, please press star nine to raise your hand. Thank you. Our first question comes from Rahul Rajan. Please unmute your line to ask your question.

Speaker #3: Once called upon, please unmute your audio to ask your question. If you have joined via a phone line, please press *9 to raise your hand.

Speaker #3: Thank you. Our first question comes from Rahul Rajan. Please unmute your line to ask your question.

Speaker #4: Hi, good afternoon. Thank you for the opportunity to ask questions. I have a few questions from my side, please. Firstly, regarding the guidance for this year, if you can please let us know if there are any updates to the guidance.

Rahul Rajan: Hi. Good afternoon. Thank you for the opportunity to ask questions. A few questions from my side, please. Firstly, on the guidance for this year, if you can please let us know if there is any updates to the guidance, at the QNB Group level, Turkey, as well as the Egyptian operations. That is number one. Secondly is from an asset quality perspective, we have seen higher NPLs, this quarter sequentially. So if you can help us understand what is driving this, in which geography and if there is any specific sectors where you see any buildup of asset quality-related issues. On these lines, if you can also sort of explain or throw some light on how the asset quality situation is specifically in Qatar, given the prolonged conflict.

Speaker #4: At the QNB Group level, Turkey as well as the Egyptian operations—that's number one. Secondly, from an asset quality perspective, we have seen higher NPLs this quarter, sequentially.

Rahul Rajan: Secondly is from an asset quality perspective, we have seen higher NPLs, this quarter sequentially. So if you can help us understand what is driving this, in which geography and if there is any specific sectors where you see any buildup of asset quality-related issues. On these lines, if you can also sort of explain or throw some light on how the asset quality situation is specifically in Qatar, given the prolonged conflict.

Speaker #4: So, if you can help us understand what's driving this—in which geography—and if there are any specific sectors where you see any buildup of asset quality-related issues.

Speaker #4: And on these lines, if you can also sort of explain or throw some light on how the asset quality situation is specifically in Qatar given the prolonged conflict and finally is from your deposits, you have been earlier alluding to the fact that international deposits have started to sort of charge a premium to the extent of around 25 basis points compared to the earlier times.

Rahul Rajan: And finally is, from your deposits, you have been earlier alluding to the fact that international deposits have started to sort of charge a premium to the extent of around 25 basis points compared to the earlier times. So how are you finding the deposit rates for international deposits, especially in terms of the premium? Are you still seeing the higher rates compared to local deposits? Yes. Those are my three questions. Thank you.

Speaker #4: So how are you finding the deposit rates for international deposits, especially in terms of the premium? Are you still seeing higher rates compared to local deposits?

Speaker #4: Yes, those are my three questions. Thank you.

Speaker #2: Okay, Rahul, step by step. Well, first we'll go to the guidance. We are revising our guidance for the full year. By approximately one bit down, across both ranges, across balance sheet and P&L, from profit for profit and loss, we are going from 5 to 7 percent growth to 4 to 6 percent growth for the full year now.

Durraiz Khan: Okay, Rahul. Step by step, but first we go to the guidance. We are revising our guidance for the full year by approximately one bps down across both ranges, across balance sheet and P&L. For profit and loss, we are going from 5% to 7% growth to 4% to 6% growth for the full year now. For loans and advances and total assets, we are going from 6% to 8% growth to now 5% to 7% growth. In terms of deposits, we are actually revising it down to 3% to 4% growth for the full year. Our NIM guidance, 260 to 265 basis points does not change, and our cost of risk guidance is slightly downward at between 70 to 75 basis points. So that is the guidance for the full year.

Speaker #2: For loans in advances and total assets, we are going from 6 to 8 percent growth to now 5 to 7 percent growth. In terms of deposits, we are actually revising it down to 3 to 4 percent growth for the full year.

Durraiz Khan: For loans and advances and total assets, we are going from 6% to 8% growth to now 5% to 7% growth. In terms of deposits, we are actually revising it down to 3% to 4% growth for the full year. Our NIM guidance, 260 to 265 basis points does not change, and our cost of risk guidance is slightly downward at between 70 to 75 basis points. So that is the guidance for the full year.

Speaker #2: Our NIM guidance, 260 to 265 basis points, does not change. And our cost of risk guidance is slightly downward at between 70 to 75 basis points.

Speaker #2: So, that is the guidance for the full year. In terms of asset quality, the sequential increase in NPL—almost all of it is coming from Turkey.

Durraiz Khan: In terms of asset quality sequentially increase in NPL, almost all of it is coming from Turkey. This is expected as, the nominal rates and the real rates are extremely high, and we do expect rates to come down. But we expect that Turkey would be the primary driver for increase in the NPL, even in Q4. In terms of what's happening in Qatar, because of the conflict, as we have explained, is that the conflict is primarily focused on or isolated to oil and gas sector. The non-oil and gas economy is continuing to perform much better than expected, and we do not have any major exposure of the oil and gas sector. That's why we are so far not seeing the translation of the conflict directly into what we have on our balance sheet or what we have on our P&L.

Speaker #2: This is expected, as the nominal rates and the real rates are extremely high. We do expect rates to come down, but we expect that Turkey will be the primary driver for the increase in NPL, even in Q4.

Speaker #2: In terms of what's happening in Qatar, because of the conflict, as we have explained, the conflict is primarily focused on, or isolated to, the oil and gas sector.

Durraiz Khan: In terms of what's happening in Qatar, because of the conflict, as we have explained, is that the conflict is primarily focused on or isolated to oil and gas sector. The non-oil and gas economy is continuing to perform much better than expected, and we do not have any major exposure of the oil and gas sector. That's why we are so far not seeing the translation of the conflict directly into what we have on our balance sheet or what we have on our P&L.

Speaker #2: The non-oil and gas economy is continuing to perform much better than expected, and we do not have any major exposure to the oil and gas sector.

Speaker #2: That's why we are, so far, not seeing the translation of the conflict directly into what we have on our balance sheet or what we have on our P&L.

Speaker #2: What we do have to keep an eye on, and we keep reiterating, is the hospitality sector, which is a very small portion of our balance sheet.

Durraiz Khan: Where we do have to keep an eye on and we keep reiterating, is the hospitality sector, which is a very small portion of our balance sheet, and we are making sure that we are taking adequate provisions as and when things arise. In terms of international deposits, we need to keep in mind that when we were talking about slight premium, it was back at the height of the conflict in the first quarter, particularly in the months of March and April. Those things have slightly dissipated now, and what is driving the slight deposit cost right now is the interest rate outlook, where market is expecting interest rates to actually go up.

Speaker #2: And we are making sure that we are taking adequate provisions as and when things arise. In terms of international deposits, we need to keep in mind that when we were talking about a slight premium, it was back at the height of the conflict in the first quarter, particularly in the months of March and April.

Durraiz Khan: In terms of international deposits, we need to keep in mind that when we were talking about slight premium, it was back at the height of the conflict in the first quarter, particularly in the months of March and April. Those things have slightly dissipated now, and what is driving the slight deposit cost right now is the interest rate outlook, where market is expecting interest rates to actually go up.

Speaker #2: Those things have slightly dissipated now. What is driving the slight deposit cost right now is the interest rate outlook, where the market is expecting interest rates to actually go up.

Speaker #2: So, if we are trying to increase the duration of our deposits at this point in time, we have to slightly pay up based on the current interest rate outlook, particularly for dollars, with markets expecting some further rate hikes to come in.

Durraiz Khan: If we are trying to increase the duration of our deposits at this point in time, we have to slightly pay up based on the current interest rate outlook, particularly for dollars, which is markets are expecting some further rate hikes to come in. That is what is primarily the reason for the increase in the cost of deposits.

Speaker #2: So that is primarily the reason for the increase in the cost of deposits.

Speaker #4: Thank you. Sorry, if I could just ask one more question, please.

Rahul Rajan: Thank you. Sorry if I could just ask one more question, please.

Speaker #2: Of course.

Durraiz Khan: Of course.

Speaker #4: This is on the thank you. This is on the fees side of things. We have seen strong fee generation on the international franchise, but I think there has been some weakness in fees and FX on the domestic Qatari franchise.

Rahul Rajan: Thank you. This is on the fees side of things. We have seen a strong fee generation on the international franchise, but I think there has been some weakness in fees and FX on the domestic Qatari franchise. How do you see non-funded income as such remain in Q4 and also going into 2027? Thank you.

Speaker #4: So how do you see non-funded income as such in Q4, and also going into 2027? Thank you.

Durraiz Khan: International will continue to perform as slightly higher than the balance sheet growth that they are projecting for the full year. In terms of QAR fee income, FX, as we say, is cyclical. Q3 is slightly low, but other than that, we are not aware of any major changes in outlook for Qatari. It is more or less in line with the balance sheet growth.

Speaker #2: Internationally, the country is expected to perform slightly higher than the balance sheet growth that they are projecting for the full year. In terms of Qatari fee income, FX—as we say—is cyclical.

Speaker #2: Q3 is slightly low, but other than that, we're not aware of any major changes in outlook for Qatari. It's more or less in line with the balance sheet growth.

Speaker #4: Thank you.

Rahul Rajan: Thank you.

Speaker #3: Thank you. Our next question comes from Murad Ansari. Please unmute your line to ask your question.

Operator: Thank you. Our next question comes from Murad Ansari. Please unmute your line to ask your question.

Speaker #5: Yes, good afternoon, and thanks for the presentation. Just really two quick questions—firstly, on deposits. So, for a bank of your size, which has access to all international and global markets, I'm guessing you have more ability and flexibility to raise deposits from international markets.

Murad Ansari: Yes. Good afternoon, and thanks for the presentation. Just really two quick questions, firstly on deposits. For a bank like your size, which has access to international and global, I am guessing you have more ability, flexibility to raise deposits from international markets. But I just wanted to get some sense on what is happening on the domestic market, what we have seen as your Domestic Qatari operation deposit base has come off versus the last quarter. So just wanted to get a sense of how you are seeing the domestic market and funding cost. Also, I think when we look at the breakup on the related party side, I think the GRE related deposits have come off a little bit.

Speaker #5: But I just wanted to get some sense of what's happening in the domestic market. What we've seen is your domestic Qatari operation deposit base has come off versus last quarter.

Murad Ansari: But I just wanted to get some sense on what is happening on the domestic market, what we have seen as your Domestic Qatari operation deposit base has come off versus the last quarter. So just wanted to get a sense of how you are seeing the domestic market and funding cost. Also, I think when we look at the breakup on the related party side, I think the GRE related deposits have come off a little bit.

Speaker #5: So I just wanted to get a sense of how you're seeing the domestic market and funding costs. Also, when we look at the breakdown on the related party side, I think the GRE-related deposits have come off a little bit.

Speaker #5: Is that something that's more temporary, or is there more reliance from the government on these deposits now that the revenue base on the petrochemical or energy side has obviously been impacted?

Murad Ansari: Is that something that is more temporary or there is more reliance from the government on these deposits now that the revenue base has, obviously on the petrochemical side or energy side, has been impacted? Secondly, I know it is kind of a moving number, but the hyperinflation charge this quarter was quite low versus what we have seen as an average in H1 during the first two quarters. Just some overview, if you could help us explain what happened here and what we expect in Q4. Thank you.

Speaker #5: And secondly, I know it's kind of a moving number, but the hyperinflation charge this quarter was quite low versus what we've seen as an average in the first half, during the first two quarters.

Speaker #5: So, just some overview: if you could help us explain what happened here, and what we expected for the quarter. Thank you.

Durraiz Khan: Yes. Thank you, Murad. In terms of deposits, what we see is some cyclical impact being reflected on the balance sheet. Again, we can speak for ourselves and our total deposits that we put in the system as part of QCB reporting, compared to December, in terms of total deposits, we are up. We are almost flattish, slightly positive, and offset of that is coming in from, the increase is coming in from our international operations. Again, I would rather wait for the September sector data to come in before commenting further as to what is happening in the entire sector. In terms of the GREs, the numbers have come down. Again, if somebody has a deposit and wants to use it for whatever reasons, we have an obligation to ensure that that money is available to them.

Speaker #2: Yes, thank you, Murad. In terms of deposits, what we see is some cyclical impact being reflected on the balance sheet. And again, we can speak for ourselves and our total deposits that we put in the system as part of QCB reporting.

Speaker #2: Compared to December, in terms of total deposits, we are up. We are almost flattish, slightly positive, and the offset to that is coming from the increase in our international operations.

Speaker #2: Again, I would rather wait for the September sector data to come in before commenting further as to what's happening in the entire sector. In terms of the GREs, the numbers have come down.

Durraiz Khan: Again, I would rather wait for the September sector data to come in before commenting further as to what is happening in the entire sector. In terms of the GREs, the numbers have come down. Again, if somebody has a deposit and wants to use it for whatever reasons, we have an obligation to ensure that that money is available to them.

Speaker #2: Again, if somebody has a deposit and wants to use it for whatever reason, we have an obligation to ensure that the money is available to them.

Murad Ansari: Sure.

Speaker #2: And it's our job to ensure that we give guidance, or we give the numbers that— or we are committed to certain numbers, growth numbers, and we are trying to make sure that we meet those numbers.

Durraiz Khan: It is our job to ensure that we give guidance or we give the numbers that, or we are committed to certain numbers, growth numbers, and we are trying to make sure that we meet those numbers. Hyperinflation, fairly simple. The interest rates, the inflation rate in Turkey has come down. From a quarter-to-quarter basis, if we come at when they started the year, the three months average inflation in Q, three months cumulative inflation was 10%, which came down in Q2 to 7%, which has come down in Q3 to 5%. This is what is driving the hyperinflation number lower. Our team expects that the inflation number would remain. It is now, for the first time in 30 years, it has gone below 30%, and it is now at 29.7%. Our team basically expects that it would stay at this number for the rest of the year.

Speaker #2: Hyperinflation, fairly simple. The interest rates the inflation rate in Turkey has come down. So from a quarter to quarter basis, if we come at when they started the year, the three months average inflation in Q three months cumulative inflation was 10%, which came down in Q2 to 7%, which has come down in Q3 to 5%.

Durraiz Khan: From a quarter-to-quarter basis, if we come at when they started the year, the three months average inflation in Q, three months cumulative inflation was 10%, which came down in Q2 to 7%, which has come down in Q3 to 5%. This is what is driving the hyperinflation number lower. Our team expects that the inflation number would remain. It is now, for the first time in 30 years, it has gone below 30%, and it is now at 29.7%. Our team basically expects that it would stay at this number for the rest of the year.

Speaker #2: This is what is driving the hyperinflation number lower. Our team expects that the inflation number will remain as it is now; for the first time in 30 years, it has gone below 30%.

Speaker #2: And it's at 29.7%. Our team basically expects that it will stay at this number for the rest of the year. So for Q4, we expect a slightly higher hyperinflation charge because if the number stays the same, the inflation rate remains the same.

Durraiz Khan: For Q4, we expect slightly higher hyperinflation charge because of if the number stays the same, inflation rate remains the same, but our profitability will increase the total equity and the total non-monetary position, which will result in slightly higher charge for the period. It is simply directionally interest rate was down, the inflation rate was down and was down significantly more than the market was expecting.

Speaker #2: But our profitability will increase the total equity and the total non-monetary position, which will result in a slightly higher charge for the period. But it is simply directionally—interest rate was down, and sorry, the inflation rate was down, and was down significantly more than the market was expecting.

Speaker #5: Thank you.

Murad Ansari: Thank you.

Speaker #3: Thank you. Our next question comes from Jiro Ghosh. Please unmute your line to ask your question.

Operator: Thank you. Our next question comes from Chiro Ghosh. Please unmute your line to ask your question.

Speaker #4: Hi, this is Jiro Ghosh from Secau Baharin. Thanks for all the clarification. A few more questions from my side: could you give us some clarity on the Egyptian operation? I mean, at least the ground reality—how are you seeing it?

Chiro Ghosh: Hi, this is Chiro Ghosh from SICO Bahrain. Thanks for all the clarification. A few more questions from my side is, if you can give us some clarity on the Egyptian operation. I mean at least the ground reality, how are you seeing it? Not much was shared this time. If you can give some clarity on that, the borrowing appetite, asset quality, at least directionally. Second question is, how is the borrowing appetite within the Qatari market basically? You clarified that except in the non-oil and gas sector, there is no asset quality concern. But I want to know from a borrowing appetite perspective, how are you seeing it? How are the economic activities basically driving that borrowing appetite on those non-oil and gas sector? Third is, both Turkey and Egypt, how high is your currency risk basically? These are my three questions.

Speaker #4: Because not much was shared this time, so if you can give some clarity on that—the borrowing appetite, asset quality—those at least directionally.

Speaker #4: Second question is, how is the borrowing appetite within the Qatari market, basically? You clarified that, except in the non-oil and gas sector, there is no asset quality concern. But I want to know, from a borrowing appetite perspective, how are you seeing it?

Chiro Ghosh: You clarified that except in the non-oil and gas sector, there is no asset quality concern. But I want to know from a borrowing appetite perspective, how are you seeing it? How are the economic activities basically driving that borrowing appetite on those non-oil and gas sector? Third is, both Turkey and Egypt, how high is your currency risk basically? These are my three questions.

Speaker #4: How are the economic activities basically driving that borrowing appetite in the non-oil and gas sector? And third, for both Turkey and Egypt, how high is your currency risk basically?

Speaker #4: So these are my three questions.

Speaker #2: Thank you, Jiro. So in terms of Egypt, we did not put out the page that we usually reserve for Egypt back on Thursday because Thursday was a holiday in Egypt, and their profitability—they could only disclose it on Sunday morning.

Durraiz Khan: Thank you, Chiro. In terms of Egypt, we did not put out the page that we usually reserve for Egypt back on Thursday, because Thursday was a holiday in Egypt, and their profitability, they could only disclose it on Sunday morning. So we replaced the full presentation, and if you go down to Egypt, to our presentation, you will see the Egyptian numbers are there. It is just we were under regulatory embargo, and this was lifted on Sunday. Profitability, local currency, constant currency terms, up 24% to 25% year on year September. Total assets, dollar terms up 19%, local currency terms up 29%. Total loans up 16%. So exceptionally strong performance coming in from Egypt. It is one of our key highest risk-adjusted or ROE franchises that continues to remain there. For the full year guidance for Egypt, they have slightly upgraded profitability.

Speaker #2: So we replaced the full presentation, and if you go now to Egypt, you to our presentation, you'll see the Egyptian numbers are there. It's just that we were under a regulatory embargo, and it was just lifted on Sunday.

Speaker #2: Profitability local currency foreign currency terms up 24, 25% year on year September. Total assets dollar terms up 19%. Local currency terms up 29%. Total loans up 16%.

Durraiz Khan: Profitability, local currency, constant currency terms, up 24% to 25% year on year September. Total assets, dollar terms up 19%, local currency terms up 29%. Total loans up 16%. So exceptionally strong performance coming in from Egypt. It is one of our key highest risk-adjusted or ROE franchises that continues to remain there. For the full year guidance for Egypt, they have slightly upgraded profitability.

Speaker #2: So, exceptionally strong performance coming in from Egypt. It is one of our key, highest risk-adjusted ROE franchises that continues to remain there.

Speaker #2: For the full year guidance for Egypt, they have slightly upgraded. Profitability is expected to be 22% to 24% for the full year, compared to 19% to 21% back in Q2.

Durraiz Khan: They expect 22% to 24% for the full year, compared to 19% to 21% back in Q2. Loans, 24% to 26%. Deposit, similar. Total assets, similar. So it is one of our very strong franchises. In terms of borrowing appetite in Qatar, total loans in Qatar are up 3% for us. Again, it is business as usual borrowing. Because of the slowdown, we are not seeing very large transactions, but what we see is underlying growth in borrowing in terms of various sectors, that is happening. In terms of currency risk in both of these markets, underlying currency risk in both of these markets is effectively the original investments that we have done in these franchises, because that cannot be hedged away. Those respective franchises ensure that their currency risk, whether on the positive or negative side, remains as close to zero as possible.

Speaker #2: Loans are at 24% to 26%. Deposits are similar, and total assets are similar. So it's one of our very strong franchises. In terms of borrowing appetite in Qatar, total loans in Qatar are up 3% for us.

Speaker #2: Again, it's business as usual borrowing because of the slowdown. We are not seeing very large transactions, but what we see is underlying growth in borrowing in terms of various sectors.

Durraiz Khan: Because of the slowdown, we are not seeing very large transactions, but what we see is underlying growth in borrowing in terms of various sectors, that is happening. In terms of currency risk in both of these markets, underlying currency risk in both of these markets is effectively the original investments that we have done in these franchises, because that cannot be hedged away. Those respective franchises ensure that their currency risk, whether on the positive or negative side, remains as close to zero as possible.

Speaker #2: That is happening. And in terms of currency risk, in both of these markets, the underlying currency risk is effectively related to the original investments that we have made in these franchises.

Speaker #2: Because that cannot be hedged away. Those respective franchises ensure that their currency risk, whether on the positive or negative side, remains as close to zero as possible.

Speaker #4: Okay, that's all from our side. Just one quick question: Is the M&A chapter closed, or is the bank still looking out for M&A activities?

Chiro Ghosh: Okay, that is all from my side. Just one quickly. Is M&A chapter closed or the bank is still in lookout for M&A activities?

Speaker #2: There's nothing that we are looking at at this point in time. Nothing further to add.

Durraiz Khan: There is nothing that we are looking at this point in time. Nothing further to add.

Speaker #4: That's all from my side. Thank you.

Chiro Ghosh: That is all from my side. Thank you.

Speaker #3: Thank you. Our next question comes from Laura Kamaraja. Please unmute your line to ask your question. Laura, you are unmuted. Please go ahead.

Operator: Thank you. Our next question comes from Varuna Kamarajah. Please unmute your line to ask your question. Varuna, you are unmuted. Please go ahead.

Operator: Thank you. Our next question comes from [Varuna Kamarajah]. Please unmute your line to ask your question. Varuna, you are unmuted. Please go ahead.

Speaker #5: Hello. Hi. Am I audible?

Varuna Kamarajah: Hello? Hi, am I audible?

[Analyst 1]: Hello? Hi, am I audible?

Speaker #2: Yes.

Durraiz Khan: Yes.

Speaker #5: Yeah. Hi, Grace. Hi. Thank you very much. I have a couple of questions. The first one is on the guidance—I'm sorry, I joined a bit late.

Varuna Kamarajah: Yeah. Hi, Dhiren. Thank you very much. I have a couple of questions. The first one is on the guidance. Sorry, I joined a bit late. I just want to know if you could reiterate, if you have mentioned the guidance, if there is any change in terms of the key line items.

[Analyst 1]: Yeah. Hi, Durraiz. Thank you very much. I have a couple of questions. The first one is on the guidance. Sorry, I joined a bit late. I just want to know if you could reiterate, if you have mentioned the guidance, if there is any change in terms of the key line items.

Speaker #5: I just want to know if you could, you know, reiterate—I mean, if you have mentioned the guidance—if there is any change in terms of the key line items.

Speaker #2: Yes, Laura. We will reiterate the guidance. We have slightly adjusted downwards for key items by approximately 1% on both sides. Profit is now 4% to 6%.

Durraiz Khan: Yes, Varuna, we will reiterate the guidance. We have slightly adjusted downwards for key items by approximately 1% on both sides. Profit is now 4% to 6%. Total loans are now 5% to 7%. Total deposits are now 3% to 4%. Total assets are now 5% to 7%. Guidance which has not changed is the cost of risk and the NIM. We expect it similar, 70 to 75 basis points in terms of cost of risk, and NIM will be 260 to 265 basis points.

Speaker #2: Total loans are now 5% to 7%. Total deposits are now 3% to 4%. Total assets are now 5% to 7%. Guidance, which has not changed, is the cost of risk and the name.

Speaker #2: We expect it to be similar, with 7 to 75 basis points in terms of cost of risk, and NIM will be 260 to 265 basis points.

Varuna Kamarajah: Okay. Thank you. Going back to the loan growth so far and going forward, am I right in interpreting that by looking at segmental information, the Qatari loan growth is kind of muted this year, YTD, and do you expect this to recover somewhat in Q4?

[Analyst 1]: Okay. Thank you. Going back to the loan growth so far and going forward, am I right in interpreting that by looking at segmental information, the Qatari loan growth is kind of muted this year, YTD, and do you expect this to recover somewhat in Q4?

Speaker #5: Okay, thank you. And going back to the loan growth so far and going forward, am I right in interpreting that, by looking at segmental information, the Qatari loan growth is kind of muted this year?

Speaker #5: Year-to-date, do you expect this to recover somewhat in the fourth quarter?

Speaker #2: We don't expect any significant change between now and December for the Qatari loan book, because as we are aware, due to the geopolitical uncertainties, it would grow, but within the 2% to 3% range.

Durraiz Khan: We don't expect any significant change between now and December for the Qatari loan book, because as we are aware, because of the geopolitical uncertainties, it would grow, but between 2% to 3% range. Primary growth in our loan book is going to come from our international operations, particularly for the first time in many years, we are growing our loan book in London, Paris, and our other Hong Kong and Singapore branches. Of course, our two key franchises in both Turkey and Egypt are increasing their balance sheet growth, is much faster than what's appearing on the Qatari side.

Speaker #2: Primary growth in our loan book is going to come from our international operations, particularly, for the first time in many years, we are growing our loan book in London, Paris, and our other Hong Kong and Singapore branches.

Durraiz Khan: Primary growth in our loan book is going to come from our international operations, particularly for the first time in many years, we are growing our loan book in London, Paris, and our other Hong Kong and Singapore branches. Of course, our two key franchises in both Turkey and Egypt are increasing their balance sheet growth, is much faster than what's appearing on the Qatari side.

Speaker #2: And, of course, our two key franchises in both Turkey and Egypt are increasing their balance sheet growth. It's much faster than what's appearing on the Qatari side.

Varuna Kamarajah: Okay. All right. Thank you, Dhiren.

[Analyst 1]: Okay. All right. Thank you, Durraiz.

Speaker #5: Okay. All right. Thank you. Thank you, Grace.

Durraiz Khan: No problem.

Speaker #3: As a reminder, if you'd like to ask a question, please use the Raise Hand button at the bottom of your Zoom screen. Our next question comes from John Peace.

Operator: As a reminder, if you would like to ask a question, please use the raise hand button at the bottom of your Zoom screen. Our next question comes from Jon Peace. Please unmute to ask your question.

Speaker #3: Please unmute to ask your question.

Speaker #4: Oh, hi. Thanks for taking the question. I think I got all of your guidance down, but I missed the guidance for Turkey. Please, in local currency terms, if you could just give that.

Jon Peace: Oh, hi. Thanks for taking the question. I think I got all of your guidance down, but I missed the guidance for Turkey, please, in local currency terms, if you could just give that. Thank you.

Speaker #4: Thank you.

Speaker #5: Yes, John. The guidance

Durraiz Khan: Yes, Jon, the guidance for Turkey is profitability 10% to 15% up, loans 30% to 35%, deposit 25% to 30%, and total assets 25% to 30%.

Speaker #2: for Turkey is profitability 10 to 15% up. Loans 30 to 35%. Deposit 25 to 30% and total assets 25 to 30%.

Speaker #4: Perfect. Thank you.

Jon Peace: Perfect. Thank you.

Speaker #3: Our next question comes from Shulk Alshorani. Please unmute to ask your question.

Operator: Our next question comes from Shulk Al-Sharani. Please unmute to ask your question.

Speaker #6: Hi, thank you for the call. I just want to hear your thoughts about the outlook for the cost of funding. You talked about an increase due to forward-looking to the curve, but how do you see that in terms of further increases and managing that cost of funding? And how do you see that directionally impacting the NIMs?

Shulk Al-Sharani: Hi, thank you for the call. Just want to hear your thoughts about the outlook for cost of funding. You talked about basically an increase due to basically forward looking to the curve. How do you see that in terms of, I would say, further increase, managing that cost of funding? How do you see that directionally impacting the NIMs? If you looked at Q4 and quarter-over-quarter, if I'm getting it right, it's going to be slightly lower to achieve the full year guidance. From that, the exit NIM, when you're looking at next year outlook, the positioning of the balance sheet is more basically toward will be negatively or positively positioned for the outlook for the rate. I want to hear your thoughts around it.

[Analyst 2]: Hi, thank you for the call. Just want to hear your thoughts about the outlook for cost of funding. You talked about basically an increase due to basically forward looking to the curve. How do you see that in terms of, I would say, further increase, managing that cost of funding? How do you see that directionally impacting the NIMs?

Speaker #6: So if you looked at Q4 and Q over Q, if I'm getting it right, it's going to be slightly lower to achieve the full-year guidance.

[Analyst 2]: If you looked at Q4 and quarter-over-quarter, if I'm getting it right, it's going to be slightly lower to achieve the full year guidance. From that, the exit NIM, when you're looking at next year outlook, the positioning of the balance sheet is more basically toward will be negatively or positively positioned for the outlook for the rate. I want to hear your thoughts around it.

Speaker #6: And from that, the exit NIM, were you looking at next year outlook, the positioning of the balance sheet is more, basically, toward—will it be negatively or positively positioned for the outlook for the rate?

Speaker #6: I want to hear your thoughts around it.

Durraiz Khan: In terms of how our NIM works,

Speaker #2: So, in terms of how our NIM works—what, as we explained earlier, is basically, on our asset side, we have the majority of our loans, almost more than two-thirds, in dollars, and then primarily linked to what we call SOFR, term SOFR.

Durraiz Khan: In terms of how our NIM works,

Shulk Al-Sharani: Yes

[Analyst 2]: Yes

Durraiz Khan: as we explained earlier, it was basically on our asset side, we have majority of our loans, almost more than two-thirds in dollars, and then primarily linked to what we call SOFR, term SOFR. A lot of them have lumpy repricing in Q1 and Q3 of the year, where it's not that everything reprices there, but a lot of big chunks of loans reprice at that time. What happened in Q3 was it was widely expected that the rates are expected to go up. As and when we are trying to book a lock-in 6 months money, we have to slightly pay up based on the forward rate guidance. That is what slightly negatively impacted our margins this quarter.

Speaker #2: And a lot of them have lumpy repricing in Q1 and Q3 of the year, where it's not that everything reprices then, but a lot of big chunks of loans reprice at that time.

Speaker #2: So, what happened in Q3 was that it was widely expected that the rates would go up. And as and when we are trying to book and lock in six months' money, we have to slightly pay up based on the forward guidance.

Durraiz Khan: What happened in Q3 was it was widely expected that the rates are expected to go up. As and when we are trying to book a lock-in 6 months money, we have to slightly pay up based on the forward rate guidance. That is what slightly negatively impacted our margins this quarter.

Speaker #2: That is what slightly negatively impacted our margins this quarter. Again, we don't have the crystal ball, but it is likely that interest rates are going to go up one more time before this year ends.

Durraiz Khan: Again, we do not have the crystal ball, but it is likely that interest rates are going to go up one more time before this year, and that may again slightly impact our total NIM that might come at that lower end of the range that we are talking about between 260 to 265 basis points. Having said it, in terms of our balance sheet, back in Q1, when the repricing hits on the asset side, we will have a benefit of basically making sure that whatever we have lost in Q3 and Q4, we will make up for that in Q1. I will not be able to give you a full year outlook for the year 2027 at this point in time. That will be part of our Q4 call.

Speaker #2: And that may again slightly impact our total NIM, which might come at the lower end of the range that we're talking about—between 260 to 265 basis points.

Speaker #2: Having said that, in terms of our balance sheet, back in Q1, when the repricing hits on the asset side, we will have the benefit of basically making sure that whatever we have lost in Q3 and Q4, we will make up for that in Q1.

Durraiz Khan: Having said it, in terms of our balance sheet, back in Q1, when the repricing hits on the asset side, we will have a benefit of basically making sure that whatever we have lost in Q3 and Q4, we will make up for that in Q1. I will not be able to give you a full year outlook for the year 2027 at this point in time. That will be part of our Q4 call.

Speaker #2: So I don't have—I will not be able to give you fully an outlook for the year 2027 at this point in time. That will be part of our Q4 call.

Speaker #2: But the way we have managed our balance sheet is, because of the way our balance sheet is structured, our deposits are primarily time deposits.

Durraiz Khan: But the way we have managed our balance sheet is, because of the way our balance sheet is structured, our deposits are primarily term deposits, and our loans have a significant amount of floating rate loans which reprice every six to nine months. We will be in similar NIM ranges after the repricing has happened.

Speaker #2: And our loans have a significant amount of floating-rate loans, which reprice every six to nine months. We will be in similar NIM ranges.

Speaker #2: After the repricing has happened.

Shulk Al-Sharani: Got it. Very clear. Just one follow-up point on the hyperinflation. You said if inflation maintained as it is for Q3 going into Q4, you still have a slightly higher charge of hyperinflation because of higher equity. Is that what you mentioned?

[Analyst 2]: Got it. Very clear. Just one follow-up point on the hyperinflation. You said if inflation maintained as it is for Q3 going into Q4, you still have a slightly higher charge of hyperinflation because of higher equity. Is that what you mentioned?

Speaker #6: Got it. Got it. Very clear. And just one follow-up point on the hyperinflation. You said that if inflation is maintained as it is for Q3 going into Q4, you still have a slightly higher charge of hyperinflation because of higher equity.

Speaker #6: Is that what you mentioned?

Speaker #2: Yes, because it's a function of net monetary position into the inflation rate. Because of profitability in the franchise, as profit increases, even if the inflation rate remains the same, you will have a slightly higher hyperinflation charge.

Durraiz Khan: Yes. Because it is a function of net monetary position into inflation rate. Because of profitability in the franchise as profit increases, even if inflation rate remains the same, you will have a slightly higher inflation charge.

Shulk Al-Sharani: Got it. Thank you so much. Very clear.

[Analyst 2]: Got it. Thank you so much. Very clear.

Speaker #6: Got it. Got it. Thank you so much. Very clear.

Speaker #3: Thank you. Our next question comes from Fatima Al-Hashani. Please unmute to ask your question.

Operator: Thank you. Our next question comes from Fatima Alhashami. Please unmute to ask your question.

Fatima Alhashami: Hello. Thank you for taking my question. Could you shed some light on your interest rate sensitivity? For every 25 basis points rate hike, how would it impact the NIM? Is my understanding correct that the impact of the latest rate hike would only be seen in Q1 of 2027?

[Analyst 3]: Hello. Thank you for taking my question. Could you shed some light on your interest rate sensitivity? For every 25 basis points rate hike, how would it impact the NIM? Is my understanding correct that the impact of the latest rate hike would only be seen in Q1 of 2027?

Speaker #7: Hello, thank you for taking my question. Could you shed some light on your interest rate sensitivity for every 25 basis point rate hike? How would it impact the NIMs?

Speaker #7: And also, is my understanding correct that the impact of the latest rate hike would only be seen in Q1 of 2027?

Durraiz Khan: Our interest rate sensitivity that we provided for the full year is approximately 100 basis points increase in interest rates would give between 600 to 800 million of increase in total net interest income. That is a fuller impact. What we are saying is that the September rate hike, which has happened, the asset side impact will come in back in Q1.

Speaker #2: So our interest rate sensitivity that we provided for the full year is: approximately a 100 basis points increase in interest rates would give between $600 million to $800 million of increase in total net interest income.

Speaker #2: That's a fuller impact. And what we are saying is that the September rate hike, which has happened, the asset side impact will come back in Q1.

Fatima Alhashami: All right. All clear. Thank you.

[Analyst 3]: All right. All clear. Thank you.

Speaker #7: All right. Awesome. Thank you.

Operator: Our next question comes from Murad Ansari. Please unmute to ask your question.

Speaker #3: Our next question comes from Murad Ansari. Please unmute to ask your question.

Speaker #4: Yes. Hi. Sorry. Just a follow up two follow up questions. Just the first one on on coverage. So, you know, you tend to operate very high level of coverage close to 100%.

Murad Ansari: Yes. Hi. Sorry, just two follow-up questions. The first one on coverage. You tend to operate very high level of coverage, close to 100%. Even though it is still quite high, it has slipped a little bit from where you have operated historically. Should we expect this to, by the end of the year, that it will be back to closer to 100% on NPL coverage? Secondly, on the central bank relaxations on classifications and fundings, et cetera, that were announced in March. Have all those kind of run out? You mentioned in Q2 there was hardly any impact, very small amount. Just wanted to confirm, is there any update to what has happened with the funding?

Speaker #4: And even though it's it's a still quite high, it's slipped a little bit from where you've operated historically. So should we expect this to by the end of the year that we'll be back to closer to 100%?

Murad Ansari: Should we expect this to, by the end of the year, that it will be back to closer to 100% on NPL coverage? Secondly, on the central bank relaxations on classifications and fundings, et cetera, that were announced in March. Have all those kind of run out? You mentioned in Q2 there was hardly any impact, very small amount. Just wanted to confirm, is there any update to what has happened with the funding?

Speaker #4: On NPL coverage, and secondly, on the central bank relaxations on classifications and fundings, etc., that were announced in March, have all those kind of run out?

Speaker #4: Has there been, you know, you mentioned in the second quarter, there was hardly any impact, a very small amount. Just wanted to confirm if there's any update to what's happened with it?

Speaker #4: Thank ank you.

Speaker #2: See, in terms of coverage, yes, it has slightly come down, but for December, we expect it would be between—we are at roughly 97%.

Durraiz Khan: In terms of coverage, yes, it has slightly gone down, but for December we expect it would be between, we are at 97% now. We expect it would be between 95% to 100% coverage ratio. In terms of central bank relaxation measures, the circular expired at the end of September, and a new circular has not been issued. The total loans which were outstanding, total amount of loans under these relaxation measures, they were approximately seven to eight customers, and the total amount of loans was QAR 1.34 billion. So it is an extremely small number.

Speaker #2: Now, we expect it will be between 95% to 100% coverage ratio. In terms of central bank relaxation measures, the circular expired at the end of September and a new circular has not been issued.

Speaker #2: The total loans which were outstanding—the total amount of loans under these relaxation measures—were approximately seven to eight customers, and the total amount of loans was 1.34 billion riyals.

Speaker #2: So, it's an extremely small number.

Speaker #4: Yeah, and sorry, just one last follow-up on the other provisions that you've made, that you highlighted about LCs and LGs. So we've seen two quarters of elevated numbers.

Murad Ansari: Yeah. Sorry, just last follow-up on the other provisions that you highlighted about LCs and LGs. We have seen two quarters of elevated numbers. Has that now largely been dealt with, or could we see some of that spilling over into Q4 as well?

Speaker #4: Has that now largely been dealt with, or could we see some of that spilling over into the fourth quarter as well?

Durraiz Khan: For that particular customers which have been classified, have been dealt with. Again, I do not have a crystal ball. If there is any other customer,

Speaker #2: For those particular customers which have been classified, they have been dealt with. Again, I don't have a crystal ball if there's any other customer which has LC or LG exposure.

Murad Ansari: Sure

Durraiz Khan: which has LC or LG exposure, again, it might come in again. But for those particular customers, have been dealt with.

Speaker #2: Again, it might come in again, but for those particular customers, it has been dealt with.

Speaker #4: All right. Thank you so much.

Murad Ansari: All right. Thank you so much.

Speaker #3: The next question comes from Mahmoud Rajan. Please unmute to ask your question.

Operator: The next question comes from Rahul Rajan. Please unmute to ask your question.

Speaker #5: Thank you. I have a couple of follow-up questions, please. Firstly, you mentioned international loan growth being strong, especially in London, Paris, etc.

Rahul Rajan: Thank you. A couple of follow-ups, please. Firstly is, you mentioned international loan growth being strong, especially in London, Paris, et cetera. So what is driving this loan growth? What is the nature of these loans? How are these customers different from the earlier customers that you used to have or some of your even local Qatari customers? That is number one. Secondly, is on the buyback. We see that, I think it is north of 85% being completed. How do you see the completion of the current one and a potentially new buyback program? Do you think that is something which the management is likely to propose? Thank you.

Speaker #5: So, what's driving this loan growth? What's the nature of these loans? How are these customers different from the earlier customers you used to have, or even some of your local Qatari customers?

Speaker #5: So that's number one. Secondly, on the buyback, we see that I think it's north of 85% being completed. How do you see, you know, the completion of the current one and a potentially new buyback program?

Rahul Rajan: That is number one. Secondly, is on the buyback. We see that, I think it is north of 85% being completed. How do you see the completion of the current one and a potentially new buyback program? Do you think that is something which the management is likely to propose? Thank you.

Speaker #5: Do you think that's something which the management is likely to propose? Thank you.

Speaker #2: Mostly in London and Paris, as we are building the capabilities. At this point in time, our participation is limited to local syndications. If any major syndication is happening in those markets, we try to participate with whatever small numbers that we bring in, and scale in gradually.

Durraiz Khan: Mostly in London and Paris, as we are building the capabilities, at this point in time, our participation is limited to local syndications. If any major syndication is happening in those markets, we try to participate, whatever small numbers that we bring in and slowly and gradually, we build our independent underwriting capabilities. In terms of buyback, we are QAR 2.5 billion out of QAR 2.9 billion. As we inch closer to that program, we will go back to the board and give our feedback and recommend another program. Again, decision rests with the board, but that is the plan as of now.

Speaker #2: We build our independent underwriting capabilities. In terms of buyback, we are at $2.5 billion out of $2.9 billion as we inch closer to the program.

Durraiz Khan: In terms of buyback, we are QAR 2.5 billion out of QAR 2.9 billion. As we inch closer to that program, we will go back to the board and give our feedback and recommend another program. Again, decision rests with the board, but that is the plan as of now.

Speaker #2: We will go back to the board and give our feedback and recommend another program. Again, the decision lies with the board, but that is the plan as of now.

Speaker #5: Got it. So on on the first question, please. So when you mentioned you participate as syndication, so are these then is it fair to assume that these are local European based consumers and therefore completely unrelated to your current Qatari customer base or how should we see them?

Rahul Rajan: Got it. On the first question, please. So when you mention you participate as syndication, is it fair to assume that these are local European-based consumers and therefore completely unrelated to your current Qatari customer base, or how should we see them?

Speaker #2: Yes, these are unrelated to our local customer base at this point in time.

Durraiz Khan: Yes. These are unrelated to our local customer base at this point in time.

Speaker #5: Got it. Thank you.

Rahul Rajan: Correct. Thank you.

Speaker #3: Next question is from Mohamed Al-Atiyah. Please unmute to ask your question.

Operator: Next question is from Mohammed Al Attiya. Please unmute to ask your question.

Mohammed Al Attiya: Hi. I wanted to ask regarding the distribution of the dividends this year, and what is expected for next year?

[Analyst 4]: Hi. I wanted to ask regarding the distribution of the dividends this year, and what is expected for next year?

Speaker #4: Hi, I wanted to ask regarding the distribution of dividends: this year and what's expected for next year?

Speaker #2: Hi, Mohamed. We expect a 35 to 40% payout ratio for this year, which will be paid out sometime in February next year. There is no change in policy.

Durraiz Khan: Hi, Mohammed. We expect 35% to 40% payout ratio for this year, which would be paid down sometime February next year. No change in policy.

Speaker #4: Thank you.

Mohammed Al Attiya: Thank you.

[Analyst 4]: Thank you.

Speaker #3: Our next question is from Amin Nasir. Please unmute to ask your question.

Operator: Our next question is from Amen Nasser. Please unmute to ask your question.

Amen Nasser: Just to clarify on the dividend payout. Are we paying out that dividend in October this month, which is the second part, or are we not paying a dividend?

[Analyst 5]: Just to clarify on the dividend payout. Are we paying out that dividend in October this month, which is the second part, or are we not paying a dividend?

Speaker #4: Just to clarify on the dividend payout. Are we paying out the dividend in October this month, which is the second part, or are we not paying a dividend?

Speaker #2: We will be paying the we expect to pay the full year dividend in when we do the Q4 announcement and the payment will be done.

Durraiz Khan: We expect to pay the full-year dividend when we do the Q4 announcement, and the payment will be done after our AGM, which is usually held in February.

Speaker #2: After our AGM, which is usually held in February.

Speaker #4: So, there are no dividend payments this year?

Amen Nasser: There is no dividend payments this year?

[Analyst 5]: There is no dividend payments this year?

Speaker #2: No, we don't have any interim payment for this year. We are going back to the annual dividend payment.

Durraiz Khan: No. We do not have any interim payment for this year. We are going back to the annual dividend payment.

Speaker #4: And the plan for next year is going to be one annual dividend payment also. That's it.

Amen Nasser: The plan for next year is going to be one annual dividend payment also at this.

[Analyst 5]: The plan for next year is going to be one annual dividend payment also at this.

Speaker #2: Yes.

Speaker #4: Thank you so much.

Durraiz Khan: Yes.

Amen Nasser: Thank you so much.

[Analyst 5]: Thank you so much.

Speaker #3: Thank you. Our next question comes from Rob Runak. Kamarage, please unmute to ask your question.

Operator: Thank you. Our next question comes from Varuna Kamarajah. Please unmute to ask your question.

Speaker #2: Yes, and just to reiterate, the dividend payment decision is with the Board.

Durraiz Khan: Yes. Just to reiterate, the dividend payment decision rests with the board.

Varuna Kamarajah: Hi. Dures, I have just one follow-up question regarding the fee and commission income. Nothing in touch base upon that. It is a very strong growth that we have seen in the past, especially in the last two quarters. Can we expect this momentum to continue even into Q4?

[Analyst 1]: Hi. Dures, I have just one follow-up question regarding the fee and commission income. Nothing in touch base upon that. It is a very strong growth that we have seen in the past, especially in the last two quarters. Can we expect this momentum to continue even into Q4?

Speaker #6: Hi. I have just one follow up question. Regarding the PN commission income and I think you touched base upon that. So it's a very strong growth that we have seen in the past, especially in the last two quarters.

Speaker #6: So, do you—I mean, can we expect this momentum to continue even into the fourth quarter?

Speaker #2: This is coming principally from our franchises in Turkey and Egypt, and we are not aware of any one-offs in those quarters. They are elements of cyclicality.

Durraiz Khan: This is coming principally from our franchises in Turkey and Egypt, and we are not aware of any one-offs in those quarters. There are elements of cyclicality in those, but we are not aware of any one-offs. We expect them to continue to go at the same rate as for the YTD rate, not particularly a quarter, but whatever they have grown in YTD, they would continue with that.

Speaker #2: In those, but we're not aware of any one-offs, so we expect them to continue to go at the same rate as for the YTD rate—not particularly a quarter, but whatever they have grown in YTD, they would continue with that.

Speaker #6: Okay, great. Thanks a lot, and all the best.

Varuna Kamarajah: Okay, great. Thanks a lot, and all the best.

[Analyst 1]: Okay, great. Thanks a lot, and all the best.

Speaker #3: Thank you. This concludes the Q&A. Thank you for your participation. Ana, I will hand it back to the management team for closing remarks.

Operator: Thank you. This concludes the Q&A. Thank you for your participation. I will now hand back to the management team for closing remarks.

Durraiz Khan: Thank you so much for listening to our call, and we will get back to you with our Q4 results. Thank you so much.

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