The Commercial Bank (CBQK) investor relations material

Executive summary

• Net profit before Pillar Two Tax reached QAR 538.3 million for Q1 2026, reflecting resilient operating performance despite higher provisions and a loss from the Turkish subsidiary due to hyperinflation.

• Net profit after Pillar Two Tax was QAR 501.4 million, down 23% year-over-year, with total assets up 12.8% to QAR 190.6 billion.

• Customer deposits increased 11.3% to QAR 85.0 billion, and loans and advances to customers rose 11.2% to QAR 105.5 billion.

• The group maintained a strong capital position, with a Capital Adequacy Ratio of 18.4% and CET1 ratio at 12.4%, supported by the successful re-issuance of USD 500 million Additional Tier 1 Capital Securities.

• Strategic focus remained on sustainable growth, digital transformation, and risk management, with continued investment in digital and AI initiatives.

Financial highlights

• Net operating income rose 7.6% year-over-year to QAR 1,216.8 million, driven by higher net interest and fee income.

• Net interest income increased 12.6% to QAR 880.4 million; net interest margin remained stable at 2.2%.

• Fee and commission income grew 16.9% to QAR 293.3 million, including one-off fees.

• Gross provisions surged 73.7% to QAR 419.8 million, with net provisions at QAR 319 million, reflecting higher ECL charges and a shift to consistent provisioning.

• Cost-to-income ratio increased to 32.3% from 31.0% year-over-year, driven by higher staff costs.

Outlook and guidance

• FY 2026 ROE target set at 9.0% (before Pillar Two), with >12.0% targeted by 2030.

• Net cost of risk guidance for 2026: 90-100 bps; normalized 70-90 bps from 2028.

• NPL ratio target below 6% for 2026, below 5% longer-term; stage three coverage ratio target above 70% by 2030.

• Cost to income ratio targeted below 30% for FY 2026; positive jaws expected from 2027 onward.

• Committed to sustainable dividends, subject to regulatory approval, and maintaining strong CET1 and CAR above regulatory minimums.