Dukhan Bank (DUBK) Q3 2024 earnings summary

Executive summary

• Net profit for the nine months ended 30 September 2024 rose by 3% year-over-year to QAR 1,141.4 million, with return on tangible equity increasing to 12.8% from 11% last year.

• Total assets reached a record QAR 116.7 billion, driven by a 9% growth in the loan book, mainly from wholesale and private banking.

• Capital adequacy ratio remained robust at 17.4%, well above the regulatory minimum of 14.3%.

• The macroeconomic environment is improving, with inflation subsiding and central bank rate cuts expected to support further growth.

• Recognized with multiple awards for retail, digital, and private banking excellence in 2024.

Financial highlights

• Net income from financing activities increased by 17% and from investing activities by 33%, resulting in a 16% rise in total income year-over-year.

• NPL ratio improved to 4.7% from 5.4% at end-2023, with Stage 3 coverage at 69% (or above 90% including collateral).

• Customer deposits grew 5% from FY 2023 to QAR 82.3 billion, funding 81% of liabilities.

• Net profit margin maintained at 2.1%; loans to deposits ratio at 101.2%.

• Net impairment loss on financing assets rose to QAR 156.6 million from QAR 50.0 million year-over-year.

Outlook and guidance

• Expecting single-digit balance sheet expansion for full year 2024, aligned with national GDP growth.

• Growth to be led by wholesale and private banking, with a continued conservative approach to provisioning.

• Targeting 100% Stage 3 coverage ratio within 12 months; no significant deterioration in asset quality anticipated.

• Net interest margin projected to expand by 12-15 basis points annually with further rate cuts.

• Board declared the first interim dividend of QR 0.08 per share, reflecting confidence in future prospects.