The Commercial Bank (CBQK) Q2 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached QAR 1,571 million, up 1.1% on a reported basis and 16.2% on a restated basis year-over-year, driven by lower costs, reduced provisions, and improved associate performance.

• Operating profit rose to QAR 1,922 million, a 0.6% increase compared to H1 2023.

• Cost-to-income ratio improved to 22.9% from 29.1% in H1 2023, mainly due to lower LTIP costs.

• Total assets increased to QAR 160.8 billion, and consolidated loan book grew by 3.4% to QAR 92.1 billion, led by government, public sector, and retail lending.

• Recognized among "Middle East's 30 Most Valuable Banks 2024" by Forbes and received multiple regional banking awards.

Financial highlights

• Net interest income was QAR 1,867 million, down 3.5% year-on-year due to higher funding costs; non-interest income fell 17.7% to QAR 626 million, mainly from reduced FX and trading income.

• Operating expenses fell 27.2% year-on-year to QAR 570.6 million, mainly due to lower LTIP costs; excluding LTIP, expenses rose 2.1%.

• Net provisions dropped 25.8% to QAR 427 million, mainly due to ECL releases and recoveries; loan coverage ratio at 110.7%.

• Customer deposits increased 1.4% to QAR 77.2 billion; total equity rose 10% to QAR 25.2 billion.

• Retail portfolio grew 14.1% to QAR 12.2 billion, now 13.3% of the loan book; retail fee revenues up 15% year-on-year.

Outlook and guidance

• Full-year loan growth guidance remains at 3%, with potential upside due to government stimulus and economic measures.

• NIM expected to be maintained at 2.7% for the remainder of 2024.

• 2024 guidance targets CET1 ratio of 12.5–13.0%, cost-to-income ratio below 21%, and ROE of 16.0–17.0%.

• Management focused on executing a five-year strategic plan, emphasizing digital innovation and client experience.

• Dividend payout policy remains at a maximum of 50% until capital targets are met; no interim dividend announced, pending changes to Articles of Association.