The Commercial Bank (CBQK) Q2 2025 earnings summary

Executive summary

• Net profit after Pillar Two Tax for H1 2025 was QAR 1,261.4 million, down from QAR 1,571 million in H1 2024, with a QAR 112.9 million tax charge due to new global minimum tax rules; before tax, profit was QAR 1,374.2 million.

• Total assets rose 13.2% year-over-year to QAR 182.1 billion; loans and advances increased to QAR 103.8 billion.

• Customer deposits grew 8.2% to QAR 83.5 billion; capital adequacy ratio remained strong at 17.2%.

• Board approved a share buyback plan for up to 10% of issued shares, pending regulatory approval.

• CEO Joseph Abraham announced retirement effective August 1, with Stephen Moss named as successor.

Financial highlights

• Net interest income declined 13.7% year-over-year to QAR 1,610 million, with net operating income down 9.8%; non-interest income grew 1.9%.

• Net interest margin dropped to 2.2% from 2.7%; net fee and commission income grew 5% year-over-year.

• Cost-to-income ratio increased to 30.6% from 22.9%, mainly due to higher costs and lower income, especially in Turkey.

• Net provisions fell to QAR 295.3 million from QAR 426.9 million year-over-year; recoveries were strong at QAR 127.2 million.

• Basic/diluted EPS for H1 2025 was QAR 0.32, down from QAR 0.40 in H1 2024.

Outlook and guidance

• Gross cost of risk guidance for 2025 is 115–130 bps; net cost of risk 80–100 bps, with expectations of higher provisioning in Q4 due to regulatory reviews.

• Underlying loan growth (excluding acceptances) is about 7%, with potential for further upside by year-end.

• Tax charge may be reduced if executive regulations are enacted, potentially lowering the effective tax rate to 2.5–3%.

• Strategy continuity expected post-CEO transition, with only minor adjustments anticipated.

• The Group is evaluating the impact of new IFRS standards effective from 2025 and 2026.