The Commercial Bank (CBQK) Q4 2023 earnings summary

Executive summary

• FY 2023 net profit rose 7.1% to QAR 3,010.2 million; operating income increased 3.7% to QAR 5,489.5 million.

• Results included a QAR 335.0 million non-cash net monetary loss from IAS 29 hyperinflation accounting at Alternatifbank, versus QAR 189.4 million in 2022.

• Total assets fell 2.8% to QAR 164.4 billion; loans declined 6.7% and customer deposits 8.0%.

Financial highlights

• Net interest income fell 2.4% to QAR 3,867.3 million; non-interest income rose 21.9% to QAR 1,622.2 million, mainly on higher investment income and mark-to-market gains.

• Operating expenses increased 26.6% to QAR 1,440.8 million, reflecting inflation, Turkey one-off costs and continued digital investment.

• Operating profit was QAR 4,049 million, down 2.6%; net provisions declined 27.4% to QAR 917 million.

• Q4 net profit was QAR 645 million, down 20.5% QoQ; operating income fell 4.4% QoQ to QAR 1,267 million.

• Share of associates' profit rose 32.3% to QAR 294.2 million from QAR 222.3 million.

Outlook and guidance

• 2024 guidance: CET1 11.5%-12.0%, total capital ratio 16.5%-17.0%, NPL ratio 5.4%-5.9%, and net cost of risk 120-135 bps.

• 2024 guidance includes ROE of 12.5%-13.0%, consolidated cost-to-income below 26%, and domestic cost-to-income below 21%.

• Qatar GDP growth is projected at 2.2% in 2024, including 2.4% growth in the non-hydrocarbon sector.