Q3 2025 Commercial Bank PSQC Earnings Call Transcript
Key Points
- The Commercial Bank (Q.S.C.) (DSMD:CBQK) has maintained a stable net interest margin (NIM) at 2.2% despite a challenging interest rate environment.
- Retail lending portfolio increased by 6%, with strong growth in personal loans, vehicle loans, mortgages, and credit cards.
- Fee revenues have increased by 6.4% year on year, driven by loan fees, brokerage, and remittance services.
- The bank's CASA deposits, which are low-cost deposits, have increased by 6.5%, helping to manage funding costs.
- The bank is focusing on digital banking and AI-related initiatives, investing in technology to enhance customer experience and operational efficiency.
- There is expected downward pressure on NIM by 10 to 15 basis points due to the lower interest rate environment.
- Other operating income has decreased due to unmaterialized rental income, reflecting a drop from QAR151 million to QAR155 million.
- The bank's interest expense has increased, particularly due to higher costs from its Turkish subsidiary.
- The FX income line remains negative, impacted by swap costs, although it is expected to stabilize.
- Stage 3 coverage ratio has decreased due to write-offs and migration to Stage 3, though it is expected to improve over time.
(technical difficulty)
So when those were written off that went off. And then we had some migration from Stage 2 to Stage 3. So when that migration happens, so what happens is that the provision level is gradually built up. So that is why you will see that although it is on the lower side, which is acknowledged, but this will steadily build forwards over the coming years. So that will continue going higher. So for example, like -- so at Q4, we were at around 53% excluding ECL.
Now we are at 56%. But at year-end, we will -- it will further increase and we'll continue building it in the right direction.
Questions & Answers
We move to the next question. We have a question from Chiro Ghosh.
This is Chiro Ghosh from SICO Bahrain. First one is related to the margin. So the net interest margin continues
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