Earnings call transcript: QNB Q3 2025 earnings beat forecasts, stock dips

Qatar National Bank (QNB) reported its third-quarter earnings for 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $0.4521 against a forecast of $0.4503. Revenue also exceeded projections, coming in at $11.18 billion compared to the anticipated $10.7 billion. The stock currently trades at a P/E ratio of 10.6x, with analysts maintaining a strong buy consensus. Despite these positive results, QNB’s stock saw a decline of 2.16% to $18.10, reflecting broader market trends and investor concerns over future growth prospects.

InvestingPro analysis reveals 10 key investment tips for QNB, including insights about the company’s aggressive share buyback program and its 22-year track record of consistent dividend payments.

Key Takeaways

• QNB’s EPS and revenue both exceeded market expectations.
• Stock price declined by 2.16% post-earnings, closing at $18.10.
• Strong growth in digital banking initiatives across Egypt, Saudi Arabia, and Turkey.
• Upgraded loan growth guidance for 2025 to 8-10%.
• Completed a significant share buyback program.

Company Performance

QNB demonstrated robust performance in Q3 2025, with a net profit of $3.5 billion, reflecting a 1% year-on-year growth. The adjusted net profit, excluding global minimum taxes, showed a more substantial 9% increase. The bank’s operating income rose by 9% to $9.1 billion, supported by its strong presence in Qatar and expansion in international markets. The bank maintains a healthy return on equity of 14% and has achieved an 8.15% revenue growth over the last twelve months.

Financial Highlights

• Revenue: $11.18 billion, up from $10.7 billion forecasted.
• Earnings per share: $0.4521, surpassing the $0.4503 forecast.
• Total assets: $382 billion, a 9% increase year-on-year.
• Loans and advances: $275 billion, marking an 11% growth.
• Customer deposits: $264 billion, up by 6%.

Earnings vs. Forecast

QNB beat earnings expectations with an EPS of $0.4521, slightly above the forecast of $0.4503, resulting in a 0.4% earnings surprise. Revenue also surpassed predictions by 4.49%, reflecting the bank’s strong operational performance and strategic initiatives in digital banking.

Market Reaction

Despite the earnings beat, QNB’s stock fell by 2.16% to $18.10. The decline may be attributed to investor concerns over future growth amid a competitive banking environment and macroeconomic uncertainties. The stock remains within its 52-week range, with a high of $20.49 and a low of $14.82. According to InvestingPro’s Fair Value analysis, QNB currently appears undervalued, presenting a potential opportunity for value investors. The bank also offers a notable dividend yield of 3.98%, having raised its dividend for three consecutive years.

Outlook & Guidance

QNB has upgraded its loan growth guidance for 2025 to 8-10% and expects deposit growth of 5-7%. The bank anticipates profitability growth of 1-3% after considering tax impacts. These revisions indicate confidence in sustaining growth through digital banking and international expansion. With an overall Financial Health Score of 2.18 (FAIR) from InvestingPro, and analyst consensus strongly favoring a buy rating, the bank’s outlook remains positive despite near-term challenges. Get access to the comprehensive Pro Research Report for deeper insights into QNB’s growth strategy and market position.

Executive Commentary

Durraiz, a financial executive at QNB, emphasized the bank’s commitment to building profitable digital banks, stating, "We would rather focus on building good banks and making sure that we are able to demonstrate that we can build good digital profitable banks." He also noted that the benefits of current projects might be realized in the late 2020s or early 2030s.

Risks and Challenges

• Potential interest rate cuts impacting net interest margins.
• Increasing competition in digital banking from regional and international players.
• Macroeconomic uncertainties in key markets like Turkey and Egypt.
• Geopolitical risks affecting the GCC region.
• Regulatory changes in international markets.

Q&A

During the earnings call, analysts inquired about the potential impact of rate cuts on margins, the digital banking strategy in new markets, and the drivers behind loan growth in Qatar and internationally. Executives addressed concerns over provisions and non-performing loan trends, highlighting the bank’s robust risk management framework.

Full transcript - QNB (QNBK) Q3 2025:

AK Islamov, Financials Equity Research Analyst, HSBC: Good afternoon. Good morning everyone. This is AK Islamov, Financials Equity Research Analyst at HSBC. On behalf of HSBC, I’m pleased to welcome you to Qatar National Bank’s third quarter conference call presented by Mr. Ramzi Mari, Chief Financial Officer, Ms. Noor Mohammed Al-Naimi from Group Treasury and Financial Institutions, and Mr. Mark Abrahams from Group Treasury and Trading. We will start with a brief management presentation followed by a Q and A session. I would like to hand over the call to Mark Abrahams now. Mark, please go ahead.

Mark Abrahams, Group Treasury and Trading, Qatar National Bank: Thank you very much, AK Islamov and HSBC, for hosting the call today. Before we begin, it is customary to remind everyone that this call is for investors and analysts only, and media should please disconnect now. We will begin by giving a brief overview of the global and regional macroeconomic backdrop. We will then present the bank’s quarterly financial results, and finally, we will open the floor to Q&A. The global economy is set to remain resilient for the remainder of this year, slowing down a touch to grow by 3% in 2025 despite significant volatility on the back of policy uncertainties. Central banks in advanced economies have front-loaded a significant process of monetary easing, and more is expected as policy rates are taken from restrictive territory towards neutral or accommodative levels over Q4 2025 and through 2026.

Moderate oil and gas prices continue to support significant fiscal and external revenues in the GCC. This further underscores the momentum created by structural reforms and the continued expansion of international tourism. Overall, GDP growth in the GCC remains favorable, mainly based on population growth, a large pipeline of CapEx projects, energy infrastructure expansion, and robust FDI inflows. Also, for Qatar, the macro-economic environment remains upbeat with total exports of $123.2 billion and central government revenues of $57.5 billion over the last four quarters. Qatar benefits from a robust fiscal and current account position. Domestic activity has also been strong and gained further momentum with an expansion of 2.4% in GDP and 3.4% of non-hydrocarbon GDP in 2024. This was driven by dynamic sectors such as wholesale and retail trade, accommodation and food services, and financial services.

Preliminary data on Qatar GDP figures for the first half of 2025 and composite PMI survey data suggest continued strength this year, with non-hydrocarbon GDP expanding by 5.3% year on year, and PMI is comfortably at expansion territory for almost two years. Sequentially, importantly, Qatar continues to lay the foundations for GDP growth over the medium and long term through new projects on the hydrocarbon front. Tailwinds for investments in increasing gas production will drive economic growth with eight new LNG trains planned under the flagship Northfield Expansion project, one of the largest capital expenditure projects in the region and industrial engineering projects in the world. These investments, to be executed in three phases, are expected to increase Qatar’s LNG production by 85% to 142 million tons per annum by 2030.

The first production boost will come from the North Field East project by mid-2026, followed by the North Field South phase of the expansion. The North Field West phase is in its early stages with the construction likely to begin in 2027. Qatar is also ramping up efforts to diversify its non-hydrocarbon economy and increase private sector engagement. The country aims to further consolidate its position as a regional and international hub for business, investments and commerce, tourism, and culture. This accelerated the execution of Qatar National Vision 2030 and assisted in the ongoing transition towards a knowledge-based economy. The North Field Expansion project will also include an equivalent expansion of Qatar’s refining, downstream, and petrochemical capacity. Key highlights include a range of midstream projects including pipelines, LNG storage tanks, new LNG tankers, and new berths.

Downstream projects include new plants for LPG, helium, ethane cracker, the largest blue ammonia facility globally, new urea production, and other petrochemical projects. Positive spillovers from these projects will combine with diversification efforts and structural reforms to boost economic activity and spending in the broader manufacturing and service sectors. Other large non-hydrocarbon projects in the pipeline include Lusail, a $5.5 billion ambitious mixed-use development for tourism and leisure, and a new $22 billion new five-year pipeline of local infrastructure projects in various sectors. GDP growth is expected to remain strong and then accelerate in the coming years, projected at 2.4% this year, 5.2% in 2026, and 7.9% in 2027. As a result, the economic expansion continues in Qatar while the banking sector is resilient and healthy.

According to the latest available data from the Qatar Central Bank, total assets of the local banking sector are up by 5.5% year on year so far in 2025. Banks remained well capitalized with a capital adequacy ratio of 19.2%, well above Basel III guidelines. Asset quality also remained strong with NPLs at 3.9%. Overall sector profitability was solid with ROE at 14.9%. We will now move on to QNB’s financial results for the nine months ended 30th of September 2025. Key financial results are as follows. Net profit was QAR 12.8 billion, or $3.5 billion, growth of 1% compared to last year. The growth in net profit was partially impacted due to global minimum taxes effective in 2025. Excluding the impact of these taxes on a like-for-like basis, net profit is up 9%.

Robust revenue growth resulted in an increase in operating income to QAR 33.3 billion, or $9.1 billion, up 9%, demonstrating Qatar National Bank (Q.P.S.C.) Group success in maintaining growth across the full range of revenue sources. QNB’s cost to income ratio remains strong at 23.3%, which is one of the best ratios among large financial institutions in the Middle East and Africa region. Total assets are at QAR 1.389 trillion or $382 billion, up by 9% from the same period last year. Loans and advances reach QAR 1 trillion or $275 billion, up by 11%. QNB Group remains successful in attracting deposits, which resulted in an increase in customer funding by 6% from September 2024 to reach QAR 963 billion or $264 billion. The group’s regulatory loan to deposit ratio remains stable at 97%.

QNB Group’s ratio of non-performing loans to gross loans remains stable at 2.9%, reflecting the high quality of the group’s loan book and the effective management of credit risk. In addition, the coverage ratio on stage three loans remains at 100.2%. Total equity increased to QAR 121 billion, up by 7% from September 2024. The bank’s capital adequacy ratio at 19.5% is comfortably higher than both Qatar Central Bank and the latest Basel III reform requirements in relation to the bank’s buyback program. QNB has completed buyback of approximately 119.1 million shares at a cost of QAR 2.01 billion up to September 30, 2025. The buyback execution is ongoing. We would also like to bring to your attention announcements that QNB has made in the recent past in relation to its digital banking operations in various countries.

In August 2025, QNB Finansbank Turkey’s digital banking operations were spun off in a separate legal entity, Enpara. As of September 1, 2025, QNB Group has received the preliminary approval from the Central Bank of Egypt, a separate digital banking license to establish EasyBank in Egypt. On September 30, 2025, QNB Group has received a license from the Saudi Central Bank to establish EasyBank, a new digital-first bank in partnership with Ajlan & Bros Holding in the Kingdom of Saudi Arabia. These are important milestones in advancing QNB’s vision for digital transformation and innovation-driven banking while leveraging his extensive experience to support digital economies in these key markets. We will now turn to questions and answers. Thank you very much.

AK Islamov, Financials Equity Research Analyst, HSBC: Yes, thank you. Thank you for the introduction, Mark. Very helpful. We’ll start the Q and A session now. There are two ways to ask a question. First, you can raise your hand, we’ll unmute you, and you can ask your question. You can also type your question in the Q and A box and we’ll read it out for you. While we collect the questions, I think I’ll start off with my question first and I think there are two things I’d like to address. First of all, looking at your financial results, you clearly mentioned that the higher tax rate is impacting your net income growth this year. That’s very clear.

It looks like as you absorb the higher tax rate and you go into 2026, as well as your net monetary losses you’re booking from your Turkish subsidiary continue to decline, there’s a good chance that your earnings may grow in mid teens. Right. I wonder if you have any thoughts about how you plan to, whether you would be comfortable showing the mid teen earnings growth into next year or you would be paying attention to your loan loss allowances, coverage ratios, and so on and so forth. I think that that color will be extremely useful. The second part of the question is what do you think is the area that markets kind of misunderstand the most about Qatar National Bank at this point. I appreciate your intro about the projects that are happening at home, investments into midstream, downstream, and so on and so forth.

These are two opening questions. I’ll move on to the Q and A after this. Thank you.

Durraiz, Financial Executive, Qatar National Bank: Hi Abbott. This is Durraiz. In relation to your first question on next year, profitability growth at this time, the budget preparation is in progress, but as we always start off the year, our base case scenarios for profitability growth are assuming no major changes in the economic environment and no major changes, of course, in taxation. We would expect profitability growth to be in mid single digits in normal years, higher single digits in good years, and low single digits in not so good years. At this time, the preliminary analysis is we stick to what we have given you previously. Of course, in the next call in Q4, we will give you the guidance for next year.

In terms of what markets generally misunderstand or what exactly is one thing that we sometimes have to explain a lot, it is not just for Qatar National Bank (Q.P.S.C.) but for the Qatar banking sector in general. There is this perception that the loan growth is not strong, and this is something we explain all the time. Yes, maybe it’s not that strong compared to some of the neighboring countries in the GCC; it’s not as high as them. Nonetheless, banking overall loan growth in the sector post 2022 has remained decent at at least mid single digits and has continued this year as well. These are the things that generally people think, that the loan growth is not very strong, and we are at pains to highlight this point that that’s not the case.

AK Islamov, Financials Equity Research Analyst, HSBC: Thank you, that is very helpful. We’ll move on to the next questions from the audience. The first question goes to Rahul Bajaj. Rahul, please announce your name and ask your question.

Hi, Rahul Bajaj from Citi. I have three questions. Thanks for taking my questions. The first one is on margins and we are seeing sort of differentiated trend here. Turkish margins should improve as the rate cutting cycle in Turkey accelerates over the next 6 to 12 months, whereas in the local economy in Qatar we are probably at the start of this kind of rate cutting cycle. We’ve seen first cuts in September and that might progress as well over the next few quarters. My question is how should I think about the group level margins in this scenario where you have two opposing forces playing out from a margin perspective? That’s my first question. My second question is on loan growth. You mentioned strong loan growth and I see third quarter has been particularly strong.

Can you help us understand what are the drivers for this loan growth, especially in the domestic business? I was looking at the mix of the loan growth and it looks like very strong consumer loan growth actually in the last few quarters, including third quarter. What consumer products are really driving loans in Qatar if I think about it from a loan growth perspective? My third and final question, if I may please, is on the NPL balance. I see a sizable, almost like 7% quarter-on-quarter increase in the NPL balance during Q3. What is driving that? Is this just usual sort of QNB procedure to downgrade certain accounts so that you can take more provisions against them, or is there anything else going on there? Thank you.

Durraiz, Financial Executive, Qatar National Bank: Thank you, Rahul. We take step by step in terms of margins. Yes, you’re right that in Turkey we are at the start of a rate cutting cycle which will help us in margins. It’s just that with the latest CPI print coming in from Turkey, our view as to whether it would be accelerated or not is kind of not very certain at this point in time. Yes, the rate cutting cycle will happen, but our view is it’s going to take a longer time for that to materialize. Having said that, the U.S. Fed rate cutting cycle, as long as what markets are expecting about two further meetings now in this year and then two meetings in the first quarter of the year, they expect 25 basis points of both of these things.

The way, excluding Turkey, it would work is we would have immediate benefit when the rate cut happens in the immediate quarter because we are able to reprice our liabilities, and slowly and gradually then within six to nine months’ time, assets also reprice. After everything is said and done, we eventually settle back to very close to the number that we started the cycle with. There might be quarter on quarter volatility, but that’s how it would work. In terms of Turkey, depending on how accelerated or slow the rate cutting cycle is, it’s going to benefit the margin marginally. Also keep in mind the contribution of Turkey in the wider group. Yes, it impacts at the margins, but it is not the core driver for any major NIM expansion. In terms of your second question of loan growth, what are the sectors that are driving?

Again, it’s quite broad based, and what is the underlying driver is the spillover impact of the LNG expansion, not the core projects itself, but everything that. We listed some downstream activities, we have listed some midstream activities, and any construction activities pertaining to those things is something which is driving the LNG, the overall loan growth in the domestic economy. In terms of personal, if you are referring to the Qatar Central Bank data, there’s a difference between personal and consumer. What we internally do, personal includes loans to high net worth individuals in their own name, whereas consumers are only loans given to which are repaid by the salary. There are different segments. Personal goes up and down depending on how the economy performs and how people are borrowing.

Consumer is more, the growth is more regulatory driven as to why the population increase results in increase in consumer loans. In terms of NPLs, one thing particularly this year, the drivers for the NPL are coming in from Turkey because of extremely high interest rates in that economy for a sustained amount of time. That is something that we have to keep in mind, what is driving the NPL higher in terms of overall stock. We are trying to be extremely prudent in both provisioning and recognition to ensure that we are ahead of this problem.

There is just one final question before.

AK Islamov, Financials Equity Research Analyst, HSBC: I let you go.

Any change in the guidance for 2025 that I should note?

Durraiz, Financial Executive, Qatar National Bank: In terms of 2025 guidance, we are slightly upgrading the loan guidance from 7 to 9% to 8 to 10%. Other guidance remains the same. Deposit growth is 5 to 7%. Profitability growth is before the impact of payroll taxes 10 to 12%, and after the impact of payroll taxes 1 to 3%. The cost of risk would be between 85 to 90 basis points. The margin is going to be similar, between 260 to 265 basis points for QNB Group as a whole. The only thing that we have changed is we’ve slightly upped the loan growth guidance.

AK Islamov, Financials Equity Research Analyst, HSBC: All clear.

Thank you. Thank you, sir.

Excellent. Thank you, Rahul. We’ll move on to our next question from the line of Ciro Ghosh. Ciro, please announce yourself and ask your question.

Hi, this is Chiro Ghosh from Sicobarin. I have a couple of questions too. The first one is I still want to get a little more clarity on the margin side of it. If you can just tell us that for, say, a 25 basis point rate cut, what will be the NIM impact in Qatar versus, say, I don’t know, even a 100 basis point rate cut in Turkey, what will be the NIM impact? If you can give us some guidance on that side, it would help us better understand the impact from both the countries. That’s one. Second is the provisions are still much higher than your normalized level of, say, 60 to 80 basis points. Where do you see it? At what stage do you expect it to normalize, or will Turkey continue to, at least in the foreseeable future, be a drag on your provisioning?

The third one is you give a very strong GDP growth guidance for, say, next year and the year after that. What kind of share do you believe strategically, at least, what kind of share QNB would be able to benefit out of these strong loan growth? These are my three questions.

Durraiz, Financial Executive, Qatar National Bank: In terms of the guidance on margin we provide in our annual report, the guidance for a group wide basis is as follows. As a result of the model, if interest rates decline by about 1% on a full annualized basis, we expect that our net interest income would decline between QAR 600 million to QAR 800 million assuming we don’t take any actions. If you think of the model related guidance, that is the number that is already disclosed in our financial statements in the financial risk management section. This is for the Fed rate, dollar and real rates, which are the primary drivers of the net interest income. The operative part is assuming no management actions are taken. Of course, when interest rates happen, we can basically be much more aggressive in cutting on the deposit size, and that is what we always have tried to do.

This is not the first time we are in an interest rising or cutting cycle. We have had many of these cycles in the recent past and we try to minimize the impact of interest rate cuts on our overall net interest income by growing more on the volume side, on the loan side. In terms of the provisions, yes, it’s slightly elevated. Keep in mind Turkey is experiencing extremely high real rates in the economy and that is having the desired impact on the economy, which is slowing down till the time the rate cutting cycle, and we’ve explained earlier before that we expect that to be slower because the CPI prints are not coming as fast as they were expected. We should continue to expect elevated level of cost of risk and that is something that we cannot wish away.

In terms of GDP growth, yes, these are extremely high numbers and these are simply a function of LNG trains coming online in the respective periods.

Mark Abrahams, Group Treasury and Trading, Qatar National Bank: If.

Durraiz, Financial Executive, Qatar National Bank: If your question is how much are we going to get out of our share, I would rather say that we are actually growing at a much faster rate during the implementation phase. The GDP growth rate in the recent past has been between 2% to 3%. Our lending growth is 3 to 4 times that amount in our domestic economy. We actually benefit during the implementation phase of the projects. Of course, when they come online, it’s the simple output of the GDP equation at that time, no? Should we expect even further GDP growth? It remains to be seen. Actually, you benefit before when the money has been spent on the projects.

Thank you. This $600 to $800 million which you said, the first question, you don’t have a more updated one, right? Because over the last nine months I’m sure the bank must have done multiple measures, must have taken multiple measures.

We don’t expect it to be materially different from what has happened. As I say, even if we run it again, it would become maybe $700 million to $900 million, but it’s not going to be materially different, for we have not changed the structure of the balance sheet. The actions that we’re talking about are being more aggressive on the cost of deposits, and our Treasury does an extremely good job on pushing the clients and pushing the entire business to reduce the cost of their deposits.

Thank you very much. That’s all from my side. Very helpful.

AK Islamov, Financials Equity Research Analyst, HSBC: Thank you, Shir. Thank you, Therese. We’ll move on to our next question from the line of Olga Vasilova. Olga, please announce yourself and ask your question.

Thank you. I have several questions. One is on your digital initiatives. Can you please quantify your ambitions in digital in Saudi and in Egypt, maybe if possible as a % of P&L in the next several years? What should be your differentiating angle in Saudi? You’re not the only digital bank there. Could you please confirm if you will work in retail segments through digital platform in Saudi Arabia? That’s number one. Number two is on domestic construction real estate. Do you hear any news on state support or still nothing in Qatar? Finally, when we think about this material acceleration of domestic GDP growth in the next couple of years, which you guide outside of lending, what benefits could you see through P&L balance sheet? Is it better fees, lower provisioning due to transactional activities?

What comes to your mind, how else to benefit outside of the lending expansion? Thank you.

Durraiz, Financial Executive, Qatar National Bank: In terms of the digital initiatives that we have, the vision is to have profitable digital banks on a standalone basis in these geographies in due course. We should keep in mind that Enpara, whatever that we have today in our Turkish operations, was after years of investments in those entities. At this time, we don’t have profitability numbers because they do not impact either 2025 or 2026 for that matter. As and when we come closer to launch of these digital banks, we will be sharing more details as to how they would work and what are the impact and profitability of those banks on the bottom line. In terms of differentiating factor, again, we come with experience of having a successfully run digital bank in an emerging market, and this is something we would like to replicate. Are we going to offer to retail?

Of course, the focus will be on the retail clients. Moving to your second question of any state support, we are not aware of any such state support package. What we do understand is that on a contractor by contractor basis, these things are being resolved on a step by step level, on a contractor by contractor level. In terms of what is the differentiating factors for higher GDP growth besides the lending, as we’ve explained earlier, the GDP, higher GDP number will be the culmination of years of investment. Whatever that you see eventually is the output, all of that is helping us now in the trade income line, in the balance, in the deposits line, in the off balance sheet lines, in the FX line, and other lines. That’s what’s already helping us currently. That’s what’s driving the growth in certain periods.

Once the LNG expansion comes in, it’s going to be a different dynamic, it’s going to be higher revenues for the state, and then different dynamics will be at play. At this point in time, we are already benefiting from the expansion.

Thank you. On Enpara digital expansion, do you basically take your experience in Turkey and know-how in Turkey and replicate or copy it in Saudi Arabia and Egypt? Is that how you do it?

That is taking the know-how, taking the technical know-how and then building it up with the local knowledge. Of the local markets that are there, you cannot, they aren’t plug and play things. We need to understand the market. What are the different dynamics in those markets? In some of those markets that you rightly pointed out, there are competition which is offering a good quality product. Each market will have its own playbook as to how we’re going to work on that market. Each market will have different dynamics. Both Egypt and Turkey are extremely different in how we will look into it and how we will operate. The core technical know-how will come from the, in part of banking.

AK Islamov, Financials Equity Research Analyst, HSBC: Yeah.

The end game is to monetize it, say like your, or sell to a strategic partner. It’s not necessarily the case at this point.

Durraiz, Financial Executive, Qatar National Bank: We would rather focus on building good banks and making sure that we are able to demonstrate that we can build good digital profitable banks.

Okay. Thank you. Thank you so much.

AK Islamov, Financials Equity Research Analyst, HSBC: Thank you, Olga. Thank you, Therese. Our next question comes from the line of Vinod Surendran. Vinod, please announce yourself and ask your question.

Hello, am I audible?

Yes, yes. Hi, this is Vinod from AllianceBernstein. I had a couple of questions.

Primarily on the funding side of it, could you please let us know your funding plans on the Eurobond market.

Eurobond market and any information on.

The near term debt maturities or bonds callable in the next six months to one year and any plans to refinance them or come to the market.

With new money for senior bonds or.

Any capital instruments, whether it be Tier 2 capital instruments or AT1 capital instruments and similar.

Question for your Turkish subsidiary as well.

Your funding plans and any plans to.

Issue notes in that market as well. Thank you.

Mark Abrahams, Group Treasury and Trading, Qatar National Bank: Back to me. As you’ve seen, QNB has been fairly busy in the market over the last few months. One thing I’ve said in the past on these calls and remains the case for QNB is that we do not have a fixed funding program for the bank. We’ve always run very, very significant, ample liquidity buffers. With regard to Eurobond issuance, we are opportunistic in nature. You saw the dollar transaction we did earlier in the summer. You saw a very, very successful inaugural euro green bond that was just done fairly recently as well. We don’t have a fixed pipeline of bond issuance coming up. We have a very, very healthy liquidity position overall. The core position of QNB remains that we are opportunistic. As and when the market is conducive, whether it’s in U.S.

Dollars, other currencies, some of the niche markets as well, we remain open minded to what may make sense. That’s very much in the senior unsecured market. There are no intentions at this stage to issue other capital instruments. When it comes to, you know, Tier 2, etc., we are not looking to do anything in that space in the foreseeable future. We look at Turkey and other parts of the group as well at a very much centralized level. There’s strong oversight and alignment with them as well. We work very closely with the treasury team there. Very much like the group, they don’t have a specific requirement per se. We know the funding maturities they have coming out. Same process at the group level.

Obviously, as and when we see market opportunities, whether it’s in Turkey or for us at the group level, we then bring in our peers and then we look to see whether we can leverage off that and do something in the market. Nothing specific at this stage. Obviously, as the bank is growing, as our footprint is growing, you would expect to see continued issuance. It’s very important from our point of view that we continue to build and maintain a very strong credit curve for the group as a reference point going forwards.

Sorry, quickly, a clarification. Did you just mention that no Tier 2 capital instruments?

AK Islamov, Financials Equity Research Analyst, HSBC: 2s and AT1s in the foreseeable future?

Mark Abrahams, Group Treasury and Trading, Qatar National Bank: Correct.

AK Islamov, Financials Equity Research Analyst, HSBC: Understood. Thank you very much.

Mark Abrahams, Group Treasury and Trading, Qatar National Bank: Thank you.

AK Islamov, Financials Equity Research Analyst, HSBC: Yeah, thank you, Vinod. Moving to the next question. It’s from the line of Mohammed Rashid Anwar Mohammad. Please unmute yourself, announce yourself, and ask your question. Looks like Mohammed’s line is still on mute and we don’t hear anything from Mohammed. In the meantime, I’ll move on to the next question from the line of Dan Mikhailov. Please announce yourself and your question.

Hi, this is Rahul. Rahul from Citi.

Durraiz, Financial Executive, Qatar National Bank: I have a couple of quick follow-ups.

Questions actually, if I may. First one is on the digital bank in Egypt and Saudi Arabia. Just wanted to understand why did you choose to start the digital bank in those markets and not in Turkey, which is your home market. What is the digital banking sort of proposition in Qatar that you have? That’s my first question. The second one is on the buyback, which is probably ending by the end of the year. How do you assess the sense of success of this buyback program and what are your plans going forward? Are you planning to extend the buyback in any ways? Thank you.

Yes Rahul, in terms of digital banking in our home market, we already have the best-in-class app. However, building a standalone digital bank with the size of the population that we have in our home market, Qatar, is not justified because the scaling that we will get and the costs that are required to invest do not justify the returns. In Turkey, we already have Enpara. In Egypt, our offering was not up to the mark. That’s why we planned on this particular market, both Saudi Arabia and Egypt, because these are adjacent markets with a significant population where investment, if done right, and scaling up that investment will give you the adequate number of customers for you to make the return. That is why we have come over here in both Egypt and Saudi Arabia already.

In Turkey, we have a functioning digital bank, which is now a standalone subsidiary in Turkey. In terms of the buyback program, the buyback program is ongoing. We are almost two-thirds through our way. As we approach the end of the program, we will go back to the board and give our feedback as to how this has been received by the market, and we will then go to the board seeking their guidance on having another program in place for it to happen. Most likely, at the speed at which it is going, it might finish in Q1 of next year or towards late Q4 of this year. That depends on volumes in the market. We will basically go back to the board on the decisions of how do we proceed.

AK Islamov, Financials Equity Research Analyst, HSBC: All clear.

Thanks.

Okay, thank you. Apologies for the mix up. Next question is from the line of Dan Mikhailov. Dan, please announce yourself and ask your question. Hi, it’s Dan. Just one quick question to the management team and congratulations on the results. Not sure what the echo is. Apologies. In the first quarter 2025, you upgraded the profit before tax growth to 10% to 12%. If we look at nine month numbers versus six month numbers, there appears to be a slight year on year deceleration. We’re still good on, you know, 11%. We’re on track with guidance. Now that loan growth guidance has been upgraded as well, how much upside is there to profit before tax guidance or to profit before tax for the year? Cheers.

Durraiz, Financial Executive, Qatar National Bank: At this time, we would not be changing that guidance because, as you’ve said, the loan growth is coming back towards the end of the year. It is not going to have a meaningful impact in this year’s profitability. Of course, next year is a separate discussion.

AK Islamov, Financials Equity Research Analyst, HSBC: Super. Thank you, Therese. Thank you, Dan. The next question comes from the line of Mohammed Rashid Anwar. Mohammed, please announce yourself and ask your question.

Hello, it’s actually Salome from Bloomberg Intelligence. Shall I go with the question?

Yes, please go ahead. Yeah.

Okay, so I just have two relatively technical questions to specify the growth and liquidity. On the growth side, if you could give us some idea on the drivers from the non-Qatar resources and in the exchange rate adjusted terms, and on the liquidity side, do you have any internal limit for, let’s say, domestic loan to deposit ratio where the funding, what is the maximum level? The funding should come from the deposits. Do you have any limit for the borrowings that could be counted as a liquid source? Thank you.

Durraiz, Financial Executive, Qatar National Bank: Yes. In terms of the loan growth September versus September last year, we are approximately up close to QAR 95 billion, of which almost one third is coming from our Turkish and Egyptian operations and the rest is coming from Qatar and what we call all other international operations. The drivers in both Egypt and Turkey are respective. In Egypt, it is primarily public sector. In Turkey, it is wider loan growth. In the Turkish banking market, we are performing slightly better than the market. That’s the growth driver in these markets. In terms of are there any loan to deposit ratio restrictions? There is an advances to credit ratio which is followed by the central bank, and the maximum cap on that advances to credit ratio is 100%. The numerator is fairly straightforward. It is the loans number as per central bank calculations.

The denominator includes deposits as well as debt securities and other borrowings which have remaining maturity of above two years fully. If the remaining maturities are less than two years, there are haircuts applied, 25% and 50% for one and two years respectively. Of course, we have in the limits of making sure that we are well below 100% ratio, and basically if we approach that number, we try to look for primarily deposit growth.

Thank you.

AK Islamov, Financials Equity Research Analyst, HSBC: Thank you, Salome. We’ll move on to our next question from the line of Murad Ansari. Murad, please announce yourself and ask your question. Yes.

Hi, good afternoon. Thank you for the presentation. I just had a couple of quick questions. Just on the earlier question by Dan. I mean we look at, I think, nine months delivery, loan growth, margins, provisionings. I think all of these are more or less around the lower end of the range as far as your full year guidance is concerned. I mean just looking at loan growth, I mean if you’ve raised the guidance to about 10% but even a 10% essentially means maybe a billion kind of growth from the nine month base. Just wanted to get a sense that are you expecting fourth quarter to be slightly softer versus the first nine months too, or is it just relatively conservatism at this point on 2025 guidance? Also, same on NIM as well. You’re at the higher end of the range on a nine month basis.

You’ve mentioned that immediate impact of a rate cut tends to be positive. There seems like there is quite a bit of room on the upside in terms of what the guidance numbers are. Just wanted to get your thought on that. Secondly, just the investment income, it’s been a strong year, strong three quarters. Third quarter has been particularly higher relative to the first two. Just wanted to get an idea of what the drivers are here in this quarter. Thank you.

Durraiz, Financial Executive, Qatar National Bank: Can you just repeat which line of P&L are you talking about in the second question?

The investment income. The $247.2465 million income from investment securities for the third quarter.

Okay, so listen, let’s step by step as to why we are in terms of loan growth. Yes, we already are at very close to the guidance that we are talking about. It is just that fourth quarter tends to have certain repayments, generally speaking. This is something that we are keeping in mind. There are things in the pipeline that are expected to be repaid. That’s why we are not upping the guidance at this point in time. In terms of NIM, as we have explained at length, we are close to the guidance where we said we were. The factor which has changed recently is the higher CPI print coming in for Turkey, and that is slightly modifying the rate cut, the aspects of the rate cut cycle which Turkey will take place particularly in the fourth quarter.

These are the factors we are trying to keep in mind while we are continuing to maintain our guidance. In terms of investment income, primarily, if you look at Qatar operations, these are dividends coming in from our small equity portfolio that we hold. Again, very small portfolios are held in Egypt and Turkey as well. It is principally dividend incomes on those operations, on those investments, which are relatively smaller. It’s most likely there is slightly higher dividends coming in from certain investments. That’s what’s driving this higher investment income.

Just confirming that these are not some benefits coming out from market volatility around rates or something. These are largely equity-driven investment income that you report in this line.

Yes, I would say the market volatility would be less than 1% of what is the reported number.

All right, thank you so much.

AK Islamov, Financials Equity Research Analyst, HSBC: Thank you, Murat. Our next question comes from the Q&A box. I’ll read it out for you. It’s about Egypt. Regarding Qatar National Bank, Egypt, the bank has reported in the third quarter a cumulative EGP 813 million loss from FX trading and EGP 120 million loss on swap contracts. Could you please provide more context on what drove these losses? Were they tied to specific market movements, hedging strategies, or one-off events? The movement on the swap contracts was quite large in the third quarter alone. Can you please expand on that?

Durraiz, Financial Executive, Qatar National Bank: The numbers that we have from Egypt in terms of quarterly performance, we do not have any loss as such as it’s a Qatar National Bank (Q.P.S.C.) Group call. I don’t have the numbers exactly that you are talking about for what’s reported by Egypt. I can take a follow up and reply to ABAC and then we can get back to you on this.

AK Islamov, Financials Equity Research Analyst, HSBC: Yes. Okay, thank you, Therese. Next question is a bit repetitive. It’s again, it’s about Egypt. Loan growth outlook or loan growth this year? Could you please clarify whether this growth so far has been primarily driven by increased demand from high quality borrowers, or has there been any strategic adjustment to your lending criteria? Could you also provide some context to Egypt’s current loan approval rate relative to historical levels, and specifically how much of the total loan demand or applications have been accepted this year compared to previous years.

Durraiz, Financial Executive, Qatar National Bank: I don’t have the second part of the question on hand with us. The only thing that has slightly changed is that previously we were not focusing on public sector a lot, and this year we have started to focus on the public sector for loan growth. Again, it’s a very specific Egypt question in terms of approval rate for loan growth, and I can get the data and get back to you.

AK Islamov, Financials Equity Research Analyst, HSBC: Sounds good. Thank you, Therese. I think another question which relates to the previous one: strong, strong growth in overdrafts in Egypt, in particular in Q3. In case you have any color, do you expect this overdraft to grow further in the next few quarters? Again, very Egypt-specific question.

Durraiz, Financial Executive, Qatar National Bank: We can basically reiterate the Egypt guidance in terms of their loan growth, which they have upped in local currency terms. In June they were talking about mid-teen loan growth, whereas now for the full year they expect about 20% to 25% loan growth for the full year. They expect the loan growth or whatever loan numbers that are coming in to be higher compared to what they were talking about in June.

AK Islamov, Financials Equity Research Analyst, HSBC: Yeah, sounds good. Thank you, Therese. I think that completes our Q and A session, and I think one last point, I’d like to address one question to you. Very high level, we talked a lot at the beginning of the call about the LNG projects and how the LNG production will expand over the coming years. Quite a big boost. Now, in that context and keeping in mind the credit leverage in the Qatar economy, what do you think could be the repayments coming from the public sector? There is always that behavioral pattern when public sector repays loans, when liquidity improves versus demand. What are the chances that we may see better than trend line growth for Qatar over the next five to seven years? You know, very kind of big picture view. If you can share your thought process on this, would be great if you can.

Durraiz, Financial Executive, Qatar National Bank: We need to keep in mind as to how the expansion is happening. It’s happening in phases, which means that when the first phase is online, the second and third phase, the construction will still be going on. The CapEx demands for those things will continue to happen. Then again, third phase will come online towards 2030. Generally, when you have all of these phases, they have both DCM components, they loan components in it, and of course there are international investors who want sometimes dividends quicker as a return. We have all the international companies who are in these projects. The question of whether the country is going to benefit immediately from these projects coming in is more of a late 2020s or early 2030s question compared to 2026 or 2027 or 2028. This is simply our thought process.

Yes, country is going to benefit immediate point in time that leverage in the system would reduce. This is more probably in early 2030s.

AK Islamov, Financials Equity Research Analyst, HSBC: Understood. Clear. One last closing question if I may. Given that you’re active in the Saudi market as one of the key GCC banks in the region, how’s your appetite for the Saudi risk right now? Same unchanged or higher risk appetite compared to, let’s say, beginning of the year? If you can comment on this.

Durraiz, Financial Executive, Qatar National Bank: Our risk appetite in Saudi Arabia has not changed. We are looking at it in two aspects. One is growing our Saudi branch and basically trying to increase the deposits over there to make sure the branch is self-funded. The other aspect, as we have talked about, is we have announced that we have received a license that would require investment in the Saudi market, and that is our position on the risk appetite in the market, that yes, we are ready to invest.

AK Islamov, Financials Equity Research Analyst, HSBC: Great. Thank you very much, Durraiz. I think that concludes our conference call today. Thank you everyone for your very insightful questions and thank you the management team of Qatar National Bank for your answers and for your insights. Thank you everyone.

Durraiz, Financial Executive, Qatar National Bank: Thank you. Noor Mohammed Al-Naimi.

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