The Commercial Bank (CBQK) Q4 2024 earnings summary

Executive summary

• Net profit reached QAR 3,032.1 million, up 0.7% year-over-year, marking a record high despite a QAR 85.2 million loss in Turkey due to hyperinflationary accounting.

• Total assets rose 0.9% to QAR 165.8 billion; customer deposits increased 0.6% to QAR 77.0 billion.

• Dividend payout ratio increased to 40%, with a proposed QAR 0.30 per share for 2024, subject to approvals.

• Capital adequacy ratio improved to 17.2% post-dividends; total equity up 8.5% to QAR 26.5 billion.

• S&P, Fitch, and Moody's affirmed strong credit ratings with stable outlooks; received multiple awards for green finance and digital innovation.

Financial highlights

• Net interest income fell 14.2% year-over-year, impacted by higher funding costs and a QAR 260 million one-off interest reversal.

• Operating income declined 17% year-over-year; operating profit fell 18.9% to QAR 3,282.8 million.

• Cost-to-income ratio increased to 27.9% from 26.2%, mainly due to lower income from Turkey and tech investments.

• Retail lending grew 11.4% year-over-year to QAR 12.0 billion, now 13.1% of total loans.

• Net provisions reduced by 49.1% to QAR 467 million; core fee and other income rose 12.5%.

Outlook and guidance

• Loan growth expected to match or slightly exceed GDP growth (2%-2.5% in 2025); NIM guidance for 2025 is 2.4%-2.5%.

• Cost-to-income ratio expected to remain flat, with potential for small increases due to tech and staff investments.

• Gross cost of risk guided at 80-130 bps, net cost of risk at 80-100 bps for 2025.

• Return on equity target for 2025 is 12%-17%, factoring in 15% corporate tax and BEPS Pillar II impact.

• Commitment to responsible banking and sustainable financing, supporting Qatar National Vision 2030.