Qatar National Bank QPSC Q2 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Aybek Islamov - HSBC, Research Division - Analyst : A couple of questions for me, please. Well, first is operating costs. You've done pretty well in the second quarter. Obviously, your revenue line was a bit under pressure. And yes, your operating cost was quite good. What are your thoughts on the operating costs for the rest of the year? How do you see them evolving? That's my first question. And I think secondly, what I wanted to ask you is the changes in regulations about funding by the Qatar Central Bank. Does it somehow impact your net interest margin sensitivity to change the interest rate going forward? And if it does, yes, in what way? So would you expect more margin compression when rates fall, for example? Durraiz Khan In terms of operating costs, absolute decline principally is happening from the devaluation in our 2 key markets. If you go back to our discussions which we're having in Q3 and Q4 when absolute operating cost significantly increased, the reason was that our 2 large subsidiaries had certain adjustments, primarily in their staff cost and other lines because of very high inflation in both markets. But since exchange rates were stable, it was resulting in a like-for-like increase also on dollar amounts. But since both of these countries have had devaluation, almost 1/5 in both of these markets, so absolute levels are coming down. We expect similar trends going forward in the second half of the year as well. In terms of Central Bank regulations, no, it doesn't change any sensitivity. As such, the only thing that Central Bank is trying to do is asking the banks to go slightly longer term to ensure that stability of the deposits, or stability of the funding in the system is more robust compared to what market thinks. And this can be demonstrated by the data. But we don't think that our sensitivity changes because of these actions.

Question: Aybek Islamov - HSBC, Research Division - Analyst : And just to clarify, on your group for Tier 1 quarterly numbers, you do not add your net income? Do you retain any in your quarterly results? Durraiz Khan Not yet. This might -- this -- we are expecting may change in 2024.