Qatar National Bank QPSC Q2 2024 Earnings Call Transcript

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

Question: Ashwath P. T. - Goldman Sachs Group, Inc. - Analyst : Hi. Congratulations on the results. I have two questions. The first is on the group NIMs. It's actually marginally down quarter and quarter, but mainly driven from Turkey and Egypt. So I was wondering if there was like an offset from the underlying domestic business where NIMs perhaps improved sequentially, and want to understand what were the drivers of this, whether it's more from the asset side or from the funding side? So some insight there would be great. The second question I had was more on the cost of risk. So it seems stable around 80 basis points from the first quarter and the second quarter, and the coverage ratio for the group as well remains around 100% for Stage 3, but the coverages across Turkey and Egypt have decreased. I wanted to understand whether this is more of a deliberate approach, especially in Turkey, where the coverage buffers are extremely strong? And looking forward, I want to also understand if there's room for cost of risk to be perhaps lower than the 90 basis points that you had initially mentioned for as a target for FY24. Thank you.

Question: Rahul Bajaj - Citigroup Inc. - Analyst : Yeah. Hi. Thanks for taking my questions. I have three questions, actually. The first one is on the interim dividend. So this is a new one that has come in. Just wanted to understand, is this interim dividend over and above your full year 35%, 37% payout that you do, or are you basically splitting the full year 37%, 38% -- 35%, 37% payout into two halves? So how should we look at interim dividend and the second half dividend? How should we think about that? So that's my first question. The second question is on corporate income tax. Is there any update on the corporate income tax scenario in Qatar? Last I remember, there were some talks about the implementation starting next year. But just wanted to understand, is there any update and what rate of tax are we talking about over here? That's the second one. And my third and final question. Ramzi, you mentioned about NIMs being lower in the Turkish business. How should we think about NIMs over the next couple of quarters in Turkey? If you could give us some idea about directionally which direction should NIMs go in the international Turkey business, that will be very useful. Thank you. Those are my three questions. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 09, 2024 / 9:30AM, QNBK.QA - Q2 2024 Qatar National Bank QPSC Earnings Call

Question: Rahul Bajaj - Citigroup Inc. - Analyst : Understood. Thanks, Ramzi.

Question: Chiradeep Ghosh - SICO Capital - Analyst : Hi. Chiro Ghost from SICO. Thanks for the call. So I have three quick questions. The first one is, I can see your debt has gone up in the second quarter, the wholesale funding and it has been placed more in the cash and investment book. So if you can give some guidance on what is the strategy going ahead, was it raised at the last part of the quarter so you have still not been able to place it and will place it in the lending book over the second half of the year? So just want to get a sense of the strategy. That is one. Your cost to income ratio in the second quarter has been a little weaker than what you have achieved in the past. I know it's still quite good but how should we see your cost of income ratio going ahead? That's my second question. And third one is how should we try to forecast the FX income? Because there seem to have a lot of volatility in the FX income. These are my three questions.

Question: Chiradeep Ghosh - SICO Capital - Analyst : Just from understanding, so in economy, there is a currency volatility? I mean, in usual year, so the FX income tends to be higher, right? So next year, let's assume there is a heavy volatility in Turkish lira?

Question: Chiradeep Ghosh - SICO Capital - Analyst : Okay. Okay. Okay. That's all from me. Thank you.

Question: Aybek Islamov - HSBC Holdings plc - Analyst : Yes. Thank you. Thank you for the conference call. I think I wanted to touch base with you on the overall growth environment especially in Qatar. That's one. I think secondly, given the sequential decline in margins, there's quite a few questions already been asked from this. If that pressure and margin continues, what's your plan? What's the main mitigant for this to basically deliver your guidance in the thinking growth? Is that going to be long-lost provision expenses like better for charges or more focused on cost controls? I think that color will be useful. And I think lastly, in this quarter, I can see that there is a good growth in funding, international funding. So can you comment on that as well? Thank you.

Question: Aybek Islamov - HSBC Holdings plc - Analyst : Thank you. Thank you, Ramzi.

Question: Mark Krombas - The First Investor Q.S.C. - Analyst : I wanted to get an outlook from the management on Qatar real estate and what their view is on the contractors and overall exposure to that segment, please?

Question: Mark Krombas - The First Investor Q.S.C. - Analyst : Thank you.

Question: Salome Skhirtladze - Bloomberg Intelligence - Analyst : Hello. Can you hear my voice? Hello?

Question: Salome Skhirtladze - Bloomberg Intelligence - Analyst : So thanks first of all for taking the question. You mentioned that the NIM construction could be compensated by the growth. Could you give us a bit more details? You referred to growth from Qatar market, international market, is there any progress for the Saudi expansion plans? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 09, 2024 / 9:30AM, QNBK.QA - Q2 2024 Qatar National Bank QPSC Earnings Call And another one on the real estate. The recent estate data show that there is actually some drop in the real estate market transactions and the flow of tourism. Do you think that could somehow affect the local domestic growth of lending? Thank you. Thanks.

Question: Salome Skhirtladze - Bloomberg Intelligence - Analyst : Thank you.

Question: Janany Vamadeva - Arqaam Capital Limited - Analyst : Thank you, Adam. We have a couple of questions. The first one has already been asked. It's a fully alone REIT and whether you continue to see 4% to 5% growth for full-year 2024, so I'll move on to the second one. It's from Fatema. With state recoveries at 100%, why are you not expecting provisioning to decline further in Q2? How has been the borrowing demand from North Field projects?

Question: Janany Vamadeva - Arqaam Capital Limited - Analyst : Yes, Ramzi. So given estate recoveries is already 100%, why isn't provision declining any further in Q2?

Question: Janany Vamadeva - Arqaam Capital Limited - Analyst : Thank you, Ramzi. Next question is at hyperinflation losses. Can you give guidance on hyperinflation losses expected for 2024? Also, based on current inflation data in Turkey, should we expect no hyperinflation losses in 2025?

Question: Janany Vamadeva - Arqaam Capital Limited - Analyst : Thank you, Ramzi. So the next question is on growth from Andrew from Ashmore. You mentioned that public and private sector growth in credit demand was higher than expected at 3%. In what sectors are you seeing this? Is it diverse or quite concentrated in energy? What do you think has driven this unexpected increase in demand?

Question: Janany Vamadeva - Arqaam Capital Limited - Analyst : Thank you, Ramzi. Next question is on Saudi. Could you please provide an update on the progress on your growth strategy in Saudi Arabia?

Question: Janany Vamadeva - Arqaam Capital Limited - Analyst : Thank you, Ramzi. The next question is also on growth. How do you expect loan growth to evolve over the next couple of quarters? And any guidance you could give on Qatar-only loan growth? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 09, 2024 / 9:30AM, QNBK.QA - Q2 2024 Qatar National Bank QPSC Earnings Call

Question: Janany Vamadeva - Arqaam Capital Limited - Analyst : Thank you, Ramzi. I have just one more question. Somebody from JPMorgan is asking whether you have any other revisions to guidance in terms of P&L or balance sheet growth apart from the loan guidance you just mentioned?

Question: Janany Vamadeva - Arqaam Capital Limited - Analyst : Thank you, Ramzi. That's all we have. So Adam, do you have any on the audio line?