Ahli Bank Q.P.S.C. (ABQK) Earnings Call Transcript & Summary

Good afternoon. This is Ahli Bank team. My name is Shankar, I'm being joined by my colleague, Trevor, for this meeting. We're welcoming you to this investor presentation, investor call. I'll just walk you through some summary of what happened during this H1 2022. The results are public. So I'll just read out some of the numbers, which we think is important and we should communicate to the investor community. [Audio Gap] on the bottom line. So we had a net profit growth of 7.2%. And that we think is some aggregate of a lot of good things that has happened in the bottom line. We also had some key metrics, which we will discuss with you, where we think we have done well. For example, our loans and advances have grown. So the books have grown, which is a good sign. Some of the things that happened during [Audio Gap], for example, we had some interesting development on the funding side, where the QCB repo was reduced [Audio Gap] with support from Central Bank in line with rest of the world. So we have mentioned that in our brief investor presentation pack, which will be in the website shortly. So we had some reduction in that exposure on the asset side. That is the -- and we are talking about the repo facility, a special repo window, which was available for COVID related support. So that funding is down by QAR 800 million roughly to QAR 1.47 billion. It was earlier QAR 2.3 billion, if you all can recall. In the asset side, as of 30th of June, the current exposure or support under this special window is about QAR 1.98 billion, but that is as on that date. Subsequently, this is down to -- or equal to the funding facility we have taken. There were some documentation-related issues that we couldn't complete, which subsequently got completed as we speak. So the funding under this facility will match the exposure on the asset side under this facility. That is as per the Qatar Central Bank guideline. That's the important development. We thought we should let all of you know. And again, recalling what happened on the regulatory side, which has impact on the way the assets and liability look like or the balance sheet looks like is the EMTN now qualifying as a part of loan-to-deposit ratio. So that's why you see some reduction in customer deposits, because since the liquidity is available through some long-term funding mechanism, so we don't need that [indiscernible] to go for some short term. So these are minor adjustments on the balance sheet side. And of course, the Qatar Central Bank is currently discouraging short-term customer deposits from outside Qatar. So in that regard -- this is same as that was there during March, but I was just recalling, so that we understand this balance sheet very clearly. So the mandatory QCP reserve requirement for non-resident deposits have gone up from 4.5% to 9% for less than 1 year maturity. So this has got a significant impact on some of the banks. For us, it didn't have much of an impact because we were already looking at it very carefully. Our most of the funding outside Qatar are all long-term, in line with our Fortress Balance Sheet strategy. So in summary, we have a strongly capitalized -- strong capital. We have capital adequacy of about 20.2% post dividend. Some of the other developments during this half year will include the repayment of funds to EMTN, QAR 500 million during February. And we also had one other long-term facility through some very important -- Barclays, our relationship with Barclays, and topping it up at a very attractive pricing. So that is on the funding side. One more important development which is significant is the NPL ratio that stood at 2.55%. It's down from 3.74% during the year-end, and the coverage has improved to 175%. Our guidance remains that these are all the churn that has begun to happen, that is some names moving in and some names moving out. But the NPL ratio will remain at elevated levels. But at the same time, we'll be covering ourselves on the provision side in line with our Fortress Balance Sheet strategy, which we have been discussing with all the investors, investor community at large, particularly the bond holders that we will have the coverage at about 135% in general, that's our target. And so this is the summary of the performance. We'll take questions, if we have any. Thank you. Just to repeat, our NPL ratio stood at 2.55%. And that is obviously, we stated that the churn of some of the names going in and some of the names coming out of that bucket has started, which is a good news. Right now we saw one big name going out of the NPL because the issue is resolved. We are absolutely, of course, in touch with our rating agencies, detailing all these developments on almost real-time basis when there is a significant development. So it's a good news. It's been a good half year. We're waiting for any questions. Please, if you have any questions, you are free to ask. And also, as always, as a follow-up, you can send e-mails to us, me and Trevor. We will be more than happy to answer any questions. We're waiting for any questions, please. Good afternoon, this is Ahli Bank team. We have just concluded our briefing. We're waiting for any questions on the H1 2022 results. Please identify yourself as soon as you log in. Thank you.

Yes. Hello. This is Trevor here. Just to reiterate what Shankar said, if you do not have any questions now but have anything later, please feel free to contact Shankar and myself at any time. Thank you.

So gentlemen and ladies, we will put our investor pack in the website shortly. And as Trevor just alluded, if you have any questions whatsoever, just send us an e-mail, we'll be happy to respond, clarify anything you want. And with that, we think we'll wait for 5 more minutes and we'll conclude this call. Thank you. Good afternoon, investors. We are Ahli Bank team, waiting for any questions before we conclude. So we also are available, as my colleague Trevor was saying, as a follow-up. You can send e-mails. We'll be more than happy to clarify anything to you and your questions. With that, I think it's time to conclude this investor call. We thank you, all the attendees, and I look forward to having a discussion with you in the next quarter. Thank you. Appreciate it. Thank you.