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

Good morning, good afternoon, everyone. This is Ahli Bank call. So I'm Shankar, Chief Executive, Finance and Strategy. And I'm joined by Trevor, who is our strategy also -- a strategic consultant. So welcome on board. And we'll just wait for 1 more minute. I just -- I'm just talking because maybe some more people have joined and it shouldn't be radio silence kind of. So we will start about 30 seconds or so. It's 12:02, I think we can start. So here is the key highlights for 9 months ended September 2024 in terms of results. [Operator Instructions] So our numbers are very steady. Net profit grew by 5.2% to QAR 647 million. There has been a steady customer deposit growth, and customer deposit growth [ only in this part of the ] balance sheet is significant, 13.8%. Loans and advances were flat almost, quite steady. And then there is a drop in EMTN on the liability side because we repaid $500 million of one tranche of EMTN, which matured in October -- sorry, which matured in September. So overall, total assets have gone up by 1.8%. Overall that's the impact... [Technical Difficulty]

Hello?

So that's the end of the balance sheet. So then [indiscernible] out in terms of a full year impact, and operating income was strong because of that, operating expenses -- I'm just doing the line-by-line thing, which we normally give you a brief. Things are there, it's published. So everyone can see that, but just giving you an overview of what happened. So net income was quite strong. Now the most important line is, of course, the provisions. Provisions, we have taken additional conservative provisioning as we have been discussing in the last 2 quarters, yes. So in line with that, we are -- have that. There have been some recoveries also. So that's the cycle of recovery and provisioning, which is higher than, in fact, 45% increase in recoveries. So there have been recoveries, there have been provisioning, mostly Tier 2. So on the whole, net profit went up by 5%. And in terms of balance sheet, we have discussed, the key movement was EMTN reduction because of natural winding-down maturity. And customer deposit was quite strong in terms of growth. Loans were flat. Interesting line, one more line item where we are seeing some growth is that [ proprietary ] investments, which is proprietary in nature, which are primarily we are -- obviously, [indiscernible] we are on overweight. The rationale for bumping up the bond portfolio is [indiscernible], which is coming down and we see yield pick up here. That's why going forward, you will see these kind of [indiscernible] over 2 to 3 years. So that is why we have improved that on [ bond improvement ] and bond portfolio, part of our propriety investment. That is, as mentioned, in terms of P&L and balance sheet. NPL improved [indiscernible] lined up almost steady, 2.78% as of September. Coverage has gone up. We've provided more... [Technical Difficulty] Hello? Hello? So we have been additional provision, taken additional provision for phase 2 loans. Just to [indiscernible] we are very conservative. And in line with that, we have done that. There's been some recoveries also. So I'll leave to questions. If there is any questions, please let us know. If there is anything at all, you can always contact us through email also.

Yes, go ahead.

I just want to say it's -- I hope I -- I'll just start with the questions. With regards to provisions and impairments, where is coverage now on Stage 3 and Stage 2, please?

Yes. So Stage 2 coverage as of September '24 is [ 17% ] and Stage 3 coverage is [ 77% ]. But Stage 3 coverage, you have to factor collateral also, then we have more than 100% cover. I hope that answers it.

Yes. I think in previous quarters, you were quoting that your coverage was higher, almost up to like 100%. So...

Yes. It is 100% in a sense -- if you take the collateral part, which is not the numbers. You can't -- the provision [ with the ] exposures, there's always a net of collateral provision. It is [indiscernible]. Is that clear, Mark?

Okay. I have another question then. Can you tell me what was the coverage last -- there's someone talking on the background. You need to tell people to mute their phones.

Yes. Excuse me, whoever has joined, can you please mute? Do mute, please? There's a lot of noise, background noise which is disturbing the other investors and callers.

Yes. Could you tell me what the coverage was of your NPLs for the past 3 quarters and what the trend has been?

You're talking about NPL coverage, right?

Yes. Stage 3.

Okay. So coverage is about 46% as of September '24, overall NPL coverage. But you're talking about only Stage 3, I guess, right?

Well, yes. Because -- and I'll ask why, and I'll come to that later. I'm talking about Stage 3 since the beginning of the year. What did it start at, at the beginning of the year, coverage of Stage 3, and where is it now?

Okay. Mark, just give me a second. Because then we need a few minutes to take that number out. So if there any question I can have while we are doing that.

Okay. Now there's a follow-up question while you work on that. In the past few years, your impairments has tended to spike in the fourth quarter. So tended to have more caution in the fourth quarter. But this year, you seem to be having sort of a higher overall provision rate. So do you -- has there been a conscious policy to smooth the impairment losses? Or do you think that there will be a further reckoning to sort of get towards -- to increase your coverage further?

So as I said in the beginning, there's been some movement to the -- there've been some [indiscernible]. So -- and depending upon the real estate [indiscernible] background [indiscernible] loans is what I mean, in terms of the largest [indiscernible]. We have taken all [indiscernible]. And so given this data point... [Technical Difficulty]

Sorry. I'm just saying it's almost impossible to hear you.

Hello? You have somebody logged in and [indiscernible].

I just can't hear.

Excuse me, someone has logged in and [indiscernible] background noise. [indiscernible] Mark, I think let's cancel the call [indiscernible] and I'll call you.

I'm sorry, could you repeat that? Is this -- I couldn't possibly hear.

Hello, Mark?

Yes.

Okay. So let's do one thing. You can drop this call and then just you just log in again. Or you can give me a number and we can have a discussion.

Yes. Can I give you my number, please?

Yes, please.

It's [ 507-23324 ].

So I'll repeat, [ 507-23324 ], yes?

Yes.

Okay. I'm going to give you a call about 1 minute. So by that time, I think the data will also be in. Hello? Hello? This is Ahli Bank team.

Hello?

Yes, who is speaking?

Is this Ahli Bank?

Yes.

[indiscernible] this call.

Say that again?

Hello?

Yes, we are hearing you. We are able to hear you. This is a financial conference call, please, yes. Do you have any questions? Can you identify yourself?

No, no. No questions. Have you resumed the conference?

Yes. So we were having good discussions. So I think we got a background noise, we had to switch on and off, but had a good discussion with some investors here.

Okay. Okay.

If you have any questions, just please drop a mail also, we are available anytime, yes?

Okay.

Thank you. Can you unmute? So we had a good discussion. And just to summarize everything once again, the profit grew by 5.2%, and net interest income and operating income are strong. We have taken some conservative provisioning. Customer deposits grew by 13.8%. EMTN, we had a natural rundown, which means we repaid something like USD 500 million. Loans are steady. So overall, almost 1.8% asset growth. Steady NPL ratios, provision based on what we think is conservatively we do normally. So coverage overall is 246%. NPL ratio of 2.78%. So this is the key performance highlight. For questions, please drop an e-mail to us. It's the end. I think with that, unless we have anybody has any questions, we will end this call. Thank you. With that, we formally close this call. Thank you very much.