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

Okay. Good afternoon, ladies and gentlemen. Anybody who wants to identify themselves or we can just -- I'll just give you an overview. My name is Shankar, I'm the Chief Executive of Finance and Strategy, primarily responsible for the -- so you are on Ahli Bank investor call. We're going to walk you through the 2026 H1 numbers. I'll just briefly talk about the headline numbers, the key highlights, et cetera, before we leave you for questions. If you have any questions specifically, please feel free to ask followed by -- if you want more details, we can send you e-mail also clarifying a few things. So here is what happened. So net profit grew by 1.2%. The results are there. You can quickly calculate. Loans and advances had healthy growth. Customer deposits went down a little bit, so investments and total assets were flat. So obviously, this is not an unexpected or any surprise from our point of view. Ahli Bank has been a very steady shift over quarter-over-quarter, year-over-year. So this is in line with our very steady P&L growth and good loans and advances growth. That tells us that the P&L will be sustainable over a period of time. So there has been a little bit of [indiscernible] net interest income grew by 7%. So in this quarter or in this half year, we were able to improve the margins. Obviously, the margin for us gets affected only when in the interest rate environment, there are movements. So interest rate environment did not move. As you know, there was no Fed action as such. So normally, in our case, when the interest rates go down, the assets reprice faster than the liabilities since nothing happened in the interest rate environment, would come back with improvement in our margins. Other than that, I think it's been a very steady shift. Somebody wants to talk -- so asset quality once again is steady. And NPL, as you can see, 25% versus 26% H1 has actually come down. Overall NPL has come down because there have been some recoveries. Asset quality once again is better than the previous year, 2.38% is the NPL ratio versus 2.91% last year. So there's been improvement in asset quality, which is very key for us. But we continue to be conservative in terms of provisioning. So we have made the adequate provision just to take care of any future risk. Coverage ratio, that's why you can see from 238% it has gone up to 277%. That is an improvement because we have provided conservatively for some of the [indiscernible]. So I'll leave you the floor for a minute and then ask if you have any questions, please feel free to ask. So we just went through the brief highlights of YTD June 2026 numbers. Once again, the profit has grown and is very steady, which is like very typical Ahli Bank. We don't give any surprises. Conservatively provisioned, conservatively accounted for with a good loan growth. That means these numbers are sustainable and so on. So if you have any questions, please feel free to ask and we are waiting.

No further questions at this time.

I could not hear you. Can you repeat, please. No, we just gave a brief key highlights. We spoke about the key highlights, performance highlights. And I think it's once again [indiscernible] That is how we define ourselves has been a steady ship and another one of those quarters where in line with our guidance. So we just wait for some more people to join or ask some questions. We're just on mute and on hold. So feel free to talk if you have any questions. We can also receive any e-mail notification that we respond. So it's been just on the overall situation, I think it's pretty stable, I'd say, with there during COVID where some issues are there. I think we are going through it again. But there is nothing alarming or something in terms of financial transactions with the rest of the world. All that is absolutely [indiscernible] receiving payments and sending money out or whatever transaction in support of the business. So we've been focused on what we can deliver. That has been our core competence and we are sticking to that. Thank you. So once again, just to brief, there was in July, I think it's not June, but in July, we had a repayment of EMTN. In February, we had a repayment of [indiscernible] of $300 million. So all that international transaction for investors related, particularly the global investors, I think stable, no issues, on-time repayment and everything as you can expect. So no issues at all. And you can see the loan growth, which tells us that there is a demand for credit. Good credit is always is our priority as as you can see from the low NPL ratio vis-a-vis the markets [indiscernible] should be covered in terms of provisioning and steady loan and profit growth. So I think this is who we are. I think if you had listened to us 3 months ago in the first quarter and we would have have said the same thing. That is who we are a steady ship. Despite rough quarters or good quarters, we remain steady. So this is the key highlights for June 2026 results. If somebody has any questions, please go ahead and ask, Thank you. Good afternoon. This is Ahli Banking. We just walked you through the early highlights of YTD June 2026 financial results. We are awaiting any -- there's a Q&A. If there is any questions, please feel free to ask. The numbers are there in the public domain, stock exchange, et cetera. So we can always download that. This discussion will be followed up in a couple of days with the investor presentation that will be uploaded into the website. You can also refer to that subsequently in a couple of days from now, which will give some more details on more flavor. But here, we are in a Q&A session. So if there is any questions, please go ahead and ask. We are more than happy to reply. You can also drop an e-mail. We will respond to that if there is any question. So just again summarize what we just discussed. It's very [indiscernible] listened to us in Q1, it was almost same line. So profit grew by 1.2% under the circumstances, I think we have done well. Loan growth is also, I think, pretty good, 7.5% versus December. So in the last 6 months, we could increase the loan book, which means that the P&L will be sustainable. Slight pressure on customer deposits, but that's okay. There's a competition there. And in terms of balance sheet, we have repaid $300 million of AT1 that happened actually in February 2023. This is a Q1 event, but it's also H1 event because it's part of -- as Q1 is part of H1. In July, as we speak a few days ago, we repaid one more tranche to EMEA by $100 million. So we have sufficient liquidity. Everything is normal despite the whatever terms we are going through. We have grown the book. We have grown the P&L and very conservatively done in terms of accounting provisioning, et cetera. That's why you see an NPL ratio of actually industry beating at 2.38% versus 2.91%. So our quality of assets have gone up, improved and the coverage has gone up asset quality NPL coverage, 277% versus 238% when we say that we are conservatively provisioning for Stage 2 loans. This is what it means. So overall, it's a very steady ship, very typical of Ahli banks, [indiscernible] very predictable. So this is who we are year-over-year, quarter-over-quarter, half year over half yearly, we churn out this steady kind of performance. So this is who we are. So please feel free to ask any questions. If there is no questions right now, we'll just wait for 5 more minutes, 10 more minutes. And you can also drop an e-mail. We will also be uploading our investor presentation. Subsequent to this call in about a couple of days, more details will be available. In any case, the financial results are in public domain, including stock exchange, you can always download that. So all in all, it's a very steady satisfactory results. And yes, if there is any questions, we are just listening to you Yes. Just a couple of more numbers people who are interested. The capital adequacy ratio. So one of the things we have always been articulating is our capital level. So capital adequacy ratio of 18.9%. I think that is well capitalized in terms of bank with huge headroom for growth. So the reason I'm lashing this number is obviously, we have repaid $300 million of AT1 in February 2026, which means part of H1. Des that, the capital adequacy is 18.9% vis-a-vis the requirement of 13%. So we are very well capitalized. And that is a good news. And obviously, a lot of other things are steady despite the circumstances. That is who we are, as we said in the beginning of this conversation. maintaining leadership is the priority, and that remains so. Once again, just summarizing before we kind of wind up this call because unless there is any question, there is no question means we can just wait for a few more minutes. So summarizing this, net profit grew by 1.2%. Loan growth -- loan grew vis-a-vis December by 7.5%, which is fantastic. We're very happy about that, which also tells us that the loan book has grown, the income will also grow in terms of projections. And the other metrics which we track, the important ones are the asset quality. That has improved versus December. For example, the NPL ratio is 2.38% versus 2.9% -- so it's also one of the lowest in the industry, by the way. And the NPL actually came down. There's been some increase in Stage 2 loans, and we have adequately covered that in terms of provisioning. That is who we are in terms of conservatively making provisions. So our NPL coverage has gone up to 2.77%. The most important thing, as you know, the rating agencies in June -- June -- middle of June, which is Moody's has reaffirmed our rating to A2, which is a confirmation of that the risk profile of the bank remains steady. So despite the geopolitical situation and things like that. we are extremely happy about that. We are the second best rated bank by Moody's in this country after QNB in the conventional phase. So that is some achievement, which means the asset quality is steady. That's what they think, and we are well capitalized. These are another commentary they have come up with. So we go through extensively all the details, all kinds of data with them and then they give us this rating. So that's also a part of our -- if you can go through the press release, we have mentioned that extremely happy to report that Moody's have reaffirmed the rating for Ali Bank, which is great. And also also reaffirmed the ratings in line with the country's rating and other ratings. So those are very important data points for any investors to look at about the bank, about its asset quality, about its capitalization, about financial performance and so on. So no surprise as such. I think despite all the pressure and everything, you can see the results are pretty stable. This is a good news from the investors' point of view. So from our point of view, we are very satisfied with where we stand at this point in time. Everything is being carefully watched and adequate steps are being taken in terms of mitigating risks, which we see having a conservative provisioning is -- so this is who we are. This is the summary of the June 2026. ladies and gentlemen. I think we have given few times. And there is nothing else, I think we can close this call. Thank you very much for attending this investor call for half year ended June 2026. If there is any questions, any question, whatever, please feel free to drop an e-mail. We are more than happy to reply to that. And the results -- the published financials are in the public domain. It is in the stock exchange. It is everywhere. We'll also be uploading it. And this conversation will be followed by an investor presentation deck, which will be uploaded into our website as always. You can always download that, take a look at it. It will have in line with the quarter that we discussed all that will be mentioned there. So we can also drop an e-mail whenever we will be more than happy to respond to that. So just summarizing this, it's a very steady results in line with Halyankyle of functioning, very conservative, very steady and all the resequately taken care of as we understand. So if there is any questions, feel free to ask. And with that, I think we can conclude this investor call. Thank you very much. Much appreciated for being with us. Thank you. Thank you.