Doha Bank Q.P.S.C. (DHBK.QA) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for joining us today. This is Janany Vamadeva from Arqaam Capital, and I'm pleased to welcome you to Doha Bank's Full year 2025 earnings webcast. Without further ado, I'll now turn the call over to the Group Deputy CEO. Over to you.

Good afternoon, and thank you to Janany and Arqaam for hosting the Doha Bank Fiscal Year 2025 Investor Results Call. And of course, thanks to all of you that have joined us today. I'm Dimitrios Kokosioulis, the Deputy CEO of Doha Bank, and as in previous calls, I will take you through some high-level updates on the business, after which I will hand over to our CFO, Aman, to cover the financial results before we move direct into Q&A. Let me begin with an overview of the progress we made throughout 2025 under the leadership of our Group CEO, Sheikh Abdul Rahman. Our Himma Transformation continued to demonstrate disciplined and steady execution, delivering meaningful outcomes across the organization. Now if we cover some strategic milestones in '25. We achieved several important strategic advancements. More specifically, we successfully migrated our credit card portfolio to Mastercard, enabling global benefits and stronger security and a more seamless customer experience. We have also launched one of Qatar's first API, application performance, banking platforms, giving corporate clients real-time transaction capabilities and deeper integration into their financial operations. From a governance perspective, we strengthened our risk management framework by establishing dedicated fraud management and technology risk functions, which is an important step in the bank's resilience agenda. Capital markets continued to demonstrate confidence in Doha Bank. Throughout the year, we raised nearly USD 1.6 billion through 4 bond issuances. In December, we priced QAR 500 million sustainability issuance listed earlier this month, marking the first ever sustainable instrument on the Qatar Stock Exchange. We also executed Qatar's earliest digitally native note issuance for USD 150 million within T+0 settlement on Euroclear's D-FM platform, underscoring our commitment to market innovation. Continuing on covering our digital transformation. We were able to accelerate our journey meaningfully. We launched our award-winning corporate mobile app, which is one of the best in the country and enabled full digital onboarding for retail customers. Our retail app remained to be #1 in Apple Store and #2 in Google Play in Android banking in Qatar, reflecting the strong adoption that we aim for. For corporates, we delivered impactful digital capabilities, including tax authority integration, and we have received accolades from the various tax -- the government entities, including the tax authority, remote check deposit, end-to-end trade initiation and approval and enhanced customer servicing tools. We expanded our robotics process automation program with over 20 new automated processes in the back office and completed major enhancements to our treasury management platform. Something important that we have to mention is that we were able to also enhance customer experience in retail banking. As a result of the Ipsos market research survey we launched in 2025 to benchmark us against the last survey we launched in 2023, we have seen some very significant jump in customer satisfaction from 53% satisfaction in '23, we went up to 93% satisfaction from retail customers in 2025; and Net Promoter Score from minus 22 in '23, it went up to plus 61. So we saw 83 points up in 2025. And this marks the great confidence and satisfaction that our customers have in our services and product offering. And this has placed us to be the best conventional bank in the country. Actually, we strengthened our international presence through a strategic MOU with the Seviora Holdings to boost Qatar-Asia investment flows. We also participated in Sibos and the IMF World Bank Annual Meetings contributing to discussions shaping global financial services. Additionally, we expanded our wealth management platform through new global partnerships, providing improved market access to our ultra-high networth clients. Community engagement remained a core pillar of the Himma Transformation. We hosted a youth summer camp with the Qatar Equestrian Federation and continued supporting major national events, including the Global Champions Arabians Tour and the upcoming Ooredoo Doha Marathon 2026, which took place actually last week. At Web Summit Qatar '25, where we participated as a platinum partner, we generated strong visibility, new-to-bank customers and meaningful business opportunities, showcasing the latest developments in -- actually in technology in various self-service devices, ATMs, et cetera. And of course, we launched and we showcased our latest mobile banking, retail mobile app and corporate app. Now the outlook for 2026. Looking ahead, our strategic priorities for 2026 remain clear and focused. We will continue to grow a high-quality loan book in priority sectors, while maintaining a prudent risk appetite and proactive NPL management. Digital channels will be further enhanced as the primary customer touch point. And we have seen also the trade-off between digital channels and branches. We have been able to reduce the branch network from 21 branches down to 13. We have further plans to reduce our retail footprint and to enhance our digital channels so that we can cater our clients through digital channels and reduce costs as well. We are going also to focus and enhance our mobile offering and accelerate the use of AI and machine learning for service delivery, personalization and new product innovation. We will continue optimizing our cost base, reviewing our branch footprint and investing in modern systems to improve our cost-to-income ratio and productivity. Diversifying funding sources and maintaining strong capital ratios across all jurisdictions will remain a core focus. We will work to further strengthen liquidity, funding and overall balance sheet health. And finally, we will continue deepening ESG integration into our operations, risk framework and business strategy, building on the new momentum of our recent sustainable issuance. With that, I would like to hand over to Aman, who will take you through our 2025 financial performance. And after his remarks, we will be happy to answer any questions that you may have. So Aman, please let's cover the financials.

Thank you, Dimitrios. This is Aman. I'm the CFO of the bank. I will take you through the financial highlights. Starting with the balance sheet. The total assets grew by around 9% year-on-year. Major contributor coming -- major contribution coming through the loan book, showing a growth of around 11% year-on-year. The investment portfolio showed a growth of around 7.5%. The loan growth guidance for 2026 is 5%, knowing it's a conservative target, but we are being cautious as we continue to deal with the legacy and possibly negotiating favorable terms for the bank and at the same time, exiting some relationships. The customer deposits grew by around 13.5% year-on-year. The strategy here was to attract the customer depositors as compared to short-term interbank funding. The LDR remained strong at around 94.45%, well within the regulatory minimum -- maximum, sorry. The capital ratios remain healthy. The bank's CET1 stood at around 13.16% and the total CAR around 19.05%, respectively. Given the expected asset growth and assuming the current equity structure, the guidance for 2026 for total CAR is to be around 18%. Moving on to the income statement. The bank achieved a total profit of around QAR 920 million, which shows a growth of around 8% year-on-year. The net interest income remained flattish. The ROE for the year stood at around 6.74%. The guidance for 2026 ROE is to be somewhere in the range of 6.7% to 7%. NIMs stood at around 1.72% versus 1.9% last year, owing to the rate cuts happened in Q3 and Q4 of this year. As we have earlier explained on the calls that based on our book, the assets are repriced immediately, whereas the liabilities show a lag effect between 3 to 6 months, which was also reflected in our NIMs increasing from Q1 to Q2. Similar trajectory will follow for the current year. We have -- we are anticipating actually a couple of rate cuts, as per our forecast for the current year 2026. One of the highlights for the year was that the fee income has improved as compared to last year. Now fee income for the year 2025 was 15.7% as compared to 15.14% last year. And as we have continued to give the guidance for fee income to grow beyond 15% of the total operating income, and we are well on track. The bank's cost increased by around 4.7% during the year, and the cost-to-income ratio stood at close to 40.3%. Given we are still in the transformation, our guidance for cost-to-income ratio next year is to be around 39% to 40%. The net impairment for loans for the current year was around QAR 738 million as compared to QAR 702 million last year, an increase of around 5.1%. The cost of risk was 115 bps as compared to 118 bps for the same period last year. The guidance for cost of risk for the year 2026 is to be around between 105 to 115 bps. One of the highlights -- major highlights for the year was improvement in NPL ratio from 7.43% last year to 6.6% this year, owing to the loan book growth, the recoveries and some write-offs. The guidance for the NPL ratio for the year 2026 is to be around 6% to 6.1%. A very healthy specific provision coverage as of 2025, around 76.4% as compared to 74.8% last year. We now open the floor to questions-and-answer. I'll hand it back over to Janany.

[Operator Instructions] So before we go to the Q&A, I'll start off with a couple of questions, if I may. Margin pressure during Q4 was a bit worse than what we had expected. And if I remember correctly, in the last call, we were expecting the margins to improve in H2E and Doha Bank, of course, is better positioned for rate cuts. So if you could give some color on the margin drivers in Q4 and also the guidance you've given for 2026 and 2027? Because it looks like you have revised it downwards, including the return on equity as well from 10% to like 7% handle. So if you could explain like what has changed, that would be helpful?

Thank you, Janany. So I'll start with the factors that led to the dip in NIMs. And as you know, there were rate cuts that happened during September, October and December. And at the time, earlier in the year 2025, we mentioned that if there were no further rate cuts, you will see an improvement in margin owing to the composition of portfolio and exactly our margins jumped up in Q2. At the end of Q3 and Q4, owing to the rate cuts, there was the short-term dip in NIMs, and we're going to -- based on a trajectory that in Q1, we are not expecting any further rate cut, we are expecting the margins to improve. And any time there is a rate cut, there is always a short-term dip, but in long term, it favors Doha Bank, and this is something that we are maintaining. Your question on the revised guidance for NIM for 2026 and 2027 is: First of all, we gave 5-year guidance that was given some 3 years back, and we are currently working on a revised 5-year guidance that will happen during Q1, and we will update the investors in the Q1 call. So currently, we have worked on the guidance for 2026 and 2027 and have revised it accordingly. But further 5-year guidance will come up in the Q1 investor call, and it will show improvement in margins definitely.

Aman, that was helpful. So we have a question from Chiro.

Yes. So first, congratulations for a good set of results. I mean, overall, it's continues to improve. So first is I want to get a little more sense purely on the asset quality side, basically. So how the recovery is coming from, which are the sectors where you expect things to improve going forward? Some more clarity on that side would be very helpful. And even purely from the balance sheet side of it, the deposit growth has been quite solid. So if you can give us some color on how do you plan to take your loan-to-deposit ratio going ahead? And what kind of loan -- deposit support would be required to have this kind of loan growth going ahead?

Okay. Thank you for that question. This is Salman Siddiqui. I'm the Chief Risk Officer for the bank. I'll take the first part of your question, which is on the asset quality and the latter part would be taken by my colleague, Fawad, the Chief Treasury and Investment Officer. So as far the asset quality is concerned, yes, we will continue to see improvements. The bank has devised a very well thought through plan for recoveries, resolutions, which includes certain traditional and certain out-of-the-box solutions that we've already touched upon in our earlier investor calls for the third quarter and the quarter before that. Now those actions are at play, and we are seeing the results thereof materializing, and we expect those results to continue materializing. As far as the sectoral recoveries are concerned, I can't really pinpoint a certain number, but we have gone down to the level of each exposure, which we feel there was a distressed exposure and needed redressal and have carved out multiple strategies on each exposure from the perspective of if strategy A doesn't work, how do we go to strategy B? And those have been simulated and run through multiple times to see what are the odds of a successful outcome. And having done that, have we finalized our action plan.

On the asset quality side of it, so we see things seems to be improving, coverage is -- also have improved quite a bit. So why is the cost of risk still at elevated level over the next 2 years? Can't we -- do we expect it to come down or you have been a little more conservative there?

Okay. So it is expected at both levels. The cost of risk, I understand that it is basically coming down to 105 to 115, which my colleague mentioned earlier. And then for '27, the guidance is further down, which is 100 to 110 bps, right? So we will see a continuous decline in the cost of risk. However, as conservatism would dictate, we are also very cognizant of the resolution plan that we are looking at. And that plan also entails that, okay, as the resolution comes in, we redeploy the recoveries into better coverage strategies as well. So we are looking at both sides that, okay, how do we resolve the distressed book while maintaining the ratios at better than or in line with industry standards. Thank you.

On your second question, this is Fawad Ishaq, I'm Chief Treasury and Investment Officer. So this is, of course, very clear strategy around making sure that we were raising deposits at the right levels, along with paying off interbank, as the CFO had mentioned earlier, and diversify our deposit base. So the key sort of focus was for us on the retail side, naturally, to increase Riyadha customers to have more of marketing in terms of CASA increase; on the corporate side, all the asset growth that you've seen with the corporates, these were done on back of taking salary accounts, taking deposits, having sort of a strategy to make sure that we get the ancillary once we go deploy the balance sheet. And finally, to make sure that on the long-term liability side, we are looking at the EMTN market, we're looking at syndication, bilateral trade loans. As pointed out earlier, we did our first Qatari Riyal issuance, which was a sustainable one, the first one to be listed on the QSC. We also did the first tokenized issuance as well in the market. We issued the QAR 500 million initially at the tightest spread this year for Doha Bank, then we did a tap and then we had several private placements. So this whole thing is part of a funding plan, which we looked at it last year. And now we extended that funding plan going for next 5 years to make sure that we have every bucket covered from a deposit diversification basis and also branching out in terms of the long-term liability that we raised through EMTN and syndication. And we'll be looking to diversify into other markets this year. We're looking at the Asian markets, we're looking at local currency markets. So the plan is to keep on enhancing the deposit base. And finally, on the LDR, if you look at it historically, we had been above that 100 level till 2023. 2024 is when we started the transformation. Since then, we have been compliant and we keep it optimal between 90 to 95, and that is what we will target along with our asset growth.

And just a follow-up. Again, the loan growth guidance is -- appears to be a little bit conservative. I mean things appear -- even in this quarter itself, you have been able to beat maybe 1.5x the next year guidance. So are you again being conservative there with deposits flowing in?

Okay. So I'm sorry, this is Salman, again. As far as the loan growth is concerned, we have taken a very, I would say, a knowledgeable view of the market, and we have expressed it in our appetite. As you saw that the bank, as you mentioned as well, has exceeded the expectations, but we would still continue to practice that, I would say, cautious but steady approach of quality asset building. We -- our business teams are at work on that. The plans are very robust. The plans are very promising. We'd rather undercommit and overdeliver rather than overcommit and underdeliver. So that is what we are looking at. Setting the right expectations then perhaps meeting them and exceeding them.

Aman here, just to add something. At the same -- as we are growing the loan book at the same time, we're also looking at exiting some relationships which are not favorable to the bank. So what you're talking about is a net loan growth for the coming year.

Our next question comes from [ Murad Ansari ].

Yes. A few questions on the results, again. So the fourth quarter, going back to the loan growth number, has been quite strong, and we've seen it across a number of banks. So that -- most of the banks were guiding towards mid-single-digit kind of loan growth and fourth quarter has been quite strong. So just wanted to get a sense of where -- what sectors have been the key drivers over here? And when you look at fourth quarter, were there some corporate deals that got front loaded, and hence, we've seen this growth number being much higher than what was guided for? And are there any possibilities of similar surprises in next year on the corporate side? Just wanted to get a sense of the pipeline in terms of corporate deal? I mean, could there be something which could end up driving up loan growth higher than your expectations? My second question is around the asset quality. So we've seen some improvement on the Stage 2 loans, a small one, I think, around QAR 500 million. Is there a prospect for -- I mean, when you say improving NPL coverage, building up coverage across, should we be looking at some reclassification over here, I mean, that's on Stage 2, I mean, is there something that you're reviewing, which could possibly go back into Stage 1 and lead to some improvement in this ratio? And third -- and related to that, I mean, on NPL coverage. You've made significant improvement versus last year, roughly about 400 basis points on coverage. You're guiding to another 100-odd basis points provision charge. In terms of coverage, where do you want to be by the end of, let's say, 2027 with both years looking at about 100 basis points? Where do you think is a comfortable level where you would be happy with or targeting in terms of NPL coverage? And lastly, on margins. So you highlighted the timing effect. And I just wanted to also get before -- on your expectations of rate cuts, what do you expect in 2026? And again, I mean, should we see a similar kind of cycle where if rates are stable, we should see spreads move up to that 1.7, 1.8 kind of level over the next 6 months?

Okay. Thank you for that question. A very detailed one and multifaceted, definitely. So we'll start with the first part of it, which was on the growth. So yes, the growth trajectory has been really impressive, and it was primarily driven by the bank's posture on the growth of the GRE sector, which is a strategic milestone of the bank as well, part of our transformation program as well to focus on the GRE because there's a lot of drive from within the country aligned with the Vision 2030, where the growth was. The bank partake in that, and we have achieved the anticipated goals for the GRE sector growth, which was, at one point in time, if you were to look at our '24 numbers, it was around 1%, slightly above that; and now currently, we are at more than 5% of the portfolio -- so we are currently at 8%. So you can see that is a phenomenal level of growth, and these are very well-structured transactions. We continue to anticipate a very healthy pipeline. In that sector, we have some really solid deals in the pipeline. So we see a lot of steady growth. That is further augmented by our pipeline of corporate or, I would say, pure corporate deals that are in line with the bank's approved risk appetite, they meet our return objectives as well and also aligned with the Vision 2030 of the State of Qatar. So that's for the first part of it. And we are also very conscious of that we would like to continue diversifying our portfolio. So the bank is getting into sectors that are new in terms of diversification. We are getting into health sector more, we are getting into aviation sector, we are getting into tourism. So these are some of the sectors that are providing the early mover advantage to that as well, aligned with the government posture. And we see that it is the perfect marriage between our risk appetite and what we want to derive out of it. So that's the first part. As far as the asset quality is concerned, Stage 2 in particular. We will see -- there is going to be 2 parts in it. The first part would be the regular curing part, which is the accounts that have already achieved their curing and they would complete their curing period of 1 year, that's the cool-off, they would revert to Stage 1 as per the normal practices under IFRS 9 regime. Moreover, as I earlier mentioned in my statements to certain -- my response to a certain question earlier, we have this very well-thought-of strategy around the NPL resolution and the distressed book resolution, which primarily comprise of legacy Stage 2 portfolio. That strategy is at works. The results of that will continue to reflect through our numbers throughout 2026. Cost of risk, that was the third part of your question -- the coverage, sorry. We would continue to maintain the coverage. We would endeavor to maintain the coverage around 76% to 80% region, that is the bank's anticipated number, and we have our plans to continue hovering around that number only to better it, not to worsen it. So I think the fourth part, I'll leave to my colleague -- the margins to my colleague, the CFO.

Aman here. So with respect to your question on the margins. We are definitely expecting improvement in Q1 and Q2 -- early Q2. Our expectation for rate cuts is we have factored in the rate cut end of -- somewhere end of Q1 and one in Q2. Again, if the timing matches our expectations, we again would -- may have a short-term dip. Given that we have -- most of our loans have started actually reaching the floors, we're not expecting the financial impact to be as -- to what it is right now, given that our funding would continue to be repriced once the rate cut happens. Our expectation, as provided in the guidance, is we want to land some around 1.8-ish end of next year. This is the expectation.

We have a few questions in the Q&A box. So the first one is from [ Aslan Altaf ]. He's asking about whether you're considering switching to half yearly dividends?

So Aman here, I'll take this question. Currently, we have not discussed this. Again, these are things, if it happens, you will -- as a market participant, you will definitely know. But currently, no such discussion is happening right now, but we will update the market as and when.

And second question is from [ Nikhil ]. Loans did grow by a good 6% during Q4. But looks like it has not translated into asset yielding ones as this has not necessarily materialized into higher interest income. So he's wondering whether the loans it's to do with the yields or to do with the rate cuts?

So of course -- I think this question is, I would say, I would have 2 parts to it. Of course, we are targeting a better quality. But in terms of yield, my earlier comment that we are planning to exit some relationship was based on the fact that we are currently reviewing our whole portfolio when it comes to income generation because I think we have already established strong protocol when it comes to addressing the asset quality part that we have discussed over the quarters. But when it comes to income generation, of course, now we are reviewing the whole book and hence, we may be exiting some relationships. Now your -- specific answer to your question, of course, there were margins. But as you also know that there were rate cuts that happened in Q4 that have basically diluted the impact of any improvement in margin that may have come.

We have our next question from [ Shreekant ]. I don't think we can hear you, [ Shreekant ]. [Operator Instructions]. I think we have a question in the Q&A box. What measures are the bank taking to improve its cost-to-income ratio?

I'll take this. This is Aman. I think our Deputy CEO earlier when he was giving the update, he mentioned about the initiatives, which involves rationalizing all aspects, including rationalizing or looking into our network. As you know, at one time, we are saving -- at one side, sorry, we are saving the cost, but at the same time, we are under transformation and those costs are being reinvested in income-generating project that will be beneficial for the bank in the future. Just to give you some perspective on the numbers. Last year alone, we saved around QAR 100 million that was reinvested into multiple initiatives in the bank. This year, 2025, we saved another QAR 50 million; again, most of it was reinvested. But having said that, the trajectory for the cost-to-income ratio is low going forward from next year onwards, as we will be achieving our optimal efficiency under the transformation program that we are going through, and you'll see a continuous downward trend.

But then also, just to add to Aman's points, we are taking measures, and there are also specific items that we are looking into in the overall cost posture of the bank. Rationalization, further rationalization of our retail network in domestic country in Doha in Qatar. As I said, from 21, we are down to 13. We are looking at some more branches to close. And this is depending also on the penetration we have in adoption of the, let's say, the digital adoption that we have. And we see that it's going ahead with a steady increase. And actually, we are actually seeing that by adding more features like digital account opening, digital onboarding, we are going to have a top-up for loans, STP through the mobile banking, e-loan. So we see that the customers are using more and more our digital channels. So we will see further reduction in cost in terms of rationalization of our domestic footprint, including also international. We have already closed some locations overseas, rep offices, branches. We are looking actually to further streamlining this footprint we have internationally. So there are some opportunities there. And of course, the use of new technologies, we are going to focus on AI as well. And this gives us opportunity to leverage our current headcount and to see there might be opportunities to proceed with the restructuring so that we can actually reduce cost even further. And of course, it's business as usual to renegotiate contracts, leases and other big contracts with big suppliers, third parties, we have seen some good improvements there. So this is the key items of our cost agenda and rationalization agenda. And as Aman has stated, we are actually taking measures. But given the fact that we have to invest in new systems, we see that most of the savings are going there. That's why the cost-to-income ratio has not been decreased further. But I think with the actions we're taking, you will see some also tangible results in this field as well.

So we have our next question from Andy Brudenell.

I just wondered, could you talk a little bit about nonfunded income? This is supposed to be an area to be a larger contributor. And I guess, if you've got this cost-to-income ratio reduction target, then you're going to need some nonfunded income that contribute fee growth in '25 [indiscernible] so yes, any color there, please?

Okay. So Andy, Aman here, I'll take the question. So the nonfunded income has 2 components, the fee and the other income. So the fee income has actually shown a growth. We have grown this by around 2.7 -- around 3%, QAR 11 million in terms riyals. When it comes to the other income, there are some components where -- I would say, nonrecurring components that -- specifically relating to the investment side that did not happen this year. Again, they are dependent on multiple factors, including the timing of the market as well as some issues on the ForEx side, as we were constrained by certain regulations, that led to a dip in that particular area. But having said that, we have plans for 2026 to basically further improve this number, not just the fee component, but the other component, as I just explained.

Is there a target of contribution, like nonfunded income over total income?

So the way we target, Andy, we -- as earlier explained on the call, our main focus would be to further enhance the fee income part of the nonfunded income. We have reached around 15.7%. Next year, our target is to grow it beyond 16% because that is a more recurring part, and this is something that the bank, as Dimitrios and Fawad earlier explained, we have established those relationships with those large corporates and GREs on the back of which we are getting business, which is not just the loan on deposit beyond that. So that would help us in generating that fee component -- fee income part component.

We have one more question in the Q&A box from [ Nikhil ]. Can we know the progress on your buyback program?

I'll take that question. Currently, I would say that we don't have any update from the last quarter. We are still basically in the regulatory approval process. So when there is some update, we will definitely share with the market.

We have [ Shreekant ], again.

So regarding your 2027 guidance, you earlier mentioned, now you have revised it to 7%, 7.5% from 10% earlier. But if we see cost of risk, we still expect around 100, 110 basis points. So this reduction in guidance is purely due to NIM moderation or there are any other moving parts also involved? And secondly, you mentioned this year, you're looking to exit few legacy relationships. So these are from contracting or any other sectors are also involved? So yes, these are my 2 questions.

So [ Shreekant ], just to understand your first part of the question was on the loan book, right? When you said that revised guidance from 7.5% to 5%?

Yes. So basically, I want to understand we are lowering our ROE guidance, our cost of risk guidance is still high around 100, 110 basis points. So this reduction in guidance is purely due to NIM moderation or any other factors are also considered?

Okay. So [ Shreekant ], I'll take the first part of the question, and the second part, I think, CRO can handle where you're talking about the -- asking about, sorry, the existing relationships. The ROE guidance, as I earlier explained on the call, the 5-year guidance was given around 2.5 to 3 years back. As we speak, we're working on the revised guidance for the coming 5 years. But having said that, we've worked for -- guidance for the coming year and the next year. And the revised -- sorry, the revision in ROE partly to do with the rates in the market, of course, and partly recalibration of our business model. So there are multiple aspects to it. And having said that, as earlier explained, we will come back with the 5-year guidance, and that will, I think, show you a more detailed view on our projections.

[ Shreekant ], this is Salman Siddiqui, again. If you don't mind, can you elaborate a little on the second part of your question?

Yes. So second part, I wanted to know, you mentioned this year, you will be looking to exit few legacy relationships, right? So just wanted to understand from which sector these loans you are looking to exit for?

Okay. So as I mentioned earlier, we've dived into the depth, so -- and have come up with strategies around the accounts that either post or can potentially pose a distress to the book. And what we've done is we've seen -- assess those relationships that okay, and these are across certain sectors. And primarily, this is -- as you mentioned, this is contracting and construction sector that where we see that there is -- the relationship is in the constant stress, we have worked out a exit strategy, which is well thought of and with minimal damage to the bank so that our growth trajectories do not get impaired rather than our ratio maintenance and coverage ratios that we are looking at. So yes, it could be the real estate contracting sector, but selective, very selective.

We have one more question in the Q&A. The bank has closed some branches in recent years. What's the management view to be the optimal number of domestic branches? And are there plans to close some more branches this year?

Okay. This is Dimitrios. I will take this question. As I said, the momentum and the aspiration is to close more branches and to keep a handful of branches in the country, but this depends on our digital penetration and what we're going to do because we have many also clients that require to have access to a branch. Now we go down to 13 from 21. There is a plan to reduce this amount by another 3 -- 2 to 3 branches in the next year-or-so. Now depending on the -- our plans to utilize latest technologies, what the regulator is actually allowing us to do with perhaps setting up a digital attacker. These are plans that we have in the plan, but we have to evaluate them, get also clearance from the regulator and implement. But again, we want to focus on having affluent branches. So we are closing the traditional branches that we have since we can cater for most of the transactions through mobile banking as we go through. And we're going to open a few -- a couple or 3 affluent branches across the key locations so that we can cater for this segment, which we believe is going to give us good fee income and good profit for the bank. So I cannot give you at this point in time, let's say, a specific amount of branches that we're going to end up in the next year-or-so. But again, the vision is to stay with a very handful number of branches, mainly focusing on affluent branches, be able to utilize the latest technologies, including the latest directive from -- and instructions that were sent out by QCB on digital attackers and how we can set up a digital bank. So this is part of things and our options that we have open to make sure that we utilize. And of course, we can actually, by that, reduce even more branches and have a handful number of branches. But again, as I said, will be affluent branches around the country. So we want to be less than 10 branches, that's for sure to have a single-digit number of branches. Again, the exact number will be quantified as we move ahead and working with the regulator and working on the digital absorption and penetration.

It looks like we don't have any more questions. So thank you, everyone, for joining the call today. And I'll pass the call back to management for any concluding remarks.

Thank you to the market participants, and thank you always to Janany for hosting and Arqaam Capital. Everybody I've seen on this list I've spoken to throughout the year. So please reach out to me for any follow-ups that you may have. Otherwise, we'll talk soon. Thank you, guys.

Thank you so much.

Thank you.

Thank you very much.