Dubai Islamic Bank P.J.S.C. (DIB) Earnings Call Transcript & Summary

Hello, everyone. Welcome to the Dubai Islamic Bank Third Quarter 2024 Financial Results Earnings Call. My name is Seb, and I'll be the operator for your call today. [Operator Instructions] I will now hand the floor over to Janany Vamadeva from Arqaam Capital.

Thank you, Seb. Good morning, good afternoon, everyone, and thank you for joining us today. This is Janany Vamadeva on behalf of Arqaam Capital, I'm pleased to welcome you to Dubai Islamic Bank's Q3 2024 Earnings Conference Call. I have with me here today from DIB management, Dr. Adnan Chilwan, the Group Chief Executive Officer; John Macedo, the Chief Financial Officer; and Mr. Kashif Moosa, the Head of Investor Relations and Strategic Communications. Without any further delay, I'll now turn the call over to Investor Relations. Kashif, over to you.

Thank you, Janany, and welcome, everyone, to DIB's 9-month results webcast by Islamic Bank. The session is led by our group CEO, Dr. Adnan Chilwan; accompanied by John Macedo, Chief Financial Officer; and myself. Request everyone to keep the questions coming through the e-mail provided [email protected], and they will then be addressed at the end of the presentation. So let's start with that. We now move on to Slide 4. As you can see, the quarter 3 has been quite an eventful year, where the rate cuts and oil prices both have changed direction. Brent oil fell by almost 16% over the quarter, closing at around USD 72 per barrel. And major economies across the world faced slower growth and demand, while federal reserve dropped rates by 50 basis points in September. Global growth is expected to remain stable, however, with global headline inflation expected to fall from annual average of 6% to 7% in 2023 to around 5.8% in 2024 and 4.4% for CASA for 2025. Closer to home, the IMF expects 2025 GDP growth in the UAE and Saudi Arabia to be the highest amongst the other GCC countries, at 5.1% and 4.6%, respectively, primarily driven by a rebound in acceleration in public and private non-oil GDPs. We now move on to Slide 5. The UAE's economy continues to exhibit strong current and future trends steered by implementation of visionary strategies, which is preserving the national identity, environment and sustainability, expanding bilateral trade deal and the development of the educational system. Dubai's population is on a steady rise as it has been projected to hit 4 million by 2026 on the back of strong inflow of expat professionals given the opportunity in this fast-growing and stable economy. Also the last couple of years have seen Dubai reduce its debt by about maybe $13 billion, as the economy has bounced back strongly after the pandemic with all sectors growing in a strong pace. The banking sector and financial markets continue to grow, with strong profitability and a rising index following continued trading and IPO activities in the domestic market. So with that quick overview, I will now hand over to Dr. Adnan Chilwan, Group Chief Executive, to take you through the full year financial results. Dr. Adnan, please?

Thank you, Kashif. A very good afternoon to everyone. As always, I will do a quick page-turn, touching upon key highlights on each slide, following which we can open the floor for question and answers. And ending the session by using the last 5 minutes to summarize everything we would have discussed in the hour. I start on Slide 7, where you can see that DIB has continued to deliver a resilient set of results during the 9 months of 2024. This is around both profitability as well as balance sheet metrics. The bank's focus orbited mainly around quality and structural sourcing. Having said that, balance sheet continued to expand and it has optimized by 4.7% on a year-to-date basis, reaching AED 329 billion driven by DIB's core business growth. The bank delivered financing and Sukuk Investments, and that was at around 7% year-to-date, outperforming year-end guidance which was set at 5%. Our gross new underwriting and sukuks during the year-to-date period equated to AED 69 billion, of which new consumer banking bookings registered around AED 19 billion, and these were up by 22% compared to the same period last year. Total routine repayments for both financing as well as sukuks came in at a steady pace, but early settlements came to the tune of around AED 17 billion year-to-date. Zooming into the P&L, I'm again pleased to announce we have delivered net profit of around AED 6 billion, which is up by 23% year-on-year. And accordingly, return on tangible equity is at 22%, which is up by around 200 basis points year-to-date. Importantly, quarter 3 2024 results for net profit is very strong at AED 2.3 billion, which is up by 32% year-on-year and 22% quarter-on-quarter. I'm also coming to you this quarter with a new update on asset quality, where we've successfully reached a settlement of one of the largest key legacy accounts, further supporting profitability, which underpins DIB's astute risk management strategy that I'll touch upon in subsequent slides. As a testament to our tireless efforts to continuously deliver our finance performance, I'm pleased to announce that Fitch Ratings has upgraded our viability ratings to BBB- from BB+, citing improved asset quality metrics, coupled with the bank's solid business. Another development that I'm glad to share with you is with respect to our ESG journey, where DIB has earned significant increases and upgrades in its external ESG ratings across multiple agencies such as Sustainalytics, MSCI, S&P and Refinitiv. One of the key ones of those, MSCI, has upgraded us to A from BBB. With that, I would like to move on and discuss our financial results, which have been remarkably outstanding. On Slide 8, which looks at balance sheet, digging deeper into the performance, I mentioned this earlier, we've delivered balance sheet growth of circa 5% to reach AED 329 billion. The bank's financing portfolio, as you can see, is up by 3.7% on a year-to-date basis, thanks to both advancements in the consumer as well as the wholesale portfolio. The sukuk portfolio has also increased by 16% year-to-date and stands at around AED 79 billion. Funding side, deposits have increased by around 6.7% year-to-date, and these have been supported by both consumers as well as corporate relationships. Deliberate efforts to reduce our investment property portfolio, and we've seen good traction there. In terms of return ratios, both ROA as well as ROEs have outperformed our year-end guidance again, and hence, we remain securely positioned, vis-a-vis, our commitment to shareholders. Moving on to Slide 9, a look at our financial performance in terms of income statement. Again, a very robust picture of the P&L. Total income has witnessed 16.8% increase year-on-year to reach around AED 17 billion. The bank's net operating revenue is up by 6.3% year-on-year over the period and that has reached to around AED 9 billion. We've delivered net profit margins of around 3%. OpEx has been up 13% year-on-year as we ensure optimal spend, while looking to grow and strengthen the group over the next few years. As a result, the cost-to-income ratio is up by 160 basis points year-on-year to end at 28.1%, but still among the very best. You can look at the impairments line. Impairments over the period was significantly down by 62% year-on-year and it reached to around AED 530 million charge for the first 9 months on the back of settlement of some key legacy account and an improving macroeconomic environment in the UAE. Additionally, on a quarterly basis, the bank booked reversals of around AED 123 million due to the same reasons. So year-to-date, on a 9-month basis, the cost of risk now stands at around 26 basis points when compared to 57 basis points same time last year. On Slide 10, in terms of profitability and the cost structure. In this slide, I would like to highlight the main contributors to our net operating revenue. Our non-funded income recorded a healthy increase of 31% year-on-year. Now this rise is attributed to higher income from investment properties, sale of properties, certain income from associates and some other small line items included within the other income line. Considerable amount of OpEx can be attributed to strengthening the control functions, and hence, OpEx has increased by 13% year-on-year with the bank's strategic investment plans for customer-centric technology update, talent acquisition as well as retention. Now I've already mentioned the cost-to-income ratio accordingly is registered at 28.1%, which is up 160 basis points year-on-year and 140 basis points quarter-on-quarter. All of the above has led to a solid 23% year-on-year increase in net profit for the first 9 months, and this has ended at AED 6 billion. And for Q3 specifically, it is at AED 2.3 billion, which is up by 32% year-on-year. On Slide 11, we'll look at deployment of our funds, effective rebalancing of the balance sheet with prime focus on deployment within earning assets has always been the key. And that key -- that has continued during the first 9 months of 2024 as well and will also continue for the remaining part of the year. Having said that, bank's assets have grown by 4.7% year-to-date to stand at AED 329 billion, mainly supported by the financing and sukuk portfolios, with financing portfolios growing by 4% year-to-date and the sukuk portfolio growing by 16% year-to-date. On a combined basis, we've seen a growth of around 7% year-to-date. There has been robust growth across all our businesses. As you can see from the upper right chart, and this is driven by healthy business volumes as well as pipeline. Important to mention that our gross underwriting across all these businesses came in at AED 69 billion year-to-date. Sukuk Investments have now reached close to around AED 80 billion, primarily composing of large corporates, sovereigns, financial institutions within as well as outside the region. Slide 12 looks at our consumer banking business. The portfolio continues to show positive trajectory, it is up by 9% year-to-date and stands at AED 61 billion. This is led by higher pickup across all our products, specifically in auto financing, in personal financing as well as in home financing. Credit cards have also witnessed a significant pickup over the year-to-date period, supported by bank campaigns as well as various product mix. Across all our products within the consumer bank, we've booked gross new business of around AED 19.5 billion during the first 9 months versus AED 16 billion in the first 9 months of 2023, and ratio terms that's up by 22% when compared to the corresponding period in 2023. Despite routine payments of around AED 14.4 billion, the consumer portfolio exhibited positive growth for the period of almost AED 5.1 billion in the first 9 months. Yields have expanded by 33 basis points in the consumer business, and they stand at 7.03%, underpinning a very healthy profitability. On a year-to-date basis, our consumer deposits have increased by 2%, and they stand at AED 90 billion, while the CASA mix within those deposits are stable at around AED 47 billion. Slide 13 looks at our corporate banking business. This portfolio stands at around AED 146 billion, which is up by 3% year-to-date. The bank continued deploying funds to several industries, and prominently growing on a year-to-date basis within the automobile sector, manufacturing, oil and gas as well as utilities. Important to highlight that gross new corporate financing, the underwriting that we've done in our corporate banking business in the first 9 months, stands at around AED 33 billion. That said, revenue trends continue to be on an upward trajectory within the corporate business. And revenues from the corporate business are up by almost 5% year-on-year. Yields on the other hand, have expanded by 31 bps and they stand at 6.7% year-on-year. Corporate deposits overall were up by 11% year-to-date. Corporate CASA specifically has grown by around 27%. And on a year-to-date basis, the bank continues to attract strategic operating accounts. If I turn the page to Slide 14. The treasury portfolio, primarily the fixed income book, has expanded to reach AED 79 billion, very close to AED 80 billion, up from AED 68 billion at the end of 2023, and that signifies a growth of 16% year-to-date. This has been a part of our deliberate strategy that I alluded to at the beginning of the year to book long-term assets in the current high rate environment. Now nearly 3/4 of that sukuk portfolio is sovereign in nature, while 90% of the remaining is investment grade or above underpinning very high quality. Within treasury book, within the fixed income book, the yields have expanded by 18 basis points year-on-year to stand at 4.8% due to the incremental Sukuk Investments carrying higher coupons over the past 12 months. Revenues also depicted strong performance over the year, picking up by 25% year-on-year to reach AED 1.9 billion. Slide 15 is a slide that I referred to at the beginning of my presentation. It looks at asset quality. Nonperforming financing ratio has improved by more than 110 basis points and stands at around 4.27% year-to-date, supported by resolution of a few cases in the first 9 months. As a result of the provision release associated with these accounts, within this quarter specifically, our cash provision coverage ratio has registered around 97%, up by 700 basis points compared to full year 2023. Impairment charges for the first 9 months has fell significantly by 62% year-on-year and they stand at AED 530 million. Now this, of course, accounts for certain provision releases that we have done in the first 9 months. And hence, our cost of risk has also come down. It has come down to around 26 basis points from 57 basis points. Clearly, that shows you the level of provisions that we have made during the quarter or the first 9 months as well as the recoveries that have offset those provisions, and we stand at, I would say, cost of risk of around 26 basis points for the first 9 months. On Slide 16, we are looking at the same asset quality, but by stages. Post the settlement of legacy cases, Stage 3 financing has dropped by 4.6% year-to-date, and that stands at around AED 11 billion in absolute terms and the coverage has remained stable at around 68.3%. Stage 1 financing on the other hand, has improved inching up 5% year-to-date, while Stage 2 exposure has dropped by 13% year-to-date due to accounts now deemed not past due. Nonperforming financing, adjusted with certain large accounts that we have now settled, certain legacy accounts which have seen settlements and recoveries in the first 9 months. Slide 17 looks at our funding sources and liquidity. Liquidity of the bank continued to remain intact with LCR ratio of close to around 140%. CASA now stands at AED 91 billion. It's up by 11% year-to-date, and it comprises of around 39% -- roughly 39% of our liabilities. Slide 18, I look at our capitalization levels. They remain robust with CET1 at 13.9%, which is up by about 110 basis points year-to-date. And capital adequacy ratio stands at 18.3%, up by 100 basis points year-to-date, both well above the minimum regulatory requirement. As you can see, the total equity position stands at around AED 47 billion. Slide 19. Our digital strategy continues to support our growth. We continue to make remarkable progress on the digital front, with strong growth across key metrics in the utilization of our digital platforms. You can see that majority of our active customers are now registered digitally, and they also are able to utilize the convenience and enhanced customer experience of our digital services. We've reached a milestone within our WhatsApp digital subscriber base. Now we are close to around 200,000 subscribers, which is strong growth of around 61% year-to-date. You can look at that bar chart at the bottom of the slide. Of course, at DIB, we ensure that we continuously evolve to lead in the digital space, and we continue to make investments in our platforms to support our strategic growth ambition. Slide 20 is a slide on our sustainability and ESG initiatives. We continue to make strong progress in our ESG ambitions during the year. The quarter saw the bank's ESG ratings move towards stronger directions by most of the ESG rating agencies. The agencies have recognized good progress that we've been performing. And our enhanced disclosures and increased transparency in our reporting has ensured that we have made good progress against our ESG strategy. Now across the aforementioned agencies, as you can see in the middle of the page, Sustainalytics, S&P Global, MSCI and Refinitiv, DIB has experienced the largest rating bump for any UAE bank. This clearly shows the robustness of our ESG strategy in setting high level of sustainability standards across our operations. On that page, other key highlights would include -- we are pleased to share that our ESG asset portfolio continues to rise with 20% growth in sustainable financing assets year-to-date. On Slide 22, it's our comparisons against key guidance that we gave at the beginning of the year. You can see that we have made excellent progress across the 8 metrics. We start from the bottom. The return on tangible equity is at 20% when compared to our guidance of 18%. And this is obviously post tax. On a pretax basis, we are at 22%. When you look at cost-to-income ratio, we are at 28%, roughly. We are confident that we will be closing the year very close to 27%. Our total coverage has increased, stands at 132%, and it's better than the year-end guidance. And I can anticipate that this will only continue to enhance as we move forward. Our net profit margin is in line with our guidance at 3%. Return on assets is better than our guidance at 2.3%, and this is on a after-tax basis. On a pretax basis is at 2.5%. Our nonperforming financing, like I've mentioned in the asset quality slide, we've done very well. This is not just a result of our denominator increasing, but more importantly, our numerator decreasing, and we stand at a nonperforming finance of 4.27%, which is lower than 5% guidance. Net financing and growth, if you remember on the second call, I had mentioned that we anticipate Q3 is going to be good pipeline and we'll see that pipeline materializing. That is exactly what has happened in Q3. We've now reached our financing and sukuk growth to around 7% when put together, which is higher than our year-end guidance of 5%. And I did mention that depending on how Q3 pans out, we will come back to you on that call and we will decide whether we want to change that guidance. So I can now confirm to you that we are changing our year-end guidance to be at around 10% or more because we've already achieved around 7% year-to-date. Having said all of this, I now pause. We will take question and answers. I tried to run through the slides as fast as I could in order to give you enough time to ask us questions. And then I'll use the last 5 minutes of the hour to summarize some key messages.

Thank you, Dr. Ladies and gentlemen, just bear with us for a moment as we shift through the questions that have come in. Thank you.

[Operator Instructions]

So we've got the first set of questions from Janany. The first question is on the cost of risk outlook in context of the new credit standards. The second is on the sensitivity of 25 basis points interest rate movement to the overall profits. And the last one is on the cost of risk guidance for the year.

Janany, thank you for your questions. Well, the credit -- the new credit risk standards are clearly going to be implemented soon, probably next year, of course. The standards have seen the draft stage pass. But remember, they need to be formally announced. And then after that, they would be gazetted. But that would take some time. As of now, we are running some simulations to make sure that we take into account the impact of those standards. So hopefully, by the next call, we should be able to give you some color on that. In terms of sensitivity on rate cuts, we've always mentioned that a 50 basis point rate uplift or rate cut would change our P&L by about AED 100 million to AED 125 million. So that's a 50 basis points rate cut, so you can actually do the math. Outlook for margins in 2025, clearly, I think towards the end of the year, once we have our results, we will definitely come and give you guidance for the next year. And that's -- I'm just following the format that we do every year. But I can give you some early peek into that. We expect our margins for 2025 to go up. What that would be, you would have to just wait for us to close our results and also do some planning, and we'll give you that probably in our January call. Finally, any growth or cost of risk guidance. Again, let's not get ahead of ourselves in terms of 2025. But I can tell you one thing that in cost of risk, I anticipate our normal cost of risk for 2025 to be at 70, 80 basis points. That's normalized cost of risk. It does not take into account recoveries and settlements, if any. And in terms of growth guidance, again, too early to talk to you about 2025, but you can take a cue from the fact that we have revised our guidance upwards for 2024, which stands at around 10%. So you can understand probably where the direction of travel is, but we will probably come to you in January and give you better color on where the 2025 year-end guidance.

[Operator Instructions]

So we're going to take some questions Chiro that have just come in. The first one is what comprises the other income category?

So do you want to take all the questions, and then I can answer.

And the second one is on the income from investment properties, can you shed some light on those. And the last one that I think Dr. you've already answered, is on the NIM sensitivity for the '25.

Yes, we can see a lot of questions on NIM sensitivities, on our guidances for 2025. So we are actually going to skip that. We'll probably cover that on our next call. But Chiro, thank you for your question. On other income, our other income comprises -- and that's come well, that comprises of income from our subsidiaries that have done well, subsidiaries and associates. It's income from sale of certain real estate assets that we were carrying for a very long time, and also some income from sale of our sukuk book. All in all, put together, we've seen good traction, and that has added to that line. Your second question is around income from -- higher income from investment properties. Yes, this is on account of the sale of certain real estate assets. If you remember, we alluded to this at the end of last year, saying that we will take advantage of the good real estate cycle within the country. We are sitting with certain assets that are investments in properties on our book, and these have been on our book for a long time. There was never a desperation for us to exit that. We always wanted to make sure that we make maximum -- we take maximum gains out of that. So this has been a good opportune time for us to exit that, and that has just added to our income from investment properties.

[Operator Instructions]

All right. So we've got some questions from Shabbir. He's talking about -- since the capital position is strong, what do you think of the dividends? And should we look at them? Also on the deal with GEMS, how did we manage to submit big share and lead the transaction? At what triggered the provision recovery? And what's the view on the noninterest income or -- being a little weaker relative to the early quarter?

Thank you, Shabbir, for your questions as always. Capital position definitely is strong. And that strong capital position would only suggest that it supports future growth. Of course, it also gives us the ability to look at dividends. Again, it's too early. We need to close our full year results. We need to look at what the results are. We also need to project our growth ambitions going forward and then come back to the market and talk about what dividends are going to be. So I think it's just a bit too early. We are probably 4, 5 months ahead of ourselves here. In terms of the deal with GEMS, yes, as you know, we have led this landmark transaction, and it is probably one of the biggest transactions within the region, within this sector. What has led us to have a leading share? Clearly, we've leveraged our balance sheet. We've shown our expertise in structuring a mega deal like this. So we have literally led this indication. And we've also made sure that a good portion of that sits on the bank's balance sheet in order to contribute to future annuity. That has also helped us generate good fee income for the bank. And you will see us, similar to this transaction, you will see us trying to win landmark transactions going forward. Now this is something that we've invested in the last year or 2. And now we are just seeing that materialize on our balance sheet. In terms of provision recovery this quarter, I mentioned -- you probably missed it, I've mentioned that we have settled a very large legacy account. And that has moved from our nonperforming loans. It has come out. Obviously, we carried a very good level of provisioning on that account. So we've only reversed a part of that. We still carry certain provision on that account. So definitely, we will try to relook at that and our position probably closer to the year-end, and that would also allow us to enhance our P&L even further. In terms of noninterest income, a bit weak relative to earlier quarters. I think you're just referring to quarter 2 versus quarter 3. Again, I wouldn't say a bit weak. I would say that you have to look at a year-to-date position because it's a reflection of how pipeline materializes. So maybe at times, pipeline materializes differently, and it's not as consistent as one wants. On a year-to-date basis, we've seen some very good fees, and I think that's what we should be focusing on. Again, between Q2 and Q3, it's just a reflection of what has materialized, what is in the pipeline and what will materialize going forward.

[Operator Instructions]

Okay. So a question from Osman from Al Ramz on the advances in third quarter that has picked up and depicted fasted Q-on-Q route. So can you provide an outcome on the advances growth going forward?

Definitely, I've already mentioned that, but I don't mind repeating it. We have seen a faster growth quarter-on-quarter when compared to the other banks. On a year-to-date basis, this growth would have been completely different had we not witnessed early settlements. Because if you look at the gross underwriting that we did across all our businesses, that were to the tune of around AED 69 billion. You take out the normal repayments, which were around AED 33 billion. But we were dwarfed and dented by about AED 17 billion of early settlements. Now had that not happened, our growth story would not have been 7%, it would have been in higher double digits. Having said that, we definitely have seen some Q-on-Q, quarter-on-quarter, growth faster than others. And that outlook translates to us revising our guidance for 2024. The guidance for the full year used to be 5%. We currently stand at around 7%. So we've revised that upwards and we stand at around 10%. Having said that, you know where the direction of travel is for 2025. The more accurate number and percentage growth would be given to all our colleagues and our friends in probably the first call of 2025. So please just bear with us, be patient. We are just trying to follow a template that we follow, and it's just exactly what we do every year, we come in January, we closed the results for the preceding year, and we also gave guidance for the full year. But I can tell you that the direction of travel is in the right -- is issuing right trajectory.

[Operator Instructions]

Okay. So we've got a few questions from Aybek. So the first one is on the -- to the extent of change in asset mix towards consumer, how would it support and shield NIMs? And the second one, Aybek, has already been answered, so I won't touch upon that. The third one from you is on the percentage of funding repricing within 3 months following a rate cut.

Thank you, Aybek, for your questions. As always, your first question is around the change in asset mix. And I think specifically you're referring to the consumer business now being 30% of the book, and the corporate or the wholesale business has come down because, clearly, consumer business is growing faster. And that would, as you rightly mentioned, would shield our net interest margins from lower interest rate cuts. But let's also not forget, it's not just the consumer business. As you remember, I articulated a strategy at the beginning of the year where we said that we are, given the higher for longer environment and with anticipated rate cuts that would, at that time were being envisioned towards the end of the year, we said that we want to book our fixed rate business. And that was not only consumer but, also our fixed income book. And that's exactly what we have done in these 9 months. So you can see that our fixed income book, our sukuk book has gone up by about 16% year-to-date. So let's not forget that. That also allows us to shield the reduction in interest rates, which would impact our asset size of variable -- of our variable book. So it's a combination of consumer book which has gone up by 9% year-to-date, and our fixed income book that has also gone up by 16% year-to-date. So you're absolutely right. Both these businesses would allow us to make sure net interest margins are intact. And that's the reason why I certainly made the point that we expect our net interest margins to go up in 2025. What that would be in exact terms would be something that we have to wait until we come back to you in January 2025. Now in terms of what percentage of funding reprices within 3 months following a rate cut, and I'm presuming that you and I are on the same page and we are talking about our liability book being repriced. Our liability book, when we look at our average liability, they are repricing between 6 to 9 months, and I don't anticipate a 3-month liability reprice. And we've always maintained that position, as you know, we have a lag in our liability repricing. Our assets get repriced faster. And as far as the liability is concerned, it takes us about 6 to 9 months. And the reason for that is very simple because roughly around 60% of our book are in fixed deposits. And these fixed deposits in terms of term maturities are 6, 9, 12 months, right? So that would then mean that with any rate cut, it would take us at least 6 months for that to get baked in. And hence, it also gives us this advantage, that I've alluded to on our asset side, focusing on our consumer business, focusing on our fixed income business, which we've done in the first 9 months, will allow us to maintain or even enhance our net interest margins.

[Operator Instructions]

So there are a number of questions pretty similar nature. So we're just going to -- I'm just going to plug one at least for the Dr. right now, which is around the international strategy and international plans. And early part of the year, we saw some GCC funding that happened. So do we -- would be in a position to continue and what is the strategy for it?

Yes, of course. I think, yes, we can see that question repeating itself. So I think we've got a cross-border strategy and it worked very well for us in 2023 as well as in the first 9 months of 2024. So that strategy has only continued to gain momentum and we see a better traction there. So we are looking at cross-border transactions. We've got a strategy that is that is hinged towards our expansion of credit in the GCC regions, Saudi, specifically, Bahrain, Oman, Qatar. So we are going to continue expanding on that. And we would look at extending our balance sheet in these markets, typically focusing on sovereign and quasi sovereign. We've not gone into the corporate space as yet because there is enough appetite and room for us to go within that space. That also allows us to diversify our concentrations on our balance sheet, on our asset side. They allow us to bring balance to our risk ratings on within our portfolio. So you will definitely see us expand on that front, specifically across GCC and at times across the MENA region. Now this would mean making sure that we focus on entities that would have a very sound credit rating or implicit and explicit government support within some of these regions that I've mentioned. So yes, we would continue to do that. And in terms of sectors, Again, we would try and export the model that we followed within the UAE and look at sectors like aviation, logistics, hospitality, telecommunication, utilities. Again, we'll try to make sure that our cross-border pie is as colorful as our UAE pie when it comes to our wholesale business.

So another tough question again around the international current and future plans in terms of entities or any expansion extending the geographic footprint outside.

Yes. I think that's apt question, and I can respond by saying that no specific new geographies planned for us internationally. But clearly, we want to make sure that we focus on the points that we have plotted on the map. And by that, specifically, I mean the big region in Pakistan, Indonesia, Kenya, and now also our investment in Turkey, which is, albeit, digitally. Each of these geographies that I have referred to are at various stages of their maturity. So for example, in Pakistan, we have a mature operations on the ground. In Indonesia, profitable operations on the ground. Kenya, we started to see quarter-on-quarter breakeven. And in Turkey, our latest investment internationally, we have seen some record numbers and that continues to go in the right direction. But more importantly, it's just not about our growth in these markets. So our strategy, clearly, which takes a page from our overall Group strategy. As you know, when we put our overall Group 5-year plan, we spoke about two distinct pillars, and that was not just grow the Group, but also strengthened the Group. So we've done that well at home in the UAE, and we are only going to now take that forward within our international geographies. We are going to invest in our control functions in all these geographies. We are going to make sure that we invest not just in processes, but also in people and in technology. And that would then make sure that we continue to enhance those operations, but also do that in a very stable manner by focusing on our support functions as well as our control functions. Now having said that, I think I'm coming to the last 10 minutes. And as I have mentioned that I will be summarizing my call. I can see that there are more questions, but some of a similar nature, but some unique ones. We are running short of time, so our Investor Relations teams will get in touch with you in order to answer some questions which have not been answered. But again, as requested, these last 5 to 10 minutes of the hour allows me to kind of wrap up for the first 9 months, allows me to wrap up this hour that we've spent together. And I would like to end this hour by summarizing our year-to-date performance and also focus on five key areas. Area number one is our core businesses. Now I've already mentioned this that all of our core businesses continue to flourish. Our engine is well oiled and it's running seamlessly. Now this has been demonstrated by our gross underwriting of close to AED 69 billion, like I mentioned before. Now this reflects the bank's ability to generate good business as well as grow in a very overcrowded market. If not for the early settlements, which will eventually settle down as we go forward, if not for those early settlements, the bank would have recorded an even higher asset growth and that would have been in double digits. Nevertheless, based on that, we have enhanced our year-end guidance, and that stands at around 10%. The second area is P&L, and that continues to be robust. Our gross income is on the rise, and it is supported by growth in our core engine, as I've explained earlier. Our fee and other income will also support the P&L as we move forward. Now it is important to note that the profit continues to be on the rise quarter-on-quarter. And this is validated by our growth strategy that we've put in place and it only allows us to believe that we are going to put our best foot forward. And as we progress in subsequent quarters and even as we embarked on our 2025 journey, numbers which we will release to you in January 2025, we know that we have a robust P&L and quarter-on-quarter growth means that you would only see more of the same. The third area is asset quality. We've seen remarkable progress made during 2024 to resolve legacy accounts. Now this has resulted in absolute amounts of NPLs reducing significantly and also positively impacting coverage ratio. So that will only continue, and we will see our asset quality only improve from here. With our denominator growing further and a numerator coming down, we will see that we would make very good progress here. And that would then also have a very positive impact on our coverage ratios. Area number four is our transformational programs. Over the past 2 years, the bank has invested significant resources in strengthening the Group, a strategy that I had alluded to in 2022. And it's a 5-year strategy that cuts across -- starts in 2022, cuts across the years and ends in 2026. Now these programs involve investments in people, processes and technology. And at the end of quarter 2, we have successfully implemented our new systems. And by that, I mean our core banking systems as well as our [ GL ] platforms. These implementations are intended, obviously, to support the bank's growth plans, both organically and inorganically for the foreseeable future. Now we've spent considerable amount of quarter 3 to stabilize these platforms. And I can say that we are almost close to the desired state of stabilization. Now area five, finally. We see good traction during Q4 across all our key metrics and we are anticipating a very strong close to the year, which should culminate in outstanding results in terms of growth, quality as well as profitability. With that, I come to the end of my hour. I thank you for listening in. And I think you should expect the bank to move in this very positive direction that we've seen in the first 3 quarters, and we are anticipating a very strong close to the year. With that, I hope that we'll be able to get on more calls like these as well as probably meet you in some part of the world as we do our non-deal as well as deal road shows. Thank you.

Thank you, Dr. Thank you, ladies and gentlemen, and we hope to -- we look forward to seeing you again on the next results.

This concludes today's call. Thank you all very much for joining.