National Bank of Bahrain B.S.C. (NBB) Earnings Call Transcript & Summary

[Foreign Language] Dear NBB Group shareholders and stakeholders, and welcome to our investors meeting that is going to demonstrate our financial and nonfinancial results and accomplishments for the fourth quarter of the year 2025. We are delighted to conduct this meeting after we have recently published the group's financial results in addition to the acquired documents that were uploaded on both the bank and Bahrain Bourse's websites. Representing NBB Group in this meeting as speakers are the Group Chief Executive Officer, Mr. Usman Ahmed; the Group Chief Financial Officer, Mohsin Rahim; and the Group Chief Strategy and Sustainability Officer, Zaina Zayani. My name is Hisham, and I am NBB's Chief Corporate Communications Officer. I will be the meeting's moderator, and I would like to make a few points before we start. One, this meeting will be conducted in English language. Number two, the presentation of this meeting has been published on Bahrain Bourse's website as well as the bank's and all questions and comments are welcome, but they will be required to be written in the specific areas. We will now start the investors meeting with NBB's Group Chief Executive Officer, Mr. Usman Ahmed. Usman, the floor is yours.

Thank you so much, Hisham. Good afternoon, [Foreign Language]. A very warm welcome to everyone for our fourth quarter and full year investor presentation. As we mentioned in our last quarterly update, we have been seeing strong momentum across our key business lines and geographies, and I will elaborate a little bit more on how that momentum was sustained and built on during the last quarter. So overall, we closed a very successful year with -- as you are aware, with a growth in net profits of 4%. This is on the back of having grown 4% the year prior to that as well as 16% in the year before. So continued growth momentum. But more importantly, I think if you look at our key business lines, in our retail banking business in Bahrain, our loan growth was roughly about 7%. It was significantly led by growth in the mortgage portfolio as well as in personal loans and deposits also grew by a healthy 4%. We've been very focused on attracting the right mix of liquidity and our focus on the price account as well as workplace banking solutions and proposition has helped us to attract more low-cost deposits. This is particularly relevant to address headwinds around NIM compression for all banks as interest rates continue to come down. We are also very focused on introducing new value propositions for our customers, and these manifest themselves in the form of new products that are focusing on particular segments. Earlier in the year, we doubled down on retail SME as an example, we've revamped our customer experience around account opening for new-to-bank SME customers. We set up 6 new SME centers around the island, and we continue to develop more ways for customers to engage with us digitally as well. As of this -- as of last year, 95% of our new retail banking accounts were actually opened digitally without any sort of human intervention. So that just shows how focused we are on providing convenience as well as what sort of adoption we are seeing from our customer base on new products and new innovations and solutions. It has resulted in a 43% growth year-over-year on digital transaction model in the retail bank. On the corporate side, it's a very similar story. Our corporate loan business has grown by 5% and overall, our corporate deposits grew even -- at an even healthier pace at 9%. This includes corporate and commercial banking deposits. We see significant market potential in this across all 3 markets in Bahrain as well as in UAE and Saudi. We are also very focused on loan growth, but prudent loan growth that is accretive from a NIM perspective as well as accretive from a portfolio quality perspective. And we're complementing that with new products and solutions that help our clients manage their treasuries and manage their cash flow and working capital more efficiently. So as an example, we've launched supply chain financing. We've also launched, as we elaborated earlier in previous quarters, now a more comprehensive suite for 24/7 U.S. dollar clearing. And then host-to-host connectivity for corporate clients is something that we've introduced, which allows them to do file payments and uploads working through NBB's digital online banking platform for corporates. So overall, this has resulted in a 10% growth in digital adoption and roughly about 18% growth in transaction value that has been driven by digital innovation. And we are looking at continuing to add to these features as we go along. So just more broadly speaking, if we go to the next slide, please. We've also been very keen to develop new business lines and wealth management is one such business line to complement our very strong retail business and to complement our strategic accounts business, which is where we've historically catered for individuals in the high net worth and ultra-high net worth segments. We've launched a wealth management value proposition. This wealth management business aims to position NBB as a preferred partner for high net worth and ultra-high net worth clients by providing them solutions that enable them to invest across different asset classes, both in Bahrain, in the region as well as more globally. We've also introduced a suite of structured deposit products that offer different levels of principal protection with different sort of underlying themes for customers to be able to invest, knowing that a certain baseline principal protection is already available to them. These solutions have contributed to the healthy growth in fee income, which we will talk about as well, and they really are proving to be very relevant to position us as the trusted long-term financial partner for affluent customers. Alongside the wealth banking product capability, we've also established a new department this year for private banking. And again, working alongside our existing product and technological capabilities, we're very confident that we'll be able to make significant goals in this very key segment. Abroad, we actually have had very strong loan growth in Saudi Arabia. I think the market conditions in Saudi are challenging from a liquidity perspective, but that has also played favorably for banks like us where local clients are much more receptive towards engaging in new relationships with banks that they have got historically dealt with. And so we've seen good growth in Saudi. We are remaining prudent as we expand balance sheet as always, in select sectors. And in particular, we have been extending quite a lot of balance sheet in the Eastern Province where we see a lot of relevance of expansion given the geographic proximity. And we've expanded our capabilities there to be able to offer corporate banking solutions in the Eastern Province from Bahrain. The UAE market continued to see sustained and profitable growth through the launch of new products as well as new business segments. We've initiated a certain transaction banking functionality there around the real estate sector, dealing with escrow accounts and the like. And also, at the same time, we've launched an SME, a liability-centric SME business during 2025 in the UAE. Our corporate relationship business in UAE continued to grow. We had earlier introduced corporate online banking. We've seen very strong adoption there as well. And we are also seeking out strategic partnerships with fintechs that allow us to, in partnership with fintechs, have a much more enhanced value proposition for certain specific niche segments in the market. We're very pleased and very proud of the performance of Bahrain Islamic Bank. As you know, Bahrain Islamic Bank historically has gone through a bit of a challenging period in the last few years. But through the support that NBB has provided both in terms of its balance sheet as well as oversight and capabilities, we have turned the corner in BisB. BisB saw 207% (sic) [ 270% ] year-over-year increase in profits which included a 44% increase in the profits of the core business. And there was also one large one-off transaction that we completed in the first quarter of last year, which significantly contributed to the bottom line. But it's particularly pleasing away from that one-off to see the growth, strong double-digit, almost 50% growth in the income generated from the core business. As a vote of confidence in our BisB subsidiary as a sign of commitment to Islamic banking and as a reaffirming of our unflinching support to the subsidiary, we have increased our shareholding in BisB. This happened after the end of 2025. In fact, in February 2026, we've reported an increase in our shareholding in BisB from 78.81% to 80.21%. So in summary, when I close on the business highlights, we will continue to deliver on our execution road map in 2026 and build on our key priorities, which essentially include accelerating share of wallet growth with our customers, improving our client experience end-to-end. We recognize that we are a preferred banking partner for several of our key relationships, but we are on a path towards continuous improvement, and we will continue to deliver on this promise. We are also reinforcing our commitment towards NIM resilience as well as profitability, as you saw and as we will elaborate later on, the fourth quarter saw a strong performance on both our NIM as well as on growth on a year-over-year basis. And last but not the least, we would like to continue to also sharpen our commercial intensity as we move forward with execution of our strategy. Just a very quick update on the merger process between NBB and BBK. As we've been reporting regularly in the press on a monthly basis, the due diligence activities continue to progress, and they are progressing in line with the agreed time line between both counterparties with strong engagement seen across all key work streams. The core work streams covering financial, tax, operational, IT, legal and commercial due diligence are in full swing. And there's close ongoing coordination between the NBB and the BBK teams as well as all the external advisers that are involved to ensure strong alignment and momentum as we progress and move forward. We have also jointly appointed McKinsey as the commercial due diligence adviser and their work is also currently underway as is the work of the -- under the legal work stream. So just to recap on the next slide, you will see that, as we mentioned previously, we believe that this transaction would create an enhanced Bahraini National Champion Bank and NBB and BBK together will provide a platform for accelerated growth over time for -- through an institution that will have a much more strengthened customer value proposition for all segments that will have further capacity to invest in digital transformation and that will have significantly greater regional relevance through our complementary regional networks. This also will give us increased scale and balance sheet strength, and that deeper investment capacity, as I mentioned in the context of technology will also apply to being able to do more significant transactions, both in Bahrain as well as reasonably to drive economic growth and development. The product mix, the business mix, the network is complementary. And of course, we would gain access to a broader pool of skilled and experienced talent that would also be very, very valuable towards not just our Bahrain growth plans, but also more broadly in the region. So we believe that for all stakeholders, this proposed merger has a strong potential to deliver enhanced outcomes. whether it's to drive economic growth and development in line with Bahrain's economic vision or deliver continued sustained stronger returns to shareholders over a period of time, providing greater career and development opportunities to our colleagues as well as ensuring that for our customers, our most important stakeholders, we have a full product suite and expanded digital offering from even what we are able -- what we've offered to them historically. So with that, I'll be happy to take any questions later on towards the end of the session on any of the business highlights or the merger, but I'll hand it over to my colleague, Mohsin to talk about the financial highlights.

Thank you, Mr. Usman. There are, in fact, 3 questions already. But as you have mentioned, we will answer them towards the end. So thank you very much, Mr. [indiscernible], and thank you very much, Mr. Ali Hassan for asking those questions. Our group Chief Financial Officer. Mr. Mohsin Rahim, the floor is yours.

Thank you very much. Thank you, Usman. I will take you through the financial highlights, which are on Slide 7. This slide gives you a view of Q4 as well as full year profitability as well as our operating income. Our profitability is up 4% on a full year basis from BHD 81.9 million to BHD 85.1 million and also our Q4 had a strong performance and went up 12% from BHD 16.2 million to BHD 18.2 million. This is driven on the back of NIM expansion measures we took last year, specifically in the second half of 2025. With respect to operating income, we had a strong fourth quarter and the growth is about 16% -- and consistent with the attributable profitability growth, the full year operating income also went up 4%. If you move to Slide 8 of the deck, that provides you a Q4 income statement trajectory and review. And that tells you that we have the attributable net profit we get to that number. So if you start with the extreme left-hand side, the net interest income, as I mentioned, we grew our interest income by about 3% and we brought down our interest expense by 5%. So that gave us a good tailwind as part of our NIM expansion. And some of the things that we have done is how we have optimized our portfolio, more specifically reallocating our investment securities into higher yielding but risk appropriate portfolios. Similarly, we focus on our deposit pricing as well as the quality of the loan growth coming in from various products. So that sort of helped us in improving our net interest income and growing it by 15% on a year-over-year basis. Our other income increased as well by 22% is driven by strong client fee income, profit on FX and treasury related activities. And since we have strong income -- operating income in totality, we are not surprised by the expense growth. We brought down expenses last year, but as we continue to invest and expand our balance sheet as well as the businesses, more specifically some of the commentary you may have heard from our CEO in terms of our investments and growth in the wealth management area, we are taking advantage of that and trying to modernize our infrastructure to support the product expansion as well as building other ancillary businesses that we have -- which are very critical for our growth targets. With respect to new NPL that came in, we took a buffer of about BHD 1.3 million in the fourth quarter. And subsequently leading up to the profitability we have a 12% growth in the fourth quarter. Moving along. If you go to Slide 9 of the package, you will see the full year income statement. On the left-hand side is the net interest income. As I mentioned that we start to take active measures in the second half of 2025 and that pushed up our NII higher in the second half of the year. However, we remain sort of flattish from BHD 143 million to BHD 141 million on a year-over-year basis with respect to the net income -- net interest income. However, let me -- allow me talk about the other income growth. We have -- other income performance is outstanding. We have increased our other income by BHD 16 million over a 2-year period, and it's driven by client fee income, treasury and other onetime gains that we experienced in 2025. You may notice the growth of 22% is on the back of the 13% last year. So again, a very commendable approach and performance from our standpoint. Operating profit is just an aspect of all the 3 elements. Operating expenses on a full year basis was well under control. As you may notice, we kept the growth in expenses at 5% when we look at 2024 versus 2023 and 2025 versus 2024. And we took a lot of active and prudent measures to make sure we manage our expense growth effectively and efficiently to support the business. In terms of the lower provisions that [indiscernible] what we said is [indiscernible] around BHD 9 million and we had a lower number back in 2023 as the portfolio was not as big, but we are making sure that we have adequate coverage with respect to our loan exposure. At the end of the day, what we have done is that we have consistently delivered for our shareholders a 4% growth [indiscernible]. Key ratios, if you're moving on, remain very [indiscernible]. As you can see, our return on equity is north of 14% and strong performance in '25 pushed it up to 15%. Similarly, the return on assets as we grow the balance sheet and the mix of the balance sheet also is a driver of our return on assets as we diversify our balance sheet across the various geographies. So we still remain healthy at 1.5% level for our return on assets. With respect to some balance sheet highlights, it is just the mix of various asset-related aspects of the items on the balance sheet, as you can see. The liquid assets, which are comprising of cash, [indiscernible] with the bank remains very dynamic, and aligned to our balance sheet approach. We focused on our loan growth on the back of 19%. We grew our balance sheet additional 6%, which is almost BHD 600 million or BHD 700 million of loans over the last [indiscernible]. Investment, similarly, the investment has gone up as we expand the balance sheet and total assets have gone up -- our total assets north of BHD 6 billion, which is BHD 6.3 billion to be exact, which is 14% growth in our total assets. With respect to the funding, the customer deposits are very much aligned to our loan growth as well, 6% growth on our total customer deposits. Our DDA or demand deposits are up 6% and similarly, the time and call deposits are also 6% up on a year-over-year basis. Keep in mind, if you look at our deposits and liquidity and the funding, it remains pretty strong. We grew 17% from 2024 to 2023, an additional 6%. Moving to the ECL coverage. Cost of risk, as we have been consistently mentioning on these investor calls, it remains around 30 basis points consistent with the previous years. The overall associated growth of loan is also a factor, and with respect to our coverage ratios on the right-hand side, we have a decrease in loss ratio under Stage 2. This is mainly due to the [indiscernible] that we have held in Stage 2 over the last 2 years. There is also a decrease in overall retail segment ECL as we align the portfolios of both banks BisB and NBB and that would help us and it normalizes the changes within the coverage ratio. The NPL on Stage 3 is just look upwards which have initiated the decline from 56% to 54.6%. However, after we normalized some of these customers, we are back to about 56.6% level. Similarly on the Stage 3 coverages, there's a couple of names that we picked up in the fourth quarter that did not have the collateral associated with it. However, by excluding these 2 or 3 names, we are back to about 95% levels from an overall coverage ratio standpoint. The coverages remain strong. And on top of that, as we have mentioned earlier that the trajectory on a year-over basis. The other item on the balance sheet we have is the capital and liquidity position. It's essentially, if you look at our NPL ratios, excluding nonperforming POCI and performing POCI, the credit management framework remains very strong, right? So performing loans are increasing and nonperforming loans are coming down. And as you can see, the mix is driving the change. Given the growth of the balance sheet, our capital position, we -- our growth -- our CAR remains at 20.5%. The CAR movement reflects the increase in our risk-weighted assets, which is aligned with our growth [indiscernible] strategies. Liquidity on the right-hand side, which is the average LCR and NSFR, they remain very healthy, much higher and above the required levels from the regulatory standpoint. Next is dividends. Strong cash dividends over the last 5 years. As you may notice, we are consistent with our 2024 payout, BHD 79 million dividends, which is a strong testament that the NBB is growing and delivering shareholder value. So from our perspective, this covers most of the financial-related context, and we are happy to take any questions or expand on any of the commentary that I have provided.

Thank you very much, Mohsin. Over to you, Zaina Zayani, our Group Chief Sustainability Officer -- Strategy and Sustainability Officer. Floor is yours, Zaina.

I'm happy to take you through the key sustainability highlights for 2025. In 2025 the awards we received were a testament of the progress we have made across different dimensions in our ESG journey. So we have received 3 Euromoney awards starting from Bahrain's Best Bank, Bahrain's Best Bank for Corporate Responsibility and Best Bank for ESG as well as 4 MENA Banking Excellence Awards, including Best Payment Ecosystem Integration, Best Retail Bank in Bahrain, Best SME Bank in Bahrain and Best Bank for CSR. In terms of ESG ranking, we have ranked first across all sectors of Bahrain Banking Services based on LSEG which was [indiscernible] got renamed to LSEG. And we ranked at the top 4% globally on financial services. In terms of Bloomberg rating -- Bloomberg ESG, we have ranked second across all banking services in Bahrain and third across all sectors and 19th amongst all the banking services in MENA. Moving to the key highlights of NBB's sustainability, starting with the customer centricity pillar of our sustainability. Digital banking services have shown progress in digital adoption. I think an increase of 43% in transaction volumes and 47% growth in digital banking transaction value. Today, 95% of all our new accounts were opened digitally and 42% increase over last year of new to bank customers who opened their account were onboarded digitally. And we had 3% increase over last quarter on digitally registered in retail. In terms of the corporate digital services, we have a 10% increase from last year on transaction volumes and 18% increase in transaction value, where 41% also were registered business clients, both from [indiscernible]. Moving to the governance and ethical behavior and nurturing our workforce pillars. We have managed to get 100% completion of the anti-money laundering training and privacy and security awareness training of staff. Today, we stand at 38% representation of women in total workforce, 28% of women in middle management and 12% of women in senior management. We also stand at 8 number of employees of determination. In terms of growth and learning, we have totaled about 44,000 training hours. That's an average of 51 training hours per employee, and 100% of employees completed the sustainability awareness training. Moving on to responsible banking and preserving our natural resources pillar. We have managed to increase our sustainable finance and social housing program by 35% year-on-year. Our community investment today stands at BHD 2.5 million. We have spent around 1,346 hours on volunteering activities and engagement in the community. Moving to direct environmental footprint. We have managed to decrease our total energy consumption by 7% and decrease the consumption per employee by 7% as well. And we stand at 16% in terms of waste recycling ratio. With this, I end my sustainability [indiscernible]. Moving to questions.

Thank you very much, So [Foreign Language] there are quite a few questions. I'll start with the ones that have been answered already. Mr. Ali Hassan, the question was what are your expansion plans? And at what scale are you targeting the GCC market? And do these plans include microfinance or SME portfolio growth? I believe you have answered that in the overseas and...

I can elaborate on it further. For us, the expansion plans overseas are twofold. There is the expansion plan related to the countries in which we operate, the presence market and there's an expansion plan associated with the non-presence countries. So for the presence markets in UAE, for example, we are obviously continuing to grow in the corporate segment, as I mentioned. But in addition to that, we would like to grow in the SME and possibly even in the retail segment with a limited focused retail value proposition. We are mindful that retail is a very scale-based business, overseas in particular. And therefore, it has to be with a sharp focus and a sharp value proposition and a close eye on costs. But that is an area that we're currently exploring, although we haven't really made a final decision around entering the retail market in the UAE. For SMEs, for sure, we've already started that process in the UAE, and we are actually seeing very good initial success, particularly with respect to attracting fresh new to bank liquidity from the UAE market. I think in Saudi Arabia, we are continuing to grow on the corporate banking segment. As I mentioned, in the Eastern Province as well as in the Central region in particular, we've seen very good loan growth. I think liquidity conditions in Saudi are a lot more constrained right now, generally in the market, but we are again building our cash management platform there as well, which will hopefully allow us to have more engaging broader corporate relationships, including liquidity management in the future. We're also developing our treasury and markets capability in both of these countries. And in addition to that, in both markets, we are keenly exploring fintech partnerships. So that's on the presence markets. In the non-presence countries, we are also very keen to grow, but more from a corporate finance perspective in certain key markets. We see the potential for us to be doing some business, for example, in Turkey, some business in markets like Egypt, possibly some of the Central Asian states where there is a significant opportunity for us to gain good quality exposure, but in a very controlled manner again. So I think there's an exciting set of prospects along those lines. And then in addition to that, we look to expand our financial institutions business, have more broader cross-border trade and FI capability in the years ahead. And in that context also, we are right now reviewing our overall software and FI and risk limits across the region.

Since we're talking -- thank you, Usman, very helpful. Since we're talking about expansion plans and why is the growth momentum. The question which I also believe that you've answered very well, what was the -- how the merger with BBK will create synergies for the combined entities and what are the time lines for this potential merger [indiscernible].

Sure. So I think there's obviously a very close coordination happening, as I mentioned, between both the banks. I think both teams are very keen to move at pace. And we are currently in the middle of several work streams to press ahead with the execution process with respect to due diligence. I think the time line hasn't been specifically announced when that process will be completed. But as we do, we will keep the investor community updated on a monthly basis on significant developments. With respect to the point about synergies, I think as I mentioned earlier, this merger is meant to be a merger that derives maximum potential for growth for both institutions and for the combined entity in the markets that we operate. It is meant to enhance our value proposition from a customer perspective. It is meant to allow us to realize synergies from a cost perspective when it comes to particularly areas like technology, infrastructure, ability to invest and afford better, more efficient solutions as well as synergies around better management of capital, better management of our financial capacity through a larger balance sheet and the ability to be able to be more relevant in transactions from a revenue perspective that require significantly larger sort of single optical limits than what we have individually today. I think from employee value proposition perspective, there are synergies to be extracted in terms of what we will be able to do with a larger workforce as we expand both in Bahrain as well as regionally. So overall, we do see a strong potential here for synergies across multiple areas and particularly on infrastructure technology-related cost synergies and revenue synergies as I described. That work is currently being done by McKinsey, and they are as a joint sort of commercial business adviser, very focused on identifying areas of synergy and agreeing on what the quantification of that will be in the weeks ahead.

Thank you, Usman. Question from Ali Hassan also, observed the improvement in NIMs during Q4. Could you provide guidance on expected NIM trends for 2026, considering ongoing pressure in the local market and oil-related macro factors?

Yes, absolutely. I cannot be able to give you an exact guidance for 2026, but I will be able to share with you some of the steps that we have taken in improving our NIM expansion exercise. And hopefully, they will continue in the remainder of 2026. So now we have a better data quality and better visibility, which is helping us in managing the interest rate gaps, right, from an IRBB standpoint, reducing NII volatility and by timely closing of IRR gaps. We are also looking at the deposit pricing curves across all currencies are pricing in the market, policy rate cut expectations. That's the second thing we are doing. We are ensuring that we have swaps -- currency swaps to close the gap as appropriate as possible. And last but not least, balance sheet reallocation, holding back growth on low spreads. We can be able to grow our assets very quickly as we have demonstrated before, but the key focus will be how we can be able to have responsible growth with ensuring that we have the right level of NII against our interest income as well as interest expenses.

Another question that is also financial related. [indiscernible] I want to ask about the fee income growth. The fees on loans and advances have in particular, increased by 24% in 2025. Do you expect this growth momentum to continue in 2026?

Well, I think from our standpoint, we will strive to deliver double-digit growth. Absolutely, we are focused on improving our financial performance. However, I will share with you some of the background against that is these are driven primarily by 3 areas. Number one is our FX -- profitable FX, commission income, fee income are all experiencing incremental growth on a year-over-year basis. Subsequently, we have strong treasury-related things. And as we have disclosed in our financial statement, it includes a onetime gain of BHD 9.7 million from a sale of land within our subsidiary, which has already been provided for which we have provided information in our financial statements. So those are the key drivers which are helping us [indiscernible].

Thank you. [indiscernible] asks, could you please provide further color on the BHD 19.5 million write-offs recorded during the quarter? And the following question -- 2 questions are, how do you see the [indiscernible]? Let's answer this because there are 2 more questions connected to it. One is cost of risk and the other one about the normalization. Let's do the write-offs.

I think this is part of our -- mostly the retail customer loans, a substantial portion, I would say, 85% to 80% is that out of the BHD 19 million, close to BHD 15 million, which is basically based on the details, right? So that's -- and these are all provided for, so we don't have any issues from our standpoint. But given the customer base, et cetera, this is noncore. And sometimes we try and do our best from a recovery standpoint. But at the same time, we have to make sure that our balance sheet remains pristine. So we write-off the assets which are nonperforming. The small amount is related to corporate, which is again we have to name, which we were cognizant and we were aware of and that represents the remainder of about BHD 3 million to BHD 3.5 million of the total.

How do you see the cost of risk trending into 2026? And should we expect a normalization from current levels?

Look, from a cost of risk standpoint, when you look at it, as I have mentioned that we stay within the 30 to 50 basis points range if you go back historically. And it is also associated with the overall growth of our loan portfolio. And as you may notice that we have -- our loan portfolio has been up from 2024 to 2025. And even before that, when the charge-off provision for the year also because of the quality of the assets that we are booking, given our focus on quality credit focused loans, that is also helping us, and we wanted to manage that, and we have been successful in keeping our cost of risk down in the range of 30 basis points.

Thank you very much. Three more questions -- 5 more questions. Okay. Since we're with [indiscernible] already, let me continue with [indiscernible] question, which is, can we expect a similar -- again, forward-looking, can we expect a similar payout ratio for 2026? Or are you looking to preserve capital for the expected merger? I think we'll talk about dividends.

We have -- historically we have maintained a strong payout ratio. And as we continue to grow our business and expand our balance sheet and ensuring that we vis-a-vis increase our profitability, it will be very difficult to tell you anything about from a guidance standpoint. But if our trajectory of the profit remains strong, we will make sure -- we will ensure that we always bring shareholder value at the end of the year to our shareholders [indiscernible].

So I think the slide that you have got that looks at all the 5 years show that clearly. Okay. Question from Gavin Gibbon. Are there any concerns regarding the latest news from Fitch Ratings, which have downgraded Bahrain of long-term foreign currency issuer default rating to B from B+?

Again on this is -- Fitch has basically followed some of the rating action that has happened from other agencies. So it's not really had any particular impact in the latest news that we saw yesterday. But of course, when it comes to the overall environment, I mean, we very closely monitor developments in credit spreads as a result of any rating actions and continue to take any portfolio measures that might be suitable. We have not seen any particular stress on Bahrain's credit pricing curve. We're not seeing any particular impact on liquidity in the sovereign bonds. In fact, as you may be aware, the Kingdom did successfully access the capital markets last month as well. So no particular action or reaction, I would say, from the Fitch announcement yesterday.

Thank you, Usman. Three more questions. [indiscernible] 2 of them. I would like to see further clarity on the sustainability of the low cost of risk that is below its normalized average, 10 basis points in fourth quarter 2025. Any guidance would be useful. The overall average for the year was more or less in line with historic. So shall we expect this to be maintained going forward?

Look, as I've explained earlier, the cost of risk is fundamentally -- we have maintained and we have also provided in previous investor call that we will maintain it within -- under 50 basis points, that is evident from 2023, 2024 and 2025. And if you go before that, we will see slightly higher cost of risk. Fundamentally it's related to our overall coverage targets of provision for the year as we manage to improve our credit quality of assets come to our balance sheet, we will continuously see hopefully an improvement and a measured view of our cost of risk as well. So it is a subject of very much how we manage our credit portfolio and loan growth as well as how much we take in terms of [indiscernible].

I want to congratulate -- also from [indiscernible] I want to congratulate NBB on the results, which was a beat to our [indiscernible] estimate, especially in fourth quarter 2025 on the back of the NIM expansion. Going forward -- again, this is a forward-looking question. Going forward, can we expect the return on investment to normalize at 14%, considering this year a one-off gain from our subsidiary, further expanded the bottom line in addition to top line growth? Or will the bank aim to maintain a 15% or higher ROE?

Thank you, first of all, for the question, and thank you for the appreciation, [indiscernible]. We are very much focused on continuing to deliver on growth in our core business. And yes, last year, we had a significant one-off. I think that one-off effect is very hard to replicate in any year-over-year period in a core business. But we are very much encouraged by the fact that, as you mentioned, there has been an improvement in NIM in the last quarter. We are currently taking into account all possible measures to continue to grow our core customer franchise across all markets and seeing very strong momentum in that context. So our objective is to maintain a comparable return on equity to what we've delivered. But of course, the approach towards that will be more slightly towards growth and expansion in the core business going forward, which will take a little bit more time as well, but we are very focused and seeing great traction in that context so far.

Thank you very much. So that was about the return on equity. I believe the last question is on sustainability, Zaina. So on sustainability, does NBB have a sustainability framework and a second-party opinion. The answer to both is yes, but you can elaborate?

Yes. So we launched our sustainability finance framework early in 2025, and it is vetted by a second-party opinion, ISS corporate. And since then, we have started classifying the portfolio and [indiscernible] basically the assets and liabilities as per our sustainable finance [indiscernible].

Thank you very much. And with that, if there are no more comments or questions, I'd like to thank everyone on the call. Thank you, our dear group shareholders, investors. Thank you to everyone who attended the call, to all the panelists, Mohsin, Zaina and obviously Usman. And [indiscernible], wishing you a blessed month [Foreign Language].

Thank you.

Thank you.