Qatar National Bank (Q.P.S.C.) (QNBK) Earnings Call Transcript & Summary

Good day, and welcome to the QNB Group's Second Quarter 2021 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Elena Sanchez. Please go ahead.

Thank you. Good afternoon, everyone. This is Elena Sanchez, and on behalf of EFG Hermes, I would like to welcome you all to QNB Group's Q2 2021 Results Conference Call. It is a pleasure to have with us in the call today the following speakers from QNB Group: Ramzi Mari, Group CFO; Noor Mohammad Al-Naimi, General Manager, Treasury; and Mark Abrahams, Assistant General Manager, Treasury. The call will begin with a presentation on the key highlights of the second quarter results, and then we can move on to Q&A. I would like to hand over the call now to Mark Abrahams. Please go ahead. Thank you.

Thank you very much, indeed, Elena, for hosting the call. Before we begin, we would like to highlight that this call is only for investors and analysts, and any media should disconnect now, please. I will begin by giving an update on Qatar in light of COVID-19, followed by a brief overview of the macroeconomic environment in Qatar. Then, I will cover QNB's financial results for the period ended 30th of June 2021, and finally, open the floor to Q&A. Qatar has taken all necessary precautionary measures to protect the society, its population and economy from COVID-19. Whilst the impact of the COVID-19 pandemic provides uncertainty, Qatar's economy has weathered the storm and activity is rebounding as business resumes. Moreover, Qatar's COVID vaccination program is progressing fast as more than 84% of the population, age 40 or above, has now had both doses of the vaccine. Qatar's nonenergy private sector economy continued to expand strongly over the second half of 2020 and the first quarter of 2021, as coronavirus-related restrictions were lifted, according to the Qatar Financial Centre's Purchasing Managers' Index. The top line PMI has been comfortably above the expansionary threshold for 9 months and has been accelerating in recent months, signaling sustained improvement in business conditions in the nonenergy private sector segment of the economy. Moving forwards, private sector growth will be boosted by continued structural reforms, including ownership liberalization, the promotion of foreign direct investments, labor reforms and several initiatives to support SMEs as well as self-sufficiency in strategic sectors. Tailwinds for investment in increasing hydrocarbon production will drive economic growth going forwards. Six new LNG liquefaction trains are planned to increase Qatar's LNG production by 64% to 126 million tonnes per annum. Qatar is going to go from 77 million tonnes per year to 110 million tonnes by 2025 and then up to 126 million tonnes by 2027. Positive spillovers from increased hydrocarbon production will combine with diversification efforts and structural reforms to boost activity and spending in the manufacturing and services sectors. I will now move on to QNB's quarterly financial results for the 6-month period ended 30th of June 2021. Net profit was QAR 6.8 billion or USD 1.86 billion. Considering the global economic conditions, QNB Group, following its conservative approach towards building adequate reserves against potential loan losses, has opted to increase its loan loss provisions compared to last year, which will assist in protecting the group from any adverse experiences in the portfolio. In addition, QNB Group has continued on its operational rationalization exercise, which has resulted in significantly reducing the cost-to-income ratio from 24.5% last year to currently 22.9%. Operating income maintained QAR 13.6 billion or USD 3.6 billion, demonstrating QNB Group's success in maintaining growth across the range of revenue sources even in these challenging conditions. Total assets remained over QAR 1 trillion, at QAR 1.065 trillion or -- sorry, USD 292.5 billion, up by 10% from June 2020. This was driven by a growth of 6% in loans and advances to reach QAR 746.6 billion or USD 205.1 billion. QNB Group remained successful in attracting deposits, which resulted in an increase in customer funding by 8% from June 2020 to reach QAR 766.9 billion,or USD 210.7 billion. This helped to maintain the group's loan-to-deposit ratio at 97%. The group was also able to attract high-quality wholesale funding. During the first half of 2021, QNB Group tapped the global markets for debt securities issuance under its EMTN program, including a $1 billion 5-year bond issued in January 2021, and the debut bond launch on the Hong Kong Stock Exchange for $600 million, which was successfully placed in June 2021. Despite several challenges and headwinds from the global pandemic, QNB Group was able to maintain the ratio of nonperforming loans to gross loans at 2.3%, a level considered to be one of the lowest among financial institutions in the Middle East and Africa region, reflecting the high quality of the group's loan book and the effective management of credit risk in these conditions. In addition, the coverage ratio on Stage 3 loans is at 108%. Total equity increased to QAR 97.7 billion, up by 7% from June 2020. The bank's capital adequacy ratio stands at 18.8%, comfortably higher than both the QCB and Basel III requirements. The group is well capitalized and comfortably exceeds other regulatory liquidity and leverage ratio requirements. Thank you all very much. We will now turn over to questions and answers. John?

[Operator Instructions] We will now move on to our first question from Edmond Christou of Bloomberg.

This is Bloomberg Intelligence, Edmond Christou. I have 2 questions. First, when I look at the margin, there is improvement in the cost of funding and also there is improvement -- I mean, margin in Turkey has performed better than I expected. So if you can give some light on what happened and what's your outlook for the second half of the year in Turkey. The other question is on the lira depreciation. How do you see the impact of the lira on the capital? And are you comfortable with the capital buffer? Or do you see anticipation for more capital retention into the year? The third one is, what's your view on the M&A, especially now we have better control on the virus, less uncertainty going forward. We talk about due diligence. It's too difficult to contact during the last year, COVID-19. So what's your view going forward and which market you would be looking at again?

We saw a drop of 3 basis points overall for the group. But if we break down the movement on margin, we realized that Egypt margin dropped by around 22 basis points, Turkey margin dropped by around 70 basis points and materially improved in head office margin, and this is why the overall drop for the group is only 3 basis points. This is in line with what we have mentioned at the beginning of the year when we said that, especially in Turkey, we expect net interest income to be materially helped due to different factors, mostly regulatory. However, what we have seen in the last 2 months that interest is going back to normal. Considering that many analysts expect interest in Turkey to be -- regulatory interest in Turkey to continue to be at current level for the short period until next -- until June -- sorry, until December this year. So we are hopeful that interest income in Turkey will continue to improve in the second half of the year, which will help overall margin for the group. At current number, we expect by end of this year, overgrow -- overall growth in net interest income to be between 6.5% to 8.5%, which is a much better growth than what we originally anticipated early this year. The bulk of the growth is coming off a good management of our cost of funding at a group level, and more importantly, at head office level. When lira depreciates, the whole balance sheet is impacted. And that's why a little of devaluation will not have a major impact on capital adequacy ratio for Turkey stand-alone. Turkey stand-alone today, the capital adequacy ratio is around 15.2% and -- which is materially higher than the minimum required by their regulator. They have a buffer of around -- if I'm not -- about 2%. So in terms of capital adequacy, we are fine. We don't see major changes from head office perspective on capital requirements for Turkey. We fully realized the capital equity ratio for finance bank is lower than the peer group, but at head office, we need to consider overall implication at the group level. And we believe that capitalization ratio for finance bank at this time is sufficient. Merger and acquisition, as we always said, we are opportunistic. We will look at opportunities that come to us. Today, there is nothing we are looking at. I don't anticipate anything major at that level during 2022.

We will now move on to our next question from Hootan Yazhari of Bank of America.

So we've seen some pretty encouraging trends in a number of factors. Firstly, on the loan growth side, particularly in the Qatari market and the Egyptian market, we've seen some good momentum there. Can you maybe talk around what has been the key drivers of loan growth during the quarter? The next point that I would highlight is on the cost-to-income ratio, which continues to come down and remains well below your peer group. Can we expect this ratio to continue going further down, given it is quite a lot lower than peers? Or is there something that will prevent this from continuing to move in the same direction? The last point is we now see coverage ratios in the Turkish side looking pretty healthy on the NPL side. Do you foresee maybe a further pullback in requirement for provisioning from here? Or will you continue to pursue a pretty conservative provisioning policy with regards to Turkey to build buffers there?

The key driver to loan, I know that many of you were very disappointed with growth in loans in the first quarter, especially at the Qatari level for QNB. And I mentioned that our expectation that for the second half of the year and the second quarter of the year, we are going to be much better. And this is exactly what happened. Growth in loans, especially in Qatar, allow us to go back and capture the market share we lost in the fourth quarter of last year and first quarter of this year. The bulk of the growth were from -- to be honest, it was split between public sector growth, mainly government agencies and some government loans, and private sector loans. It's split among different sectors and it continues to be mostly focused on services, industries and some projects surrounding oil and gas projects. Egypt growth is not as strong as we wanted it to be. And we expect second quarter -- second half of the year to be much better than first half of the year. But if we see -- if we look at the growth in loans in the overall Egyptian market, we see that QNB is doing much better than overall growth. Hopefully, growth in the economy in the second half will be much better than the first half, which will allow Egypt to grow much faster than the first half. Turkey was very strong in growth in loans. We see that in Turkish lira, their growth was more than 25%. And this is expected. Guidelines for Turkey, they talk about growth of not less than 20% this year. We are going to continue to focus on growth in Turkey because we still see opportunities, especially on the small Turkish lira loans. Our focus is mostly on Turkish lira loans, and we are staying away from any foreign funding. Cost-to-income ratio, we expect it to come down, and this is what we have mentioned at the beginning of the year. We are now 22.9%, but still that comes in 2 levels. The first level is the impact of growth on the yield on interest-earning assets. Growth in net interest income for the group as a whole in the first half of the year was very strong, and this materially helped us in improving the profitability for the whole group. If we add to that our capacity to control costs whereby we expect by end of this year that the cost will drop by around 1% from last year. Overall growth in revenue, we expect it to be between 6.5% to 7.5%. So if we take both strong growth in revenue generation, very strong management of cost, this will allow us to maintain a very strong cost-to-income ratio for the group for this year. Now the question is what is sustainable? I think for a bank at our level, a sustainable ratio should be between 26% to 24%. If we maintain that, our cost-to-income ratio at those levels, that means we are continuing to grow our overall revenue and controlling our cost. Third question is coverage ratio on Turkey. We said that we wanted to continue to be -- to take a very conservative approach on Turkey loans. One of the good signs that we have seen in the first 6 months of 2021 is a weaker inflow of NPL coming to Turkey. And that's why we saw that the NPL ratio dropped from 4.4% in December to 4% in June. One of the main reasons for that is that many customers in Turkey materially benefited from the growth in Turkish lira done by some peer group in Turkey at a very low price, especially in the first half of the first quarter of the year, and they used some of that cash generated from other loans to repay their loans to commercial banks, which were at a much more expensive rate. And that's why we materially benefited from this. And at this stage, monitoring NPLs on a weekly basis in Turkey, we are much more optimistic on the momentum for NPL ratio in Turkey. Coverage ratio will continue to be improving. Today, we are at 105%. We're going to continue to push this further. More importantly is the coverage ratio for the group. For the group, we started the year at 107%. Today, we are 108%. This is an extremely important ratio for the group because it is extremely important for us to continue a coverage ratio higher than 100%. And this takes us to -- because I'm sure this question will come, to cost of risk. What do we expect cost of risk for the group? At the beginning of the year, I said it will be 70 to 75 basis points. Today, it's 77 basis points. What is my expectation? I would be very honest with you, that ratio can -- that number can go up if we see growth in revenue continued to be very strong. That means we will have more room for us to be more conservative in provisioning with -- at the level of Qatar or other locations in the group. Do I expect the number to be beyond the 80 basis points? No, but would we end up between 75 and 80? I will not be surprised.

We will now move on to our next question from Waleed Mohsin of Goldman Sachs.

So 3 questions from my side. First, on loan growth, I wanted to get your thoughts on medium-term loan growth for the group. The reason why I asked this is on Turkey, as you said, we've seen pretty strong growth. Turkish banks are saying 20%-plus loan growth this year on the Turkish lira side. Egypt, we've also seen a pickup on the corporate lending side, and it seems that Qatar, if you look at the Qatar Central Bank data, double-digit loan growth driven by both public sector and private sector. So with the LNG expansion, some infrastructure projects coming in Qatar, would it be unfair to assume that QNB Group loan growth for the next 2 to 3 years could be high single digits to double digit? That would be the first question. And just linked to this, if you could also comment on what you're seeing in terms of competition. A number of private sector banks are saying they want to take up a higher market share in the public sector side, and we're seeing some international banks on some of the syndicated loans as well. So that's the first one. Then Ramzi, you talked about cost of risk being around 70 bps or so for this year. I just want to get your thoughts on what is normalized cost of risk for the group. Because if I look at some of the other banks, they are guiding for normalized cost of risk of around 50 basis points, and they also have Turkey as an exposure. So just wanted to get your thoughts on where this cost of risk would end up in the next year or so. Last question. Given the strong growth on loans, better margins, et cetera, does it not pose upside risk to your net income guidance of 5% to 7%? It seems that you're very conservative there. If I analyze the first half number in terms of net income, you're looking at double-digit earnings growth. So just wanted to get your thoughts on the bottom line as well.

I think all your questions go around the guideline for 2021, Waleed. So just to summarize. Let me give you the guideline for the 3 home markets for the group and then Egypt and Turkey. The guideline for the group. As we stand today, the balance sheet is 6% to 8%, including loans; profit and loss 7% to 9%. However, based on what we have seen in the first half, my expectation is that we are going to be at the -- as close to the top of the guideline that we -- that I gave in terms of balance sheet or profit and loss. For QNB, we expect the growth in loans to be 7% to 9% and their growth in deposits to be 13% to 15%, and profit and loss to be 5% to 7%. For Turkey, growth will be much stronger. Assets -- sorry, loans, will be 18% to 20%; deposit, 22% to 24%; and P&L, 12% to 14%. All these guidelines are higher than what I gave at the beginning of the year, which means that the momentum is positive. Now to go back to the rest of your question. What is a normalized cost of risk for a group? Waleed, it's close to impossible to give an answer on this, considering that we are operating in 31 countries. You will have a good year in 4 or 5 countries, and I will not be surprised if you have a very bad year in the rest of the group. So to be able to give you where we expect cost of risk on average to be in the next 2 to 3 years, this is close to impossible. I can't predict. And I said last year that I expect 2021 to be a tough year in terms of cost of risk and I expected 70 to 75 basis points, and now I'm saying 75 to 80 basis points. So I'm being even more conservative. If I want to expect -- to give you guidelines in terms of cost of risk for the next 2, 3 years, for your model, I prefer that you continue to be conservative. If you continue to assume between 60 to 70 basis points for the group, I think this is better than [ 50 to 60 ] basis points. And I would tell you also, I would add that any bank that expects the next 2 to 3 years to be good years in terms of cost of risk, I think they are very, very optimistic. I think the impact of COVID-19 to many of the customers would not appear in 1 day. You will see it on the longer term and it will take maybe 2 to 3 years until you say that the overall implication on merchant is finished. But it's now too early to say that things are in -- that the COVID-19 is beyond that and we know the impact. And that's why we prefer to continue to be conservative. Now in terms of, again, what we expect the growth in loans for the next 3 years, I mentioned that this year, we talk about 6% to 8% and I expect it to be close to the top. Budget-wise, for the next 2, 3 years, I will expect to continue to project a similar growth number, not more than that. I doubt double digits. Please note, Waleed, today, QNB is very, very close to $300 billion. When you talk about 10%, you talk about $30 billion. This is not a very -- it's not a small number, even at Qatar level, including the rest of where we operate. And when we want to also project loans, it's extremely important also to consider funding. They always say that it's easy to learn, but it's very difficult to fund. And that's why when we talk about lending $30 billion, that means we need to start thinking about funding of $30 billion, which is extremely difficult, especially if you want to maintain an overall margin 240 -- close to 250 basis points. All these need to be considered when we project number. And that's why I do not -- I doubt that our growth will ever come back to double digits considering the size. Now other banks. Do we expect other banks to capture market share from QNB? I really, really doubt this. We will continue and the most important target for executive management is to maintain our leading role in Qatar. This is objective #1 for executive management. We know that international banks compete with us now, but they mostly compete on oil and gas projects, mostly gas projects. And I said, I remember around 6 months or even last year is that QNB's capacity to compete on these projects is extremely limited because, number one, financing is a huge number. And number two, QNB is all -- has always been able to finance this project at very low rate, in which we at QNB cannot compete. And that's why we prefer to focus on other projects with a public sector or private sector, where we can generate, which is ancillary projects around new oil and gas projects, especially on the private sector, that allow us to generate around the 250 basis points.

We will now take our next question from Chiradeep Ghosh of SICO.

This is Chiradeep Ghosh of SICO. Two, three very quick questions. First one is you gave us a good long-term perspective of the cost of risk and the loan growth. Can you also give us a perspective on the NIM? I mean, what should be our NIM guidance for the next 2, 3 years? Because considering the big size that you just alluded, it might be -- it would be helpful for us. That's one. Secondly, in the previous call, you have said that you have conservatively tried to boost up your Stage 2 loans because you're foreseeing the nonperforming loans might go up in the future. So if you can throw some light on where it stands. I mean, is it still as conservative as it was 2 quarters back? Or it is at a more normalized level, so that will give us some more comfort looking forward? And the third one is in continuation of the previous answer, which you gave. So most of the other conference calls, the other Qatari banks are saying that they are looking into getting into public sector loans. So do you believe that they can be a threat to you, not international mix, I'm talking about domestic banks, would they be a threat to you? Or will you still continue to get the meet -- the primary part of the public sector loans?

Okay. Just -- when I answered question for cost of risk and projection for 2, 3 years, and I said it's extremely difficult. So in projecting cost of risk is different -- is difficult. You can imagine how difficult it is to project NIM for our bank at our size for the next 2 to 3 years. However, I need to go back to what I always said, what is sustainable for a bank with a balance sheet of $300 billion? And if we compare QNB with the peer group at that level worldwide, what is their margin? And a very quick study will clearly show that QNB enjoyed at least 50 basis points growth compared with the peer group at the level of $300 billion of balance sheet. Our -- we know why we have this. And we know of our efficiency to manage our cost of funding very carefully. And we know that the rating of QNB materially allow us to be able to generate these numbers. And that's why our focus continue to be in managing our cost of funds, building relationships for long-term funding that allow us to generate -- continue to generate that size of funding, working hard to maintain rating for QNB to allow us to maintain a strong relationship with our main funding sources, and at the same time, capturing the right market share in the right sector within the economies, especially in Qatar, that would allow us to generate the 250 basis points. And one of them, as I mentioned before, is that we cannot compete on funding for gas projects because these are usually have a very low spread over LIBOR rates. Saying all this, if we are going to continue growth in our balance sheet by, let's say, 6% to 8% in the next 3 to 5 years, being able to maintain margins of close to 250 basis points is close to impossible. The more -- the higher the balance sheet, that means that we are going to start focusing more on smaller markets and more on private sector. Being able to generate 250 basis points will be difficult. However, what we have been doing in the last 5 years is managing that margin very carefully, whereby drop was always between 5, maximum 7 basis points. And I always said that what is sustainable, hopefully, for our generation in the bank, which is our executive management who is going to continue to be here for the next 5 to 7 years is 225 basis points. Beyond this, it is extremely important to project because it really depends on where we are going to be operating, what is the focus in terms of growth on growth in loans and to what extent we are going to be successful in continuing -- to continue to manage our cost of funding. So different factors, not easy to project, but for your model, if you project a drop of, let's say, 3 basis points, maximum 5 basis points for the next 5 years, I think this is logical. Now on Stage 2. When I spoke about cost of risk, I said that we are going to continue a very conservative approach on building coverage and building provision. Part of that methodology is that we need to continue to be conservative, especially on Stage 3 loans and on Stage 2 loans. We have been -- if you monitor our Stage 2 number for the last maybe 6 or 7 quarters, you will see that we have been growing the number by around QAR 1.5 billion to QAR 3 billion every quarter. This will continue because this allow us more room to be conservative in building a better coverage, whether it was for Stage 2 and easier for us to shift some of this loan to Stage 3 in the longer term. So to answer your question, expect growth in Stage 2 for the next 4 to 6 quarters at the level that you have seen in the last 2 years. Third point, would other Qatari banks been able to capture market share from QNB from the public sector? What I said -- to be honest, I have [indiscernible] last maybe 10 years. This does not happen. We are going to work hard to ensure that this does not happen because the public sector in Qatar is one of the most important sectors for QNB. And we manage that relationship very carefully. We know that we are the most capable financial institution in Qatar to serve that sector considering the size and the historical relationship that we have. So what I'm going to say is that we will do our best to ensure that this does not happen.

Just one very quick one. So just a continuation of the question too. So if you're being conservative on Stage 2, does it mean that alone, which, say, 1 year back or 1.5 years back was considered a Stage 1 loan, this time you are having more strict parameters and that's why it's getting considered at Stage 2, right, if I'm understanding it right?

Yes, yes. Because the reclassification between Stage 1 and Stage 2 is highly depends on how conservative you are and the parameter you put in your model. And based on how conservative you are, some of the loan will move to Stage 2. You can be very relaxed and consider everything perfect and everyone is -- everything is Stage 1, or you can be conservative and some of the loans will shift. Historically, QNB always took the conservative approach.

We will now move on to our next question from Aybek Islamov of HSBC.

So a couple of questions from me, please. So firstly, I was curious if you could comment about the situation in the private sector. I know you're a public sector bank, but if you could provide a view how is the private sector economy doing in Qatar. Is there much happening? Because that has to be the cause for other banks in the country. And I think a question linking up to that, do you think there is a scope for consolidation in the Qatari banking market, right? And I think secondly, what I was curious to ask you is that in your slide deck, you provide more disclosures about your sustainable funding, green funding, et cetera. Is that becoming a part of the strategy? Is there a way to manage your funding cost better by tapping into sustainable funding sources?

Now private sector, now if we look at QNB number for private sector for the first half of the year, there's a growth of around 3%. By end of this year, we expect that growth to be higher, and I expect it to be between 4% to 5%. So growth in the private sector loans still to continue to be strong in different sectors in the economy. Is it as strong as we have seen prior to COVID-19? No. But I think what applies to Qatar applies to everywhere else. Do we expect the growth to continue at that level or to continue to grow? We expected it to marginally improve, but this will be a gradual growth. Now when we talk about consolidation, we always said and we always believe that consolidation is extremely important for any banking industry in the world. And when we look at the parameters in the Qatari market, definitely consolidation is very, very important. However, today, we have seen Al Rayan and Al Khaliji consolidate, which is very good and which is healthy for the market. Do we expect other consolidation to happen? To be honest, I don't have any information that allow me to say yes or no. Is it good to happen? Of course, we strongly believe it is good for the market if that happens. In terms of funding, I will leave that to Mark.

On the funding and market side, obviously, we did our debut green bond last year. And obviously, a question about how that will impact upon our funding pricing going forward. Evidently, having spent a lot of time and effort in setting up the green framework for the bank, the ESG framework, very much in tandem with the long-term goals of the Qatari economy as well, QNB is very, very committed and very invested in actually growing this part of the market going forward. The reality is this is a very nascent market. The volumes we're talking about, although they're growing substantially globally, they still remain a very, very tiny part of the overall wholesale funding on a global scale. So we will endeavor as always. We're looking at potentially future issuance, we're looking at different products. We have inquiry on green deposits. We're looking at different markets, so globally as well. So we are very, very committed to developing that side of our business on the funding side. But in terms of the actual impact on our funding cost, it will be negligible because, again, we have to have a certain amount of qualifiable assets. There is a pipeline that is growing, but is very important from our point of view. But again, if you look at QNB in terms of the overall size of the bank, nearly $300 billion, this will be a very, very small piece of that initially, and it will grow over time. So it won't have a material impact on the funding cost, at least, for the next 2 or 3 years.

And we'll go to our next question from Naresh Bilandani of JPMorgan.

It's Naresh from JPMorgan. Two questions, please. One -- the first one is on, if you take a look at the -- your Qatari segment, within the segmented breakdown, one trend that you observed since Q4 is a steady increase in the size of your investment book at the Qatari level. And I remember you had mentioned in your previous calls that you will make a conscious effort towards focusing or boosting your investment book compared to the previous years. To what extent is the conscious effort in this direction, led by the fact that is there any effort from your side to encourage customers to either opt for investments for funding the businesses or go into bilateral or syndicated credits, which will sit in the loan book? And how should we think of the evolution on both these lines as we go into the medium term, especially given the fact that the growth on the hydrocarbon/public sector side will be a focus area for you and for the economy as a whole in the next couple of years? That's the first question. Second question, and maybe we can have a separate discussion there, but just keen to understand, we focus a lot in Turkey and Egypt, but you have significant presence in other geographies. So just keen to understand how do you see the medium-term strategy for smaller entities in the -- in your overall group. Say, for example, I know you mentioned that Ecobank offers you a good opportunity for reference customers linked to Africa. Is the achievement of a control in any ways part of your medium-term strategy? Or say, alternatively, how is the medium-term plan for your network in Indonesia, which as a banking market tends to have a significant opportunity for future growth?

Okay. Investment book, I agree with you. Without the effort that QNB did in the last 1.5 years, we wouldn't have seen the growth that we have seen in the investment book. QNB spent a lot of time encouraging companies to diversify their funding sources and not to depend on normal loans, but also to look at the bond market. This effort will continue. In terms of how we see this progressing, I will not be surprised if we -- if you continue to see $1 billion -- between $1 billion to $3 billion increase on quarter-by-quarter in that sector. In terms of strategy, this is a very detailed question, but I can summarize by saying this. The most important home market for QNB continue to be Egypt and Turkey and Qatar. This is the main focus. All other countries, especially where we have branches, they just complement what we have operation here. And the focus will continue to be how these countries, for example, Singapore, London and Paris, will support our operation in Qatar and the GCC. If we are happy with the ratio that we have today, do we have short-term plans to increase that ratio? No. But we are very happy with how things have been improving in API in terms of performance, profitability, coverage ratio. We have very good signs that future prospects for API is very positive. We will continue to support, in addition to other major shareholders. But is there a plan to increase it beyond that -- beyond current ratio? Not today. Indonesia, again, to us, it's a very small market to QNB. Do we have plan, short term, to expand that business? Not as of today. But anyway, we can, Naresh, discuss the details on this at a separate session.

And it appears we have no further questions at this time. I'd like to turn the conference back for any additional or closing remarks.

Nothing else from the QNB team. Thank you very much for your time today, and we'll speak again in 3 months' time. Thank you so much. All the best.

Thank you, everyone, for joining and hope to talk again after September number.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.