The Commercial Bank (P.S.Q.C.) (CBQK) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. My name is Zubair Chaiwalla. I'm Head of Investor Relations. And I welcome you to Commercial Bank's H1 2022 Results Call. Joining on the call to my far left is Joseph Abraham, the Group Chief Executive Officer; and to my left is Rehan Khan, CFO. We are also joined by Kaan Gür, CEO of Alternatif Bank, who is on the call. During the speaker's presentation, you'll all be put on mute, and I'll join you just before the Q&A. I now hand you over to Joseph Abraham, the Group Chief Executive. Joseph, over to you.

Thank you, Zubair, and welcome to everyone. Thank you for joining us today. As you saw, we announced a positive set of results. Our net profit is up 7.9% and also our income -- operating income and operating profit are also up respectively, by 12% and almost 16%. So overall, I think one of the features which people will obviously have questions about is the relatively muted loan growth, 0.6%. As we had guided earlier and signaled that the government, because of a strong fiscal position was paying down a lot of its overdraft from the banking system, that obviously did happen. But the majority of that has being done. So we would expect that, that effect will have been fully absorbed. So the second half will revert back to more normalized loan growth, which we see as a 3% to 5% annualized rate. If it had not been for the government overdraft repayments, our loan growth would have been over 7%. Apart from that, I think we are generally in line with our guidance. Our capital -- total capital at 17.5% is slightly below our 18% guidance. This is because of the volatility in the bond markets, which obviously have had some of our HTM bonds are obviously having some impacts. But we remain comfortable with the underlying credit risk. Apart from that, the outlook for the second half of the year remains positive. We have the World Cup coming, which I think will add to a boost in terms of, I'd say, more retail sort of spending because most of the project is already over. But I would say that the North Field expansion, the continued high gas prices will lead to positive outcomes for the Qatari economy over the course of the next 12 months. So we still remain positive on the outlook economically, which as I had said earlier, is probably one of the best over the last 5 years at least. I'll hand over to Rehan, who will go in more detail through the financials and then we will be happy to answer any questions you have. Rehan?

Yes. Thank you, Joseph, and good afternoon, everyone. I'll focus on Slide 8, which shows the quarter-by-quarter performance as well as H1 of this year versus H1 of last year. As you know, these normalized numbers exclude the impact of IFRS 2 on both the income and the cost side as a result of the staff performance scheme that we have. This is a fully hedged scheme. And therefore, there's no impact at the operating profit level. So you can see it's the same number both in the normalized and the reported columns. So I'll discuss the normalized numbers, and this gives you the underlying performance and trend of the bank. In addition, you will know that we have the impact of IAS 29 hyperinflation pertaining to Turkey. The implementation of this is effective from first of January. But in this presentation, we've taken the entire impact in the second quarter of this year to ensure that Q1 is in line with the earlier reported numbers, which was QAR 702 million. So that, therefore, means that QAR 730 million is the normalized profit for Q2, which means the QAR 1,432 million is the overall profit for the first half of this year. This is an increase, as Joseph said, of 7.9% year-on-year and 4% quarter-on-quarter. If we just look at the balance sheet initially, you can see that the loan movement is 0.6% year-on-year, but 2.9% quarter-on-quarter. We do have momentum. But overall, the loan growth has been impacted by the government repayments. We saw the last of that earlier this month. Net growth is likely to be muted as a result of these settlements and also those that we're working on in our nonperforming loan book. Deposits have increased by 8.5% year-on-year and -- 8.5% year-on-year and 5.7% quarter-on-quarter. The market remains very liquid, and our deposit mix has actually improved further with a growth in our low-cost deposits of 11% year-on-year, and that's helping us manage our cost of funds. Within operating income, our net interest income has improved by 10% year-on-year and 5% quarter-on-quarter. In addition, our non-fund income has increased by 18% year-on-year and 27% quarter-on-quarter, mainly due to an increase in our fees, our FX and also our trading income. So overall, you can see our operating income has grown by 11.7% year-on-year and 9.8% quarter-on-quarter. We continue to have a strong cost discipline. So our costs overall, year-on-year, are broadly flat, and that we expect to continue in the second half of this year as well. Our cost-to-income ratio as a result has reduced from 25.3% in the first half of last year to 22.6% in the first half of this year, mainly driven by an increase in the operating income. On the provision side, we'll continue to be conservative. We gave a guidance that our cost of risk will be around 100 to 110 basis points for the year. We're in that range right now. NPL ratio is slightly below Q1 of this year and slightly higher than H1 of last year. We are continuing to work, as I said, on settling those NPL names, and we expect to see some of those results coming through in the second half of this year. In addition to this, we see a very good growth in associates' income, both NBO and UAB have seen a continuing increase in their profitability. Commercial Bank is working closely with both of those entities in the execution of their strategies. And then lastly, just coming to hyperinflation. As you can see, the noncash net monetary loss is QAR 69 million. Overall, the impact is QAR 93 million across the various lines, including the nonmonetary loss and those are absorbed within operating income and costs and tax. So the overall impact is 93 million that comes through in the first half of this year. And we would expect that kind of number to continue in the second half of the year, depending very much on the monthly inflation rates. So let me hand you over to Kaan Bey, CEO of Alternatif Bank, and he will talk more on the macro side of Turkey as well as Alternatif specifically. Over to you, Kaan Bey.

Thanks a lot, Rehan -- Mr. Rehan. I would like to give some sections about the Turkish macroeconomic expectations. Starting from the GDP, I can say that GDP growth is expected to moderate to potential levels in second half of the year. Actually, we are expecting almost 4% as the growth, as annual growth. The thing is, here, especially the current account deficits, the trend, we have seen that elevated energy cost, may keep the current account deficit to GDP level at 4% as year end. And the most important reason, of course, the CPI. CPI increased to 78.6% in June and expected to still rise to October before starting to decline by end of 2022. So the other important thing I would like to share the expectations about the CBRT. We don't expect that CBRT is going to make any adjustment increase on the policy rates, the overall expectations CBRT is to keep rates stable. I rather would like to draw your attention to Page 25, which is a kind of snapshot of Alternatif Bank's first half financial performance. I would like to say that, especially, again, it was a strong quarter for us. We were very cautious. We selectively grew, and 25% total asset size is one of the important performance. But when you look into loan breakdown, especially, I would like to emphasize that our reshaping effort is ongoing and our Turkish lira loan share as of June, 58%, which has increased by 11% when compared to December '21. So you can see that this is a conversion effort and our foreign currency loans decreased by 18%. So we're going to focus on that. At the same time, on the deposit side, especially our Turkish lira funding costs, we are benefiting from the fixed guaranteed deposit scheme. The 60% of our total deposit is almost FX guaranteed new deposit products. So it allows us to minimize our overall Turkish lira funding cost, including, of course, the Central Bank swap tests. Those are now important factors in order to increase our Turkish lira balance sheet spreads. Our asset quality has been improving, thanks to our NPL -- very limited NPL inflow. Well, they're strong collections. And our bank-only NPL ratio is below 2%, 1.7%. And when you compare to private bank sector, NPL ratio is above 3.2%. So all in all, second quarter was at a very balanced, very selective, the growth on our side. Actually, when we come to especially the profitability side, I can say that 38% quarter-on-quarter increase in our operating income that was supported by the net interest income, our trading and other income, and of course, net fee and commission income. It means that actually, we are in the market, selectively growing there. Our customer base is expanding. New business are strong, but this is, at the same time, a very selective approach. As I said, our Turkish lira loan deposit spread is improving. And of course, the -- another important thing is living in a high inflation environment, the OpEx. Actually, our OpEx is managed well, significantly below year-on-year and quarter 1 performances when you compare the inflation. So on the bottom line, I can say that in the second quarter, we -- our total profitability is TRY 218 million, which is 65% higher than the first quarter. And of course, as Mr. Rehan underlined and emphasized the IAS 29 transition. So after offsetting those actually our final net profit reached to TRY 231 million. So the most important thing is, especially for coming months, quarters, actually, the net profit should -- beat the inflation. And then actually, we are ready to the performance in that way. So I would like to end up here. If there's any question, I'm ready to answer. I'm handing you, Zubair. Thank you.

Thank you, Kaan Bey. We will now start the Q&As. [Operator Instructions] We have our first question from Chiro Ghosh. [Operator Instructions]. Chiro, we cannot hear you.

Can you hear me?

Yes.

You can hear me, right? This is Chiro Ghosh from SICO Bahrain. Two very quick questions. First one is, do you see that in Turkey, the NPL has become quite -- I mean, the asset quality has remained quite well, quite strong. So although it's slightly counterintuitive that in an environment of such high inflation, we would have expected asset value to deteriorate. If you can throw some -- if you can share with us some ground reality of how is the scenario there, what do you expect asset quality going forward? That would be my first question. Second one is about the hyperinflation, a very quick one. So beyond the profit, the comprehensive income level, we see over the 6 months, CBQ actually made a hyperinflation gain of roughly [ QAR 2 billion ]. So if you can throw -- if you can please help us understand it better. And also does it have anything to do with the [ QAR 1.8 billion ] of FX translation loss, which you made over the 6 months? These are my questions.

Kaan Bey, will you take that?

Yes, yes. I'm going to answer that. Thanks for the question. First of all, I can say that within the last 4 years, actually, our overall lending appetite, we were very selective. And as I said before, actually, we are converting our overall balance sheet, especially from FX to Turkish lira. And we build up very strong and solid new customer portfolio, especially on corporate and large commercial site. And at the same time, I can say that actually, we don't expect any surprises for upcoming months and 2023. We have very prudent provisioning policy. And in the same time, of course, the inflation during that time, kind of enabling us to improve the evaluation of the existing -- the collateral portfolio. So we are good at the collection side. There is no NPL. Very prudent provisioning. And of course, limited, cautious, but very selective lending approach in the best customer, especially in the market. So this is a kind of better depreciation of Alternatif Bank, especially in the markets. I can say that.

And going forward, how do you see the asset quality?

The quality, we're going to keep that. This is the main and major, let's say, the target of the management, and we don't expect surprises. And I think and overall, especially starting from second half, a 2% level is going to be a solid base NPL rate for the end of the year. And of course, although there are some volatilities, but we believe in our strong and solid newly build up customer portfolio. So...

Chiro, for your second question, you're right, the [ QAR 2 billion and QAR 1.8 billion ] kind of net of each other. And that's why we say that the impact to equity and on capital ratios is minimal, because the marginal gain that we get in the capital is offset by some increases on the RWAs. Our next question is from Edmond Christou. [Operator Instructions]

Can you hear me?

We can hear you.

Okay. Excellent. The first question, I think, if I understand it correctly, is you mentioned that the hyperinflation impact for the second half of the year will be similar to the first half. And I think there is a larger adjustment in 1Q of [ QAR 65 million ] compared to [ QAR 4 million ] in the second quarter. So what is the assumption you have in terms of inflation by the end of the year to make an assumption that you will have another [ QAR 69 million ] by the second half of the year, if I heard it correctly? The second question I do have is, it seems to me, just looking at the number initially, that the margin for the corporate side domestically has come under pressure sequentially. Is this due to rising cost of funding and the impact of rate differential between the Central Bank on lending on the deposit rate? And how you expect the bank to perform in the second half during Q4, do you expect Q4 fee margin widening domestically, improvement into next year? And the last one, when I look at the presentation also quickly, loan sequentially has been good compared to the peer. But also so you've grown the public sector, so I think the repayment impact for your bank was lesser than the peers. But also it was quite interesting to see the real estate up to 20% from 18%. So do you see more demand on that sector compared to the public sector? And does it change your strategy or goal going forward?

Okay. Thanks for those, Edmond. I think first of all, in terms of hyperinflation, we've -- yes, at the moment, we're forecasting a similar impact in the second half of the year, [ QAR 90 million to QAR 100 million ]. That's based purely on having similar inflation in the second half of the year to the first half. It's as simple as that. We are bound to see some fluctuations in inflation rates month-to-month. So it is a monthly calculation that we'll be doing. So we -- at the moment, our guidance is similar in the second half to the first half. Your second question was on net interest income and net interest margins. Our guidance was that we would increase our NIM by 10 basis points this year. versus last year. We're at around that level now, and we expect that to continue in the second half of the year. Repricing has taken place in the second quarter of this year, especially post the announcements by the Central Bank for the increases, both in the loan rates and the deposit rates. I think your third question, Edmond, was around the composition of the loan book...

Real estate and public.

Yes. So basically, the composition has changed purely as a result of those repayments by the government. Not -- it doesn't change our strategy in terms of focusing on that sector and reducing real estate. There may be -- there will be some changes during the course of this year as a result of those repayments. They just changed the percentages a little bit, but it doesn't change the long-term strategy of the bank.

Can I...

Just on the guidance, forward guidance for the hyperinflation. The QAR 69 million is a figure which has been cushioned a bit by some relief of what we call free provisions, which we had some buffers that we had built up in Turkey. So the real figure would be about QAR 93 million...

QAR 93 million.

So going forward, assuming this continues, then we should expect QAR 10 million to QAR 15 million per month as the hyperinflation accounting effect for the remaining -- the rest of the year and ongoing.

Okay. Makes sense, QAR 93 million impact, okay, on the income statement. Okay. Perfect. Just on the margin domestically, do you expect -- sorry, on Turkey, do you expect higher spreads in the second half of the year to continue to benefit from Turkey inflation, CPI and the cost of funding?

Yes. I would like to answer this question. Thank you for the question. Actually, in the new context of the macro prudential measures, especially announced by the CBRT and the BRSA, actually, those are a kind of limitation of the Turkish lira lending efforts. So actually, we are going to keep with our existing net interest margin on -- especially Turkish lira book. So we're going to defend our existing levels, especially for the second half.

Our next question is from Waleed.

Waleed here from Goldman Sachs. Three quick questions from my side. Number one, on credit growth outlook. I mean despite the repayments that you mentioned on the public sector side, still pretty healthy growth overall in this quarter. So I just wanted to get a sense of your outlook for the rest of the year. And should we expect the continuation of growth emanating from commercial and real estate sector? Or how do you -- where do you see the growth coming through on the credit side? That's the first question. Secondly, as you mentioned, a pretty impressive expansion on the deposit volumes and you attributed to mainly to low-cost deposits. If you could talk a little bit about the strategy and what's been successful because in this particular quarter, we've almost had down QAR 5 billion of kind of new net deposit origination. So any color on that would be very helpful. And my third and final question is for Kaan Bey on Turkish NIM. Now in the first couple of quarters, it seems the FX guarantee or FX-linked scheme has obviously helped in terms of Turkish lira deposits and keeping that Turkish lira deposit costs around 17%. We've been hearing that the deposit costs are starting to go up substantially on Turkish lira. So I wanted to get a sense of how would you defend the NIM because you mentioned that you intend to defend the NIM. Is it going to be through CPI-linkers or anything else, which will help to defend the NIMs, especially in a period where TL deposit costs are going up?

Can I start or...

Please, Kaan Bey.

Thanks for the question again. The first thing is I would like to say that it's kind of the [ bedroom ] mix to manage our cost of funding on the Turkish lira side. Of course, yes, you're right, we have seen some raises on the Turkish lira deposit rates, standard Turkish lira deposits actually. But at the same time, actually, our focus on the low-cost deposits, demand deposits, thanks to our very strong new customer base, so actually, it helps us a lot. In the meantime, when you look into especially the lending yields, we have seen kind of the parallel rise on the yield side. So that's why I'm saying that even though the cost of funding is going to increase, but at the same time, we have room to you manage and adjust our [Technical Difficulty] it's not going to be any, let's say, macro disruption in the Turkish economy, so. I can say that.

Thank you, Kaan Bey. With regard to the first part of your question about credit growth, our expectation is that in the second half of the year, we'll do an annualized 3% to 5% growth. Part of that is due to, we think, the last quarter, particularly when the World Cup is on, we'll see a slowdown in sort of new loans biggest period because people are otherwise occupied. So that's just our -- why we anticipating that. And therefore, we are going to try and do whatever we can in this quarter and the early part of the last quarter. In terms of where it's going to come from, credit growth is still going to be -- you see the World Cup will have -- I think most of that is already done, most of the infrastructure spend around that piece, so we might see some incremental spending. But I think the majority of it is going to be coming from continued expansion of the infrastructure of the country in areas like the North Field expansion. There's certain onshore works which have to be completed or there will be associated, whether it's shipping, et cetera, associated facilities and services linked to the North Field expansion. The second will be also around expansion of the country's infrastructure like the airport, et cetera. The contracting sector will continue to be involved in that and we will see some business as a part of that. Plus, I think normal, we think there'll be some on the retail side, some residential property growth mortgages, et cetera. We are coming primarily from Qatar residency program, which I believe will get a pickup not so much in this year, but next year, from the visibility from the World Cup. So overall, that's where we see it, but we do see perhaps a little bit of a slowdown in -- not slowdown, but just because people are busy. So the last 2 months are probably not going to be that active in terms of new loan bookings. So it's the next 3 months, which are critical.

And the other question, Waleed, you had was regarding deposit strategy. So look, on the low-cost deposits, which I mentioned earlier, are up 11% year-on-year. This is really a function of the products that we're focusing on, such as remittances, payments and cash management. They do mean that more funds stay with the bank, more funds come into the bank and stay longer with the bank. That's really a prime reason for the increase in deposits, and that obviously helps our cost of funding. Secondly, as I mentioned, the market is very liquid, with high energy prices, the repayments of temporary overdrafts, et cetera. That has meant that we've been able to pick up additional deposits. We're certainly not chasing on rate side and that's why we've been able to maintain our net interest margins and actually increase them from a year ago when it was 2.6% to now 2.8%. Hopefully, that answers your 3 questions.

Yes. I would like to, a sentence, add to Mr. Waleed's question actually regarding the Turkish lira net interest margin. I think the first one is this is a ongoing repricing our existing portfolio. We have a chance to reprice it. So it's an ongoing effort. So it is very important. At the same time, we are on the working capital loan side, very short-term portfolio we have been building up. So those are the enablers in order to manage our net interest margin on the Turkish lira side.

Our next question is from Rahul.

This is Rahul Bajaj from Citi. I have 3 quick questions, if I may, please. The first question is kind of a follow-up on the previous one which was asked, I'm not sure if that was covered. This is on the NIMs in the wholesale business. If I look at the segmental disclosure, NII for the wholesale business remained pretty flat, but assets have gone up. Of course, you have picked up loans there. So NIMs have definitely compressed on the wholesale side in Qatar. I just wanted to understand what is driving this? I mean are you kind of trying to gain market share here with some compression in margins maybe? Or this is just cost of funding related? So any further color there would be useful. The second question is on lending growth, again, asked earlier, but a kind of a follow-up on that. There's been a lot of talk about government repayments and how this is impacting sort of negative loan trajectory in Qatar year-to-date. Just wanted to understand from where you are, I mean, how far or how long do you think this repayment cycle could continue? I mean is there a level where you think, even if oil is -- or oil price or gas price is at current levels, is there a level where you think that the government might just stop repaying or the specific kind of loans, maybe overdrafts, they want to draw down completely? Or you think this is a cycle which might continue for the foreseeable future? So that's my second question. And third and final question on cost. If I look at the adjusted cost number, it appears to be up quite significantly Q-on-Q, actually, more than 10%. Just wanted to understand, is there any one-off there? Anything I should know in terms of the cost increase? Is this a normal run rate?

Thanks, Rahul, let me take those. I think firstly, NIM in Qatar. What we see and what you don't see is that the loan growth happened right at the end of Q2. And therefore, there isn't the interest income impact of that loan growth. So obviously, when you look at it on an average basis, there's no NIM compression. And obviously, you're looking at period end to period end, which will give you a different number. So that's the reason why our NIMs are maintaining not only at domestic level but at a consolidated level as well. So that's on an average loan book basis. Secondly, on the lending growth and the repayments, I think you might have missed what I said is that the last of the repayments was made earlier this month. So as of now, we are completely 0 in terms of those temporary overdrafts. So that cycle has finished as far as Commercial Bank certainly is concerned. And then thirdly, on costs. You're quite right, quarter-on-quarter, there is an increase. And actually, that is wholly related to the hyperinflation adjustments. As I mentioned, the adjustment that is visible is the QAR 69 million, which is the net monetary loss. But there are adjustments within lines as well, which is around QAR 48 million up on income, with QAR 30 million up on costs. So that's why you will see that change in quarter-on-quarter. And hopefully, that helps you in terms of your modeling going forward.

Understood. Just 1 quick follow-up on the second response. You mentioned that the last of the repayment was done on the government overdrafts. But get me if I'm wrong, I see Central Bank data, it says that, of course, the majority of repayment is coming on overdraft. But even the other part of the lending beyond the overdraft to the public sector is compressing. So are you seeing repayments on that part of the book as well? Or for you it has been totally concentrated in the overdrafts?

We haven't seen that. But certainly, what we have seen is delays in new lending on governments. Ones where we've been working on with public sector, they have been pushed back. What might have happened without those energy price increases maybe in the first and second quarter are now slated to be done later in the year and even into next year. So certainly, delays in new lending in that sector.

Our next question is from Waruna Kumarage.

I have a couple of questions. One is a follow-up on the hyperinflation accounting. I want to just understand, if I have to refer to Slide #25 in the Alternatif Bank numbers, we believe we've comparison between 6 months numbers before and after the IAS 29 treatment. So I want to understand whether this net interest income, the difference, is it because of CPI linkers' impact, which is offsetting part of the net point we lost effectively? That's the first question. And the second question is on the provision reversal here, so that -- it actually means that the at the group level benefited from this -- the provision reversal, so the provisions that we see at the group level is net of this reversal, is that the correct way to see it? Those 2 are my questions.

Yes, Waruna, that's correct. Obviously, the numbers you see are net of that reversal. We had started building up additional provisions from Q1 of this year in anticipation of IAS 29. Obviously, it had been announced earlier by the Big Four that they had decided that Turkey would be in a hyperinflation situation, and implementation would be in the second quarter, but it would be effective from 1st of January. And hence, we started building up those provisions, which we've now used against that -- to offset the overall impact. So yes, that's quite right. In terms of CPI linkers, yes, they are part of the overall Alternatif numbers. At group level, just to keep it in perspective, they represent less than 0.5% of our interest income. So it's a very small part of the overall group number.

Okay. If I have to add 1 more question. Now I think earlier question, one of the members in the audience asked about the other comprehensive income, the gain that you recorded. So I just want to understand what is really driving this? Because my understanding was that the net monetary loss you record in the P&L, these kind of equity neutral, so that gets offset. But the magnitude of the gain is far higher than what you record here. So will you be able to -- I mean, shortly explain this? Or we can take it off-line, right -- time consuming?

Yes, Waruna, very shortly. The P&L shows the impact of this year. In the equity, you see the impact of prior years. Just very short and sweet. And we can explain more if you want more details, you can get in touch with me directly. Yes, we have 2 questions on the messages. One is for ABank. Kaan Bey, ABank reported TRY 218 million in Q2. How much of this was due to reindexation from hyperinflation? This question is from Vikram Viswanathan.

Actually, Rehan, maybe you can go on with that because net from the indexation is minus TRY 86 million. After the provision reversed then, we are going to end up with the final net profit TRY 231 million. So this is the overall impact of our sites on the profitability figures.

Thank you, Kaan Bey. And the last question is from [ Rohit Raj ]. What is the driver of the sharp increase in ForEx income, Turkey or Qatar -- quarter-on-quarter?

So on the FX side, definitely in Qatar, we have seen an increase in sales. And as I said, remittance is an important part of our strategy, and that's helping drive up the income. In terms of Turkey, there is a little bit of a swing. They did have FX trading loss in the first half of last year versus a positive contribution in the first half of this year. So there is a variance from a negative to a positive that's helping the overall number. Kaan Bey, anything you would add to that?

I totally agree with you. Maybe I include that our especially treasury transaction, especially on the business side, was very strong. So I can add that. And the trading, of course, right, yes.

We have one last question. We'll take that from Edmond Christou.

Just follow-up on the ForEx. Is my understanding correct that you believe ForEx, at least in Qatar, is sustainable in the second half of the year or this is a factor of volatility in the market? And also on the fees. I can see the fees has dropped sequentially. It will make it very difficult to see what is the run rate for the second half of the year, and we have the World Cup. So is the second quarter is a good run rate for the next of the -- year or go back to 1Q? And the last one is on Turkey. CPI bonds portfolio, what is the percentage of the total credit exposure? Or because you mentioned the balance sheet is fully hedged, I just want to understand if there is room to increase the CPI bonds to mitigate the impact of hyperinflation?

Okay. Certainly, Edmond, in terms of FX, there's no one-offs in there. So it is sustainable in the second half of this year. Fees also, we've certainly been working on fee income generation. So again, we think that first half of this year is a good reflection of what we expect in the second half of this year as well. In terms of the third question on CPI linkers, I think your question is more around capacity to grow that any further. Kaan Bey, would you take that?

Yes. Actually, I can say that CPI linkers, as of total, the security portfolio is around 26% in Turkish security portfolio. So this is the existing portfolio structure. So I can say that, yes, 26% of the total Turkish lira security portfolio is CPI indexed.

So I believe there is a room to increase it in the coming quarters just to mitigate the...

Of course, we have certain attempts in order to build up more. So we are on the track in order to find a proper time in the market. So, yes.

We have 1 last question from -- through a message. This is from [indiscernible]. "My question is on staff cost. In the first quarter, there was QAR 111 million as performance-related costs. And the second quarter, this number is QAR 86 million. Is this number cumulative? I mean the full first half is QAR 86 million or QAR 197 million." [indiscernible], the full first half is QAR 86 million. The staff cost performance related -- the staff performance-related cost is a direct link to the Commercial Bank share price movement. And in this quarter, the share price fell and that's why you're seeing the QAR 111 million cumulatively become QAR 86 million. That's all we have from questions. Joseph, any closing comments, please?

Yes. As always, thank you very much for your interest in Commercial Bank and all the reports, which you write, which we find very informative. And if you have any questions, please feel free to contact Rehan or Zubair. We're always open to providing further details. Thank you very much again, and we'll see you again at the next quarterly call. Thank you.

Thank you. Bye for now.

Bye.

Thank you.

Thanks a lot.