Good day. Welcome to the Qatar Islamic Bank Q3 2021 results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Gaurang Hemani. Please go ahead, sir. Thank you very much. Good day, everybody. Welcome to QIB's Q3 results presentation. We will start with a very quick brief on where Qatar economy stands. Then we will take over to the QIB's performance for the nine months. Efficient yet controlled reopening strategy on back of a successful vaccine rollout plan has allowed Qatar all the sectors of economy back to almost 100% participation from office and workspace. Yet at the same time, they have been very successful in containing the daily new cases down to double digits. Reestablishment of ties with GCC neighbors and strong pickup in the global hydrocarbon demand and prices, especially LNG, has also been very positive for Qatar economy and banking sector. It shall also be a very positive tailwind as we head into 2022. As regards QIB's performance for nine months ended September 2021, we are pleased that our net profits have now reached QAR 2,525,000,000, up 13.9% versus same period last year. This growth comes at the back of a strong balance sheet growth, which our balance sheet size has now reached QAR 186 billion, up 9.4% versus September 2020 and representing a growth of 6.7% for the year. The financing portfolio has reached QAR 127 billion, which is again up 12.3% versus September 2020 and representing an annual year-to-date growth of 6.7%. The bank has also been investing in Qatar government bonds. Our investment portfolio has now reached QAR 42.3 billion, up 16.4% versus September 2020, representing a growth of 13.7% year-to-date. The strong growth in the balance sheet has accompanied by a strong growth also on the funding profile of the bank. The deposit growth has actually outpaced the financing growth. The deposits now stand at about QAR 128.7 billion, up 15% versus September of last year and 9% since the beginning of the year, allowing the bank to bring down its financing to deposit ratio down to 99% from 101% at the beginning of the year. In terms of the asset quality indicators, the bank has been able to contain the non-performing financing at 1.4%. At the same point of time, bring down the stage 2 financing down to 13.8% of the total portfolio. The bank continues to work on improving its coverage. The stage 3 financing coverage has improved from 92.3% at the end of last year to 95% at the end of September 2021. Our other performance metrics, including ROE and ROA, continue to remain strong, thanks to the strong operating performance that the bank has been showing. Our operating income has reached QAR 4,542,000,000. That is up 13.3% versus same nine-month period last year. Various cost management initiatives have allowed us to reduce our cost base by 3.1% compared to last year, bringing the absolute operating cost down to QAR 797 million, representing a cost-to-income ratio of 17.4%. We continue with our conservative risk management policy and continue to allocate significant portion of operating profit to build balance sheet resilience. Our financing provisions have reached QAR 1,194,000,000. That is up 24.3% compared to the same period last year, bringing our annualized cost of risk for first nine months to up to 1.25%. Our operating income growth comes from our ability to maintain our financing and investment income, which is marginally below the last year nine-month level, coming on at the back of strong balance sheet growth and yield management. While we had strong growth in the fees and FX income, we've witnessed a significant reduction in our cost of funds contributing to the strong operating performance that we have seen so far. As said, all this has resulted in the bank's net bottom line to reach QAR 2,525,000,000, as I repeated, up 13.9% versus the nine months last year. I'm done with my brief presentation. We'll take up any questions. Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. Again, that is star one to ask a question. We'll take our first question from Leah El-Haj of Bloomberg. Please go ahead. Yes, hello. Thank you for the conference call and for the information. I just want to ask if you expect the cost of fund to rise as the CASA percentage has actually fallen, and if you have an Islamic structure for profit sharing for deposits and other Islamic banks are actually expecting cost of fund to increase. I was wondering if it would be the same for QIB also. Well, our CASA share has been fairly, let's say, stable. You can't just look on the month-end number, on the quarter-end numbers, et cetera. Even on a quarter-end number basis, our CASA share is about 39%. We continue on an increasing deposit base, which is fairly healthy compared to other, whether, say, other conventional banks or other Islamic banks. In terms of the increase in cost of funds, if you look at our cost of fund trajectory, I think that has been very significantly benefiting our bottom line performance. In fact, our cost of deposits have dropped from, if I just do a quarter-on-quarter comparison, Q3 2020 was 1.7%, and for this year it's almost been, around 1.3%. Going forward, I think there are a lot of positives that really should help us in able to contain the cost of funds, as I had mentioned. There's a significant improvement in the overall sentiments and the, let's say, credit position of Qatar. I think thanks to both the fact that we have re-established normal relationship with the GCC neighbors as well as the strong hydrocarbon prices will also allow the government to pump in more liquidity back into the system. Taking these into considerations, I think we are not only seeing improvement in the domestic deposits, but we're also seeing significant flow back into the foreign non-resident deposits as well. Nothing to indicate at this point of time that the cost of funds should see any major increase. There could be one or two basis points up or down, but we really don't see any significant movement at this point of time, at least for the coming six months. Thank you. We'll take our next question from Janany Vamadeva of Arqaam Capital. Please go ahead. Thank you, Grant, for the call. I just have a couple of questions, if I may. The cost of risk has improved for the first time this quarter since Q2 '20. I'm just wondering whether you're sort of seeing some improvement or whether the macro picture has changed, what's driving this? Should we take this as the trend going forward? If you could throw some color around that would be helpful. My second question is on the FOL EGM. We saw the BOD and the cabinet approve the FOL increase, but we have not seen the date for EGM. If you could give some color on that would be helpful as well. Appreciate it. Thank you. Okay. On the first part, Dibyaprit, to say that we would again say that we really do not look into on a quarter by quarter in terms of the cost of risk. If you go by that logic, I think the first quarter, we really created significant impairment for financing assets. As we keep going at the end of each quarter, we assess the requirement in terms of what would be given the portfolio that we have, given the year-to-date operating performances that we have built and to see what asset quality pressures that could be building. I think given the fact that this year we had started with a very strong, let's say, allocation towards financing impairment. We had to just take a call in terms of where do we stand at the end of nine months on a year-to-date basis to come up to say what is the fair level of impairment required. It would not be a, let's say, way to look to say that just because we have a quarterly drop, that's going to result in a sequential quarterly drop as well. The way we monitor and manage is in the sense is what is our operating performance, what is our ability to allocate more provisions? I think we had been building significantly, predominantly allocating large part of it to stage 1. The stage 2 portfolio has been coming down. As we head into the last quarter of the year, there is a much more, let's say, detailed evaluation and analysis of the portfolio that would really drive to say where would our year-end number end up. In general, our policy remains same to say that if we have strong operating performance, we will continue to build up balance sheet resilience. In terms of your second question on the Foreign Ownership Limits, yes, the cabinet decisions have been passed. Again, we have gone through a period of, let's say, a summer period where, kind of we wanted to make sure that we have all the relevant, let's say, requirements in place. We wanted to ensure that we could be able to get our EGM quorums, et cetera, and also wanted to get all the other necessary clearances before we could hold an EGM. As we speak, we are going through the process. Would not be able to give you a timeline and by which way we would be able to complete. Yeah, we are working towards it. That's all I can tell you at this point of time. Thank you, Guram. Thank you. As a reminder, if you'd like to ask a question, please signal by pressing star one on your telephone keypad. We'll take our next question from Edmond Christo of Bloomberg Intelligence. Please go ahead. Hello. Good afternoon. Thanks for taking my question. I have two questions for you. The first one is, I just want to understand your outlook for credit growth going into next year. We hear from your competitor, its private sector growth will probably be dominant on the credit growth outlook for next year, which is an area you are a big player in. I just want to hear your view on the demand on the private sector as we move into next year. How do you see the pricing for loan? Is it more competitive going into next year and could have some impact on the asset deals for the bank? This is the first one. The second question I do have is on, you still have very high buffer on stage 1 in term of provisioning. I do understand partially why you do sit on a large provision on stage 1. In case of downgrade from stage 1 to stage 2, you have enough provision to move with the loans. The question I do have, why the business structure is different than the rest of the peer in the region where everyone is on 40 to 20 basis points on stage 1, you are on 2.2% coverage on stage 1. Why the business model is different, and how you can explain it to me? Thank you very much. Yes. Going to the first question in terms of the saying that where do we see the asset growth coming next year? I think the asset growth will come both from the private sector as well as the public sector. I think our take is that as we go into the closing phases of the 2022 World Cup, I think there will be lot of excitement and there will be lot of consumption-related spending, both at the level of the government as well as at the corporates and the private individuals. I think in order to make the event successful, there will be participation from every area of their economy. I think it's an event where everybody would like to be there. This would represent an opportunity not only to be able to provide some short-term financing to the government, but also working capital for corporates as well as to individuals. We believe all sectors should benefit. Yes, the high level of hydrocarbon prices, especially the LNG prices that have hit some exceptionally high levels at some point of time in September and October, whereby it is even, let's say, not only about the levels, but it's also in terms of the spread between oil and gas we have never seen like those before. I think this high level of LNG prices is going to help liquidity. Let's also accept that the spot LNG trading is on a very limited basis. I think majority, more than 78% to 80% of the business is done on long-term contracts. In general, you will see the benefit of the higher LNG prices in form of higher liquidity for the government, which could really, let's say, dampen the growth that you could expect on the government side. I think we are looking into it. As I was explaining to you, the way to look into exposure to the government could be both by looking into directly at the level of financing, or you could look into how you can improve your investment portfolio, et cetera, because that's also exposure to government. As I was explaining to you, we have already done lot of work on that front, and our investment portfolio has actually grown from the beginning of the year by almost QAR 5 billion. That's about 13.7%. That's a way to look at it, to say whether I do government financing through financing book or through my investment book, it still works the same. We continue to look towards the public, increasing our exposure to government and public sector, both through investment as well as through financing books. Pricing-wise, I think the pricing has been coming down. I really don't think so that there's going to be any incremental pressure just because there are expectations that there are going to be more competition in the private sector. I don't think so. Maybe there could be some marginal impact, but we don't expect anything significant on that front. On the second question in terms of our provisioning and ECL strategy, I think there are different organizations work on different strategies. Some organizations build incremental coverage through their stage 3 coverage ratios, which in some cases could exceed even 100%. Some go through higher stage 2 coverage ratio. We have been working towards increasing the allocation of the higher operating performance to stage 1. However, as we go to the end of the year, there will be a natural reallocation happening depending upon where we eventually end up with our NPL ratio. We might see a small uptick as we go into the last quarter of the year. I think we are well positioned to be able to cover that. That's what is reflected in our high coverage of stage 1 ECL. Thank you. This is very helpful. Any comment on if the credit growth for the private sector next year, or the overall credit growth will be slower than this year? I mean, will be slower than the high single digits? Private and public together. I think it will continue to remain somewhere between 7%-9%, both public sector and private sector. As I said, the biggest challenge happens is in terms of anticipating the public sector growth. I think this year we have not seen any major repayments coming in by the government on the public sector side. Yeah, there have been periods where they've been high, and they've come down slightly. Even for us as well, if you compare Q2 versus Q3, we have seen. It doesn't matter. It's just that how you are able to look at it on an average basis, I think that is more important rather than a snapshot point of view at the end of each year or at the end of each quarter. I think on a snapshot point of view, we could see bits up and down, but on an average basis, we have seen that the public sector has been higher compared to last year. We don't expect. Brilliant it to go down significantly next year. Okay, brilliant. Thank you very much. We'll take our next question from Zohaib Pervez of Al Rayan Investment. Please go ahead. Thank you, Gaurang, for the presentation. I've got a question on your costs. Basically, your staff cost has declined year-over-year, even quarterly and on a nine-month basis. Your balance sheet has been growing, loans are growing, deposits are growing, mashallah. Do you think this is sustainable? I mean, letting go of people or reducing costs. No on your staff. Go ahead. The 17% you have achieved, the 17% cost to income ratio, do you think that is a sustainable level, or you think this is just probably readjustment at the moment? Yeah. Just two questions to say that I think we are very proud to be one of the few banks in Qatar who actually have not really let go of staff, specifically due to COVID reasons, et cetera. We consider our human capital as very key components. What we have done is progressively is when people have resigned or people have reached their retirement age, we try to challenge the replacement and try to see how we can improve our efficiency. I think I can even tell you that we are again very proud to be one of the few organizations who actually rewarded people through deserving candidates based on the performances to provide salary increases, et cetera, even for this year, even though we came out of the back of a very difficult year last year. I would say the level of reduction in the cost is not a reflection of the fact that we've been trying to cut down on staff, or we are trying to cut down their salaries, et cetera. It's on the contrary, trying to take advantages of the various investments that we have been doing on the digital front and on the technology front to make our processes and operations much more efficient, to be able to really get the advantage of all the spend that we have been doing on that front. In terms of sustainability of these, I would say, extraordinary cost to income ratio levels, we wish we would be able to do that. On a cost to income ratio, I think that would be purely dependent upon how our top line is able to grow. We will continue to remain, let's say, efficient in terms of our spending. However, as we keep going forward, and as I was saying that technology you require consistent and regular investments, and that's what is going to put pressure, whether it be on the depreciation side or whether it be on other technology maintenance related expenses, et cetera. We could and might see some uptick going there as we keep going. We continue to remain committed to investing in our digital banking and other technology related initiatives that keep happening. With the ultimate objective is that the spend has to be eventually either be generating revenues significantly or help us in improving efficiencies in our other operating expenses. Going forward, I wish we would be able to maintain this cost to income ratio, but I think even if we move up, let's take a simple example. Even if I move by 0.5% up or 1% up over next one year, I would still not fret because we know it's not about the absolute level of the cost or the cost to income ratio%, but in terms of where your cost increase is going towards. Even if it results in a short-term increase in the cost to income ratio, as long as that it is going to fulfill our medium-term strategy and plan of trying to remain one of the most cost-efficient bank in the country, we'll continue to work towards that. Sounds good. Thank you, Gaurang. There are no further questions at this time. I'd like to hand the call back to you. Okay. Great, we can wrap up the call. Thank you, Gaurang, for giving us an update on your third quarter figures. We'll see each other again next quarter, hopefully. Thank you. Thanks very much to everybody. We will see everybody again in beginning of January. Thank you. Bye-bye. Thank you. That now concludes the call. Thank you for your participation. You may now disconnect.