Hello, and welcome to the Qatar Islamic Bank conference call. Please note that this call is being recorded. I'll now turn the call over to our moderator, Shahan. Please go ahead, sir. Thank you. Hello everyone. I want to welcome you to QIB's second quarter and first half 2025 financial results conference call. On this call from management, we have Gourang Hemani, the bank's CFO, and Vinay Balakrishnan, head of business reporting and budgeting and investor relations officer. So, you know, as usual, we will conduct this call with first management reviewing the company's results, followed by a Q&A session. I will turn the call over now to Vinay. Please go ahead. Thank you, Sean. Welcome everybody to the Q2 2025 results call of Qatar Islamic Bank. We'll quickly take you through the main highlights of the first half results of 2025. We are pleased to report that QIB has reported a net profit attributable to shareholders of QAR 2.175 billion for the first half of 2025, representing a 5.3% growth against the first half of the previous year, 2024. The net profit attributable to shareholders for the second quarter of 2025 was QAR 1.2 billion, representing a 7.2% growth against the corresponding quarter of last year. The total assets of the bank now stand at QAR 212 billion, which is up by 5.6% versus December 2024 and up by 10.3% compared to 30 June 2024. Core activities of the bank, represented by financing and investing activities, continue to grow in the second quarter of 2025. Financing assets as of 30 June 2025 now stand at QAR 131 billion, having grown by 4.4% compared to December 2024 and up by 3% compared to June 2024, driven by personal and private sector credit. Investment securities reached QAR 60.1 billion as of 30 June 2025, up by 13.4% against December 2024, and a growth of 22% compared to June 2024, with most of the growth driven by investment in State of Qatar sukuk. Customer deposits stand at QAR 135 billion as of 30 June 2025, registering a growth of 8% compared to December 2024 and up by 10% compared to June 2024. Finance to deposit ratio of the bank was 96.8% as of 30 June 2025, which is one of the lowest among its peer banks in Qatar, reflecting the bank's strong and stable liquidity position. On the profitability front, total income for the six months period ended 30 June 2025 was QAR 5.64 billion compared to QAR 5.6 billion for the same period in 2024. The net operating income of the bank after profit payments to sukuk holders and depositors reached QAR 3.28 billion, up 3.4% against the first half of 2024. The bank continues to strive to improve efficiency through digitization and automation, supported by strong cost management discipline. Therefore, helping it to contain its operating expenses at QAR 538 million, representing a marginal increase of 2.7% as compared to the first half of 2024. As a result, the bank was able to maintain its cost to income ratio around 16.4%, which continues to remain the lowest in the Qatari banking sector. The bank has taken advantage of good operating performance and continued to build total provisions of QAR 549 million for the impairment of financing and other assets and any other contingencies, including tax liability of QAR 233 million under the domestic minimum tax rules under global BEPS Pillar Two guidelines that are yet to be published by the General Tax Authority. On the asset quality front, QIB was able to maintain the ratio of non-performing financing assets to total financing assets at 1.75% and maintain a healthy coverage ratio for non-performing financing assets to 95.1% as of 30 June 2025. The bank was also able to improve its stage two coverage ratio to 8.5% against 5.1% as of 30 June 2024 and 8.3% as of 31 December 2024. These actions taken by the bank reflect the bank's strong risk management framework as well as the conservative provision policy. The results continue to demonstrate the bank's ability to generate strong, stable, and sustainable profitability for its shareholders, with a return on average equity of 15.2% and a return on average assets of about 2.1%. Our capital adequacy ratio, as per new Basel Guidelines, is a healthy 22%, giving us sufficient cushion for future balance sheet growth. The bank has declared the distribution of interim cash dividend to shareholders of QAR 0.4 per share, that is 40% of the nominal share value, payable to eligible shareholders as of the close of trading on 24 July 2025, subject to regulatory approval. I hereby hand over back to Sean for any Q&As. Thank you. Operator, we can open up for Q&A, please. Thank you. If you'd like to ask a question, you may press star and the number one on your telephone keypad. Again, that is star and the number one on your telephone keypad. If you'd like to withdraw your question, you may also press star one again. And our first question comes from the line of John Peace from UBS. The line's open. Hi, thanks very much for taking the question. The first one, please, is do you have any updates on your key guidance line items: loan growth, fee growth, net interest margin, et cetera, also including the tax rates? And then the second question, just a sort of technical one on your divisional reporting. There's a new unallocated division that appeared this quarter. Could you just talk to us a little bit about how the cost of risk has sort of played out across your divisions? It looks like it might have been quite low in corporate. And then how does this unallocated division fit within the group? Thank you very much. Good day, everybody. And thank you for the questions. In terms of our guidance, in terms of loan growth, fee growth, et cetera, there is no major change compared to what we had given in Q1 of last year, which says that we expect the loan growth for the year to be around 5%-6%, driven predominantly by private sector and personal sector, and personal banking. Fee growth, also, we have said that it'll be within the low mid, low single digit, mid single digit kind of a thing. So around 6%-7% fee income growth. That's the target that we see. First half of the year, our fee has grown by about 4.5%, and we expect that by year-end, it will be around a similar 5%-6% range. Other than that, if there is any other specific guidance that you require, we'll tell you. In terms of the unallocated, this is predominantly provision for any contingencies that could come in case the tax guidelines are finally published by the tax authorities and we are required to pay any taxes. Our current assessment, we believe that we are not required to pay any taxes based on the draft guidelines that have been circulated by the General Tax Authority on the Global Minimum Tax and the Domestic Minimum Tax for consultation purposes. But, however, we still need to wait, and based on that, we'll take a final call. So, effectively, unallocated impairment is for the contingencies in case there are any tax-related hit we might have to take this year. Hope that answers your question. Yes, thank you. In that case, it seems like the underlying cost of risk might have been quite low in the quarter, maybe particularly in the corporate division. Is that the case? And what's your expectation for the cost of risk sort of excluding these unallocated provisions? Thank you. It's like we've been telling this for the last couple of years that, you know, our cost of risk is not driven by the real quality of the portfolio, but it's more because of the fact that if we are able to generate good operating profit, we will continue to build provisions and impairment. And if you have seen even in the last year in 2024 or even in 2023, even if we had allocated large amounts to corporate, et cetera, the majority of them was allocated to stage one, which are more precautionary provisions or precautionary cost of risk rather than real cost of risk. So, as of now, from the way we look, if you look at our asset quality, our NPL ratios have been fairly stable. Our coverage for stage three is about at 95% and above. Stage two coverage has also been significantly improved. So, again, we'll keep monitoring how the asset quality evolves. But in terms of the need for the cost of risk continues to remain low. However, if we do have good operating performances and if we finally are able to get a clarity that no tax-related contingencies that we need to build, we may again allocate to corporate banking and into stage one or stage two, as the case may be, because, again, these are more, let's say, precautionary cost of risk or provisions that we keep building as the bank's policy. Understood. Thank you very much. In summary, there is no specific need or guidance in terms of the cost of risk for corporate banking. It will be driven by how the performance of the bank continues to evolve. Thank you. Thank you. Our next question comes from the line of Salome Skhirtladze from Bloomberg. The line's open. Excuse me, your line is staticky. Hello. Can you hear me now? Yeah, we can hear you now. So I have a couple of questions. First of all, thank you for the presentation. In the Q2, on the loan growth, we see some muted growth. Could you elaborate whether it's seasonal and do you have some idea on the expected pipeline for the second half of the year? And on the recovery, there's some amount on the recovery for loans. Do you see some pipeline or do you see any trend that indicates to a potentially higher recovery rate over the year? And maybe the third one on the deposit and funding side, could you please break down the share of the government deposits from the growth in the second quarter? Thank you. Okay. Thank you very much. So I'll take your question, sequentially. On the first question related to the loan growth, yes, the loan growth, when you say it has been muted, again, it's, I will continue with the guidance that we had provided in the first quarter, whereby we had said that the large part of the growth came in in Q1, from the government-related, short-term, credit growth, the public sector credit growth. And we had clearly said that we don't expect this as a trend to continue. And I think our guidance was quite fair because we have seen repayments coming from government in their short-term borrowing. So while the government, we have seen almost, repayment of roughly around QAR 3 billion-QAR 4 billion on the government side of it in the second quarter. However, a large part of it was more than compensated by the growth in personal banking and private sector, corporate private sector. That's the reason why we continue to maintain that our loan growth for the year, the financing book, will continue to grow in the range of around 5%-6%. However, what one needs to keep in cognizance and that we keep telling, time and again in our calls with investors to say our take on the private public sector exposure should not be purely looked at from the loan book perspective, but one should also consider the significant balance sheet growth that comes from investment book, which is predominantly in the state of Qatar. If you look at it in the second quarter this year, our investment book has almost grown by about QAR 6 billion-QAR 7 billion, almost everything coming from State of Qatar. State of Qatar, in this case, we saw there were repayments on the lending side of it, but we increased our exposure to the government through sukuk side. On the recoveries, bit of it, I think it is we do keep getting recoveries on a regular basis. We continue to pursue, given the fact that we do 95% coverage as a kind of a precautionary policy. We keep any repayments which happen from the customers do end up showing as recoveries in our ECL movement table. So what you see is a kind of follow-up that we keep doing with our corporate and personal banking customers on a regular basis. There's no specific trend, but yes, we did have a large recovery in Q4 of last year. In Q1 was a carry forward for a few of the customers that were there. We recovered in Q4 last year, and then some of the recoveries came in first quarter of this year. In terms of the deposit side of it, our total deposits as compared to Q1 of this year has grown by 1% and compared year to date has grown by 8%. If you look on a year-to-date basis, majority of the growth has come from the government side of it, where the growth has been more than 10% for the year. As of now, our total government deposits stand roughly around 33%-34% of the total deposits. Hope that answers your questions. Yes, thank you. Thank you. Our next question comes from the line of Nikhil Phutane from CBFS. The line's open. Yeah, hi. Good afternoon, sir. Thanks for the question. Just one last question, actually. This is regarding the provisions which you normally book, you know, on your P&L statement. You know, we have seen in the past, you know, under the ECL model and the P&L statement, normally it doesn't match. But of late, in the first and the second quarter, we do see a difference. I mean, can we know what the difference is arising from? Recoveries or something else? I think I just clarified some time back that we are building provision for contingencies related to any potential tax-related payments that we could be made in case if the domestic minimum tax guidelines are not in line with the current assessment that we have in place related to our tax liability. So that's that was exactly the answer I gave in the first to the first query from UBS, whereby that's all of it is reported if you in the unallocated if you go by the segmental reporting numbers. Okay. Okay. That's roughly 200 and that's roughly around 233 million. That would be the kind of difference that you have out there. Okay. So, I mean, you mentioned about your loan growth also, you know, 5%-6%. You're of course, your deposit base also increased, I mean, during the quarter, and the TR ratio has come down. So can we say that, you know, your loan growth could be more on the higher end, I mean, going forward in the second half? Deposit growth has any when we look at the balance sheet. We look at a holistic basis and rather than not on a piecemeal basis. So if you look at it, yes, while my loan book may not have grown significantly, we have grown our investment book. At the end of the day, when you want to fund your investment books, you can fund it through deposits. You can fund it through market funding. You could fund it through market funding in form of sukuk, bank borrowings, et cetera. So when in our asset liability management policies, we do not look at product-by-product basis, but yes, in general, we tend to go for more stable kind of a funding. I think customer deposits tend to be one of those, and we have tried to focus on that. So I think in terms of the liquidity ratio, as we mentioned, our loan financing to deposit ratio sits at 98%, which is roughly below 100% average that we usually maintain around that level. However, given the fact that we had a significant growth on our investment book, we try to fund to our deposit growth. If there are better, let's say, funding opportunities available that allows us to have a better asset liability mix both in terms of the maturity as well as the pricing, we'll definitely look into rebalancing it. But at this point of time, we are fairly comfortable with our funding mix and profile vis-à-vis our asset side of it. Okay. So, I mean, one more, if I may, in terms of your LNG project which is going on, do you see further traction coming, especially from the contractors going forward in the second half? We continue to work on it. We do expect the growth to be coming from that sector of it. I think that's one of the key three growth areas for the country. There will be a lot of, if not directly through LNG construction related to contractors, you will see more in terms of the services sector, whether it be shipping, whether it be manpower services, or the other facilities that are facility management. Those are the areas that will, from the North Field expansion, let's say, percolating effect that we see across the different sectors along with some of the contracting-related activities as well. Okay. Thank you, sir. Thank you. Thank you. Thank you. Our next question comes from the line of Haya Al Fulaij from NBK Wealth. The line's open. Hi. Thank you for taking my question. So I just had a quick question on your asset quality. So could you just provide some color on your outlook for stage two loans? So do you specifically expect the portion migrating to stage one, or is there a risk for further deterioration into stage three, or should we just expect them to remain in the stage two over the near term? Thank you. Thank you very much. So all I can say is at this point of time, we are fairly comfortable with our stage two levels that we have. I think while we continue to monitor them, we do not see any material deterioration to stage three. You could have odd ones that could move from stage one to stage three or stage two to stage three, depending on less than until some events happen. But at this point of time, we are fairly comfortable with the level of stage one, stage two, stage three that we have in our portfolio, while there is always a room to move up to stage one, or some may move to stage three. But as of now, we don't see any clear indications or guidance that I can really say that we are expecting a significant move. Okay. Thank you. Thank you. Thank you. Our next question comes from the line of Wei Chao from Al Rayan Investment. The line's open. Gourang, thank you for the update and the comments. This is Shabbir Kagalwala from Al Rayan Investment. Just need an update on any progress on the assets held for sale at the moment. We are working on it. We have got certain regulatory approvals have been obtained while it needs to go through a process. If everything goes as per plan or schedule, we expect to finish it within September-October period. All right. Either it could be in Q3, or it might spill over to October kind of a thing. Okay. And are we expecting any gains from this transaction, or? At this point of time, we are still doing the evaluation. While the in principle bid have been accepted, it's going through due diligence. So it will be very difficult for me to quantify whether we could have any potential gains or whether we have to take some kind of haircut. But again, whatever it is, we don't expect it to be having any material impact on our bottom line. Right. And you mentioned that you have added a lot of investments and particularly to the State of Qatar. So right now, what would be the average yield on the book you are running? I do not have the average either with me readily available. Shafeer, you can reach out to me, and I will be able to share it with you, but if you look at it, in overall, if I look at my yields, I don't think so they are materially different than what we have been having. Most a large part of the assets what we have been acquired are at the current market yields only, so there is no major deviation compared to what the market rates are going on. Right. All right. Thank you. Yeah. Thank you. Our next question comes from the line of Yavuz Uzay from Millennium Capital. Hi. Hi. Thanks for the presentation. And I think, you may have touched upon this one, but I want to clarify again in terms of the cost outlook. In the first half versus the first half of last year, you have costs going up around 3%. For you, what kind of cost inflation should we be looking at? Into next year, do you think that cost should grow in line with the business growth, or are there any additional investments that you're going to be looking at, or are there any measures you can take to see less cost growth than business growth? Can you give us a bit more on the cost outlook, please? I think I think in terms of the cost, I think I really must say that even if you are seeing a 2.7% growth, which is well below or in line with the inflation rate, so I really don't think so that there is any major really cost growth that has happened. We don't see any major change in the outlook. We could again see the cost growing by about 3%-4% by the end of the year, if you want to compare it with last year. But overall, I think, in terms of where we see our cost-to-income going forward, I think we are at a very healthy level of 16.5% range. I really don't think so there is any room to further improve. If it comes, it will be more than welcome. But I think if we are able to achieve and continue to maintain what we have been doing, I think that will be a very, very good outcome both for the bank as well as for the investors. We still as regards investments, the bank continues to make investments on a regular basis. However, what happens is that it has followed a kind of a bit of a cycle whereby certain investments complete their depreciation cycle and new assets keep getting onboarded. However, as we have been mentioning, that any investments that we do in technology, et cetera, we try to make sure that we extract other operational efficiencies that could come from these investments. Either it could be through saving of expenses or we expect improvement in revenues whereby helping the bank continue to maintain its very, very strong cost-to-income ratio. Okay. That's very clear. Thank you so much. Thank you. Thank you. Our next question comes from the line of Andy Brudenell from Ashmore. The line's open. Hi there. Yeah. Thanks very much. Most of my questions have been answered. Apart from, sorry to do this one more time, but just so I understand, the total provision taken for tax is QAR 233 million. Yeah. Is that correct? Yeah. And so that suggests. Yeah. Am I right in thinking that therefore means that the first half provisions for other provisions for loans, et cetera, is about 316 or something like this? So like 45-odd basis points. Is that correct? Yeah. Yeah. Okay. Yeah. Is that the sustainable level? Because I think guidance was just for a slight decrease in cost of risk. This would be a reasonably healthy drop in the cost of risk similar to what you achieved in 2024. Is that the correct sort of direction of travel? Yes. And it's as of now, we are very well covered in terms of our asset quality provisions that we have. It is not a need-based cost of risk. As I explained earlier, it is more driven by how the bank is able to perform. However, as we keep going unless and until the asset quality significantly deteriorates, the trend goes towards to say that the cost of risk has a room to go down. Right now, this year, again, it's a transition year. What we have been trying to do is we are looking at the overall from our perspective. As I said, if the tax liability doesn't come, we will again reallocate it back to cost of impairment or cost of risk for financing, et cetera, or if we can use it for any other purposes if need be. So cost of risk, you will need to more look into how our asset quality is evolving, which has been and which has not been evolving significantly, which has been fairly stable if you look at it in the last one or two years. So from that perspective, I can tell you is that the need-wise, the cost of risk remains low. What we build as a cost of risk will be driven by how our operating performance keeps evolving. Yeah. No, no. Got it. Got it. Got it. And then I guess the one area that it would be good to see improvement, and we have seen some, since the end of 2023, is kind of the Stage 2 loans figure, which I think was up slightly in the second quarter. Can you talk a little bit about that? Is that a matter of continuing to negotiate with the central bank, or are you waiting for another sort of slew of permissions to be allowed to. Absolutely. Move it back to stage one, or what's going on, please? Again, there is no negotiation with the central bank. All we are saying is that first, we need to be comfortable. We need to be happy. And then we need to go and take approvals from the central bank. So there's no negotiation as such, process. From my understanding, it's that they often say no. So in that sense, it's a negotiation. Like. Well, if it's. If you prove that it's cured, it's not an automatic negotiation. There is the given or not given depends upon what case is being presented to them, right? So it's a question of. I'm sorry. Okay. I call that. Yeah. Challenging. But okay. All right. No, no, no, no. No, it is not called a negotiation. If the case being presented to them is very clear and fair to be upgraded to stage one, they definitely go and approve it. However, if the objective is to just improve the ratio without having the right support to it, definitely any regulator would come and have an objection to it whereby it is not driven by the merits of the case. So I would not call it a negotiation. They do a very fair assessment based on the cases that are presented to them. It's an approval process that is there that applies even when you to stage three to stage two or stage two to stage one or even when you want to or the downgrade process. That's the way it is. But it is, I would not say that there is some level of arbitrariness that is involved in it or there is some kind of a negotiation. I just don't like the word negotiation. I'm sorry. I'm sorry. I'm sorry. Now, let's not worry about it. Okay. All right. No, no. It's fine. Things are okay, but, you know, we'd like to see Stage 2 lower. So yeah, let's hope that that happens over time. But otherwise, yeah, a very good set of results. Thank you very much. Thank you. Thank you. Our next question comes from the line of Ravi Musa from QIC. The line's open. Hello. Hi, gentlemen. Thank you for the call. This is Bijo here from QIC. My question is on the dividends. So there has been a significant increase in the first half dividends, which will be paid in a couple of months. How should we think about the full-year dividend? Because are you looking forward to progressive dividends, or is it more you are equalizing both halves? Again, for the dividends, all I, as a management, can guide you by saying on each dividend distribution date, the board are presented with various scenarios that take into consideration net profit, capital position, how the peer group are performing, what dividend distributions, what trends that we are seeing, and they decide the dividend that they deem fit. At this point of time, given our level of capital adequacy and the profitability, they saw an opportunity that the interim dividend can be raised to 0.4 QAR. I do not have any specific guidance for you for the year-end at this point of time because, again, we'll be presenting various scenarios. In terms of our ability to give dividend, I think we are in a very strong position where our capital adequacy is the amount of internal capital generation that will happen irrespective of what is the level of distribution that happens, both to take care of the minimum requirements of the central bank as well as for the growth requirements that we have. So we will have to see how the board comes up with at the end of the year. At this point of time, they were very comfortable with the 0.4 dividend that they declared and approved. Okay. Thank you. I have a second question on your cost of risk. So, excluding the recoveries, what is the average cost of risk on the book? I think I've answered two times already whereby I said the cost of risk is not driven by the quality of the asset, but it is more driven by how our operating performance is. So if you look at our coverage ratios and then look at the asset quality profile, we are fairly well provided. In fact, our stage one coverage ratio is way, way above the market normal. That goes to show the provisions that we have and also shows the ability that the bank has in order to be able to maintain the cost of risk that are more consistent with how the operating performance of the bank evolves. Understood, and my last and final question is on the interest rates. How do you see the liquidity scenario in the local market, given the PC deposit rates are around 4%, between 4.25% to 4.5%? So how do you see generally the liquidity scenario? I think the liquidity scenario continues to remain pretty good as I was explaining to the question from the lady from Bloomberg, whereby we saw that the government is also significantly increasing injecting the liquidity that can be seen from the growth that we had in our government deposits. Overall, the cost of deposits again have come down compared to what we have seen in the past. There will always be some kind of, let's say, short-term upsides and downsides depending upon various events that could be evolving. But in general, we are fairly comfortable with the liquidity position. You can also look from the fact that we took we also be able to issue sukuk in the second quarter for almost QAR 750 million. Our target was 500 million. But, given the way the market responded to our credit name, we were able to raise $750 million at what was, which so far has been the lowest coupon achieved by any FI in the GCC market so far. Okay? Again, it could change today or tomorrow. You never know. But in the sense, all I'm trying to say is that Qatar as a Qatar and QIB as a credit continues to attract very decent liquidity from both domestic as well as international investors. And our strong position in the private sector as well as our relationship with the government sector continue to be able to achieve a fairly decent cost of funding for our portfolio. Understood. Congratulations for that. Thank you. That's it from my side. Thank you. Now, our next question comes from the line of Ashraf from Goldman Sachs. The line's open. Thank you. Thank you for the presentation. I guess most of my questions have been answered. I just have one. I think you provided NIM guidance earlier in the year saying you expect it to be broadly stable year on year, with expectation of lower rates. Do you still hold that, stable expectation in terms of your NIM profile through the remainder of the year? Thank you. Yep. Again, you need to look at it as to which segment of it. From our financing, NIMs have been fairly stable. If you want to look at to do the overall NIMs, again, it could be slightly impacted given the fact that we are investing in low-risk assets in terms of Qatar government support. So the investment side of the thing, maybe if you do on an overall NIM basis, given the weightage of the Qatar, Qatari support has gone up, you could see a slight compression. But then you need to look into the other aspects of it to say that those kind of assets come without any cost of risk, very low operational costs, et cetera. All I'm trying to say is if you want to look at it, sometimes you will need to segment it. We still hold our guidance to say that our financing NIMs will continue to remain stable in line with what we have achieved last year. Okay. Very clear. Thank you. Thank you. Thank you. There are no further questions. I'll now turn the call back over to our moderator, Shahan, for closing remarks. All right. If there are no questions, we can wrap up this call. Thank you, Gourang. Thank you, Vinay, for giving us an update on the second quarter. And we will pick this up again in the third quarter. Goodbye. Thank you, Sean. Thank you, everybody. Thank you. Thank you. Thanks. The meeting has concluded. Thank you all for joining. You may now disconnect.