Interim report
Page 1
Qatar Islamic Bank (Q.P.S.C.) INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 SEPTEMBER 2026
Page 2
Qatar Islamic Bank (Q.P.S.C.) INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 September 2026 Contents Page(s) Independent auditor’s review report 1 Interim consolidated statement of financial position 2 Interim consolidated statement of income 3 Interim consolidated statement of comprehensive income 4 Interim consolidated statement of income and attribution related to quasi-equity 5 Interim consolidated statement of changes in equity 6 Interim condensed consolidated statement of cash flows 7 Interim consolidated statement of changes in off-balance sheet assets under management 8 Notes to the interim condensed consolidated financial statements 9 - 27
Page 3
QR. 99-8 RN: 417/JK/FY2027 REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION TO THE BOARD OF DIRECTORS OF QATAR ISLAMIC BANK (Q.P.S.C.) Introduction We have reviewed the accompanying interim consolidated statement of financial position of Qatar Islamic Bank (Q.P.S.C.) (the “Bank”) and its subsidiaries (the “Group”) as at 30 September 2026, and the related statements of income, comprehensive income, income and attribution related to quasi -equity, changes in equity, condensed consolidated statement of cash flows and changes in off-balance sheet assets under management for the nine-month period then ended, and other explanatory notes. The Board of Directors are responsible for the preparation and presentation of this interim financial information in accordance with Financial Accounting Standard (“FAS”) Interim Financial Reporting FAS 41 issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (“AAOIFI”) as modified by the Qatar Central Bank (“QCB”). Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and cons equently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with FAS 41 issued by the AAOIFI as modified by the QCB. Other matter The interim financial information of the Group for the nine-month period ended 30 September 2025 and the consolidated financial statements for the year ended 31 December 2025 were reviewed and audited respectively by another auditor who expressed an unmodified conclusion on that information and an unmodified opinion on those statements on 22 October 2025 and 15 February 2026 respectively. Doha - Qatar For Deloitte & Touche 14 October 2026 Qatar Branch Walid Slim Partner License No. 319 QFMA Auditor License No. 120156 Deloitte and Touche – Qatar Branch Burj Alfardan Building Al Majdami Street Lusail P.O. Box 431 Qatar Tel: +974 443-41112 Fax:+974 4442 2131 www.deloitte.com
Page 5
Qatar Islamic Bank (Q.P.S.C.) INTERIM CONSOLIDATED STATEMENT OF INCOME For the three and nine month periods ended 30 September 2026 The attached notes 1 to 22 form part of these interim condensed consolidated financial statements. 3 For the three-month period ended 30 September For the nine-month period ended 30 September 2026 2025 2026 2025 (Reviewed) (Reviewed) (Reviewed) (Reviewed) Note QAR’000 QAR’000 1B QAR’000 QAR’000 Continuing operations Net income from financing activities 2,287,628 2,289,808 6,696,107 6,846,010 Net income from investing activities 451,884 479,468 1,435,146 1,281,484 Sukuk holders’ share of profit (163,299) (143,964) (472,063) (374,432) Total income from financing and investing activities, net 2,576,213 2,625,312 7,659,190 7,753,062 Fee and commission income 381,170 342,315 1,082,292 1,006,885 Fee and commission expense (137,568) (120,322) (382,517) (340,625) Net fee and commission income 243,602 221,993 699,775 666,260 Net foreign exchange gain 40,455 22,088 81,247 44,358 Net share of results of associates 21,794 23,829 74,450 65,196 Other income 592 5,083 5,052 12,198 Total income 2,882,656 2,898,305 8,519,714 8,541,074 Staff costs (166,807) (161,084) (496,966) (480,131) Depreciation and amortisation (21,893) (16,381) (64,183) (47,954) Other expenses (90,294) (87,642) (283,473) (274,766) Total expenses (278,994) (265,107) (844,622) (802,851) Net impairment (losses) / reversals on investment securities (79) (2) (120) 181 Net impairment reversals / (losses) on financing assets 3,790 10,670 (297,851) (312,067) Other impairment losses (8,499) (17,804) (69,281) (10,309) Net profit for the period before tax and attribution to quasi-equity 2,598,874 2,626,062 7,307,840 7,416,028 Less: Net profit attributable to quasi-equity holders (1,126,692) (1,181,514) (3,319,514) (3,538,225) Net profit for the period before tax from continuing operations 1,472,182 1,444,548 3,988,326 3,877,803 Tax expense (172,268) (155,519) (462,998) (399,440) Net profit for the period from continuing operations 1,299,914 1,289,029 3,525,328 3,478,363 Discontinued operations Loss after tax for the period from discontinued operations 21 - (13,771) - (39,682) Net profit for the period 1,299,914 1,275,258 3,525,328 3,438,681 Net profit for the period attributable to: Equity holders of the Bank 1,299,865 1,279,920 3,525,185 3,455,078 Non-controlling interests 49 (4,662) 143 (16,397) Net profit for the period 1,299,914 1,275,258 3,525,328 3,438,681 Earnings per share Basic and diluted earnings per share and earning per share from continuing operations (QAR per share) 12 0.55 0.54 1.49 1.46
Page 6
Qatar Islamic Bank (Q.P.S.C.) INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the three and nine month periods ended 30 September 2026 The attached notes 1 to 22 form part of these interim condensed consolidated financial statements. 4 For the three-month period ended 30 September For the nine-month period ended 30 September 2026 2025 2026 2025 (Reviewed) (Reviewed) (Reviewed) (Reviewed) QAR’000 QAR’000 QAR’000 QAR’000 NET PROFIT FOR THE PERIOD 1,299,914 1,275,258 3,525,328 3,438,681 OTHER COMPREHENSIVE INCOME Items that may not be subsequently classified to consolidated statement of income Fair value changes of equity-type investments classified as FVTOCI 42,389 (8,943) 69,911 (22,749) Items that may be subsequently classified to consolidated statement of income Exchange differences arising on translation of foreign operations 831 (14,445) (10,013) 52,504 Fair value changes of debt-type investments classified as FVTOCI (16,950) 9,965 (36,464) 7,085 Net change in the share of other comprehensive income of investment in associates: Net change in fair value (15,801) 206 (21,464) (105) Net movement in cash flow hedges – effective portion of changes in fair value (45,749) 12,836 (76,388) (20,967) Fair value changes of investment properties 5,670 6,404 14,832 29,831 Total other comprehensive (loss) / income for the period (29,610) 6,023 (59,586) 45,599 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,270,304 1,281,281 3,465,742 3,484,280 Total comprehensive income for the period attributable to: Equity holders of the Bank 1,270,254 1,291,020 3,465,606 3,522,831 Non-controlling interests 50 (9,739) 136 (38,551) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,270,304 1,281,281 3,465,742 3,484,280
Page 7
Qatar Islamic Bank (Q.P.S.C.) INTERIM CONSOLIDATED STATEMENT OF INCOME AND ATTRIBUTION RELATED TO QUASI-EQUITY For the three and nine month periods ended 30 September 2026 The attached notes 1 to 22 form part of these interim condensed consolidated financial statements. 5 For the three-month period ended 30 September For the nine-month period ended 30 September 2026 2025 2026 2025 (Reviewed) (Reviewed) (Reviewed) (Reviewed) QAR’000 QAR’000 QAR’000 QAR’000 Net profit for the period before attribution to quasi-equity 2,598,874 2,626,062 7,307,840 7,416,028 Less: Income not attributable to quasi-equity (1,008,851) (988,062) (3,041,017) (2,908,388) Add: Expenses not attributable to quasi-equity 152,014 134,328 596,211 487,230 Net profit attributable to quasi-equity holders before Bank’s Mudaraba income 1,742,037 1,772,328 4,863,034 4,994,870 Less: Mudarib’s share (1,606,516) (1,632,776) (4,474,290) (4,592,747) Add: Support provided by the Bank 991,171 1,041,962 2,930,770 3,136,102 NET PROFIT ATTRIBUTABLE TO QUASI-EQUITY HOLDERS 1,126,692 1,181,514 3,319,514 3,538,225 OTHER COMPREHENSIVE INCOME Items that may be subsequently classified to consolidated statement of income Share in the reserve attributable to quasi-equity 19,620 12,998 28,629 37,373 TOTAL OTHER COMPREHENSIVE INCOME 19,620 12,998 28,629 37,373 TOTAL PROFIT ATTRIBUTABLE TO QUASI-EQUITY 1,146,312 1,194,512 3,348,143 3,575,598
Page 8
Qatar Islamic Bank (Q.P.S.C.) INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the nine-month period ended 30 September 2026 The attached notes 1 to 22 form part of these interim condensed consolidated financial statements. 6 Share capital Legal reserve Risk reserve General reserve Fair value reserve Foreign currency translation reserve Other reserves Retained earnings Total equity attributable to equity holders of the Bank Non- controlling interests Sukuk eligible as additional capital Total equity ---------------------------------------------------------------------------------- QAR’000 ------------------------------------------------------------------------- Balance at 1 January 2026 2,362,932 6,370,016 3,183,218 81,935 137,424 (671,584) 216,820 17,943,777 29,624,538 123,910 4,000,000 33,748,448 Net profit for the period - - - - - - - 3,525,185 3,525,185 143 - 3,525,328 Other comprehensive loss - - - - (49,577) (10,002) - - (59,579) (7) - (59,586) Total comprehensive income / (loss) for the period - - - - (49,577) (10,002) 3,525,185 3,465,606 136 - 3,465,742 Cash dividend for the year 2025 (Note 15) - - - - - - - (1,181,466) (1,181,466) - - (1,181,466) Movement in non-controlling interests - - - - - - - - - 46 - 46 Loss on settlement of equity type investments - - - - - - - (16,223) (16,223) - - (16,223) Balance at 30 September 2026 (Reviewed) 2,362,932 6,370,016 3,183,218 81,935 87,847 (681,586) 216,820 20,271,273 31,892,455 124,092 4,000,000 36,016,547 Balance at 1 January 2025 2,362,932 6,370,016 3,102,283 81,935 (88,969) (661,941) 216,820 15,774,256 27,157,332 613,512 4,000,000 31,770,844 Net profit for the period - - - - - - - 3,455,078 3,455,078 (16,397) - 3,438,681 Other comprehensive income / (loss) - - - - 24,522 43,231 - - 67,753 (22,154) - 45,599 Total comprehensive income for the period - - - - 24,522 43,231 - 3,455,078 3,522,831 (38,551) - 3,484,280 Cash dividend for the year 2024 (Note 15) - - - - - - - (1,299,613) (1,299,613) - - (1,299,613) Interim dividend for the year 2025 (Note 15) - - - - - - - (945,173) (945,173) - - (945,173) Movement in non-controlling interests - - - - - - - - 4,676 - 4,676 Loss on settlement of equity type investments - - - - - - - (22) (22) 16 - (6) Balance at 30 September 2025 (Reviewed) 2,362,932 6,370,016 3,102,283 81,935 (64,447) (618,710) 216,820 16,984,526 28,435,355 579,653 4,000,000 33,015,008
Page 9
Qatar Islamic Bank (Q.P.S.C.) INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the nine-month period ended 30 September 2026 The attached notes 1 to 22 form part of these interim condensed consolidated financial statements. 7 For the nine-month period ended 30 September 2026 2025 (Reviewed) (Reviewed) QAR’000 QAR’000 Operating activities Net profit for the period after tax from continuing and discontinued operations 3,525,328 3,438,681 Tax expenses for continuing and discontinued operations 462,998 399,440 Net changes in operating assets and liabilities (12,959,362) (3,566,984) Net cash (used in) / from operating activities (8,971,036) 271,137 Investing activities Net changes in investment securities 885,577 (6,471,621) Net changes in fixed assets (53,765) (87,575) Dividends received from investment securities 6,199 13,858 Dividends received from associates 40,000 42,500 Net cash from / (used in) investing activities 878,011 (6,502,838) Financing activities Change in participatory investment accounts 1,184,749 8,656,408 Net movement from sukuk financing 2,553,190 18,000 Net movement in non-controlling interests 39 (17,462) Cash dividend paid to equity holders of the Bank (1,181,466) (1,299,613) Interim dividend for the period - (945,173) Net cash from financing activities 2,556,512 6,412,160 Net (decrease) / increase in cash and cash equivalents (5,536,513) 180,459 Cash and cash equivalents - beginning of the period 7,837,132 4,879,049 CASH AND CASH EQUIVALENTS - END OF THE PERIOD (NOTE 16) 2,300,619 5,059,508
Page 10
Qatar Islamic Bank (Q.P.S.C.) INTERIM CONSOLIDATED STATEMENT OF CHANGES IN OFF-BALANCE SHEET ASSETS UNDER MANAGEMENT For the nine-month period ended 30 September 2026 The attached notes 1 to 22 form part of these interim condensed consolidated financial statements. 8 Movements during the period Investment At 1 January 2026 Investments Revaluation Gross income Dividends paid Bank’s fee as an agent At 30 September 2026 (Reviewed) --------------------------------------------------------------------------------- QAR’000 ------------------------------------------------------------------------ Real Estate Portfolio 9,100 - - - - - 9,100 Equity Securities Portfolio 1,420 - - - - - 1,420 10,520 - - - - - 10,520 Movements during the period Investment At 1 January 2025 Investments Revaluation Gross income Dividends paid Bank’s fee as an agent At 30 September 2025 (Reviewed) ---------------------------------------------------------------------------------- QAR’000 ------------------------------------------------------------------------ Real Estate Portfolio 9,100 - - - - - 9,100 Equity Securities Portfolio 1,420 - - - - - 1,420 10,520 - - - - - 10,520
Page 11
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 9 1 REPORTING ENTITY Qatar Islamic Bank Q.P.S.C. (“QIB” or the “Bank”) is an entity domiciled in the State of Qatar and was incorporated on 8 July 1982 as a Qatari Public Shareholding Company under Emiri Decree no. 45 of 1982. The commercial registration number of the Bank is 8338. The address of the Bank’s registered office is at P.O. Box 559, Doha, State of Qatar. The interim condensed consolidated financial statements of the Bank for the nine-month period ended 30 September 2026 comprise the Bank and its subsidiaries (together referred to as the “Group”). The Group is primarily involved in corporate, retail and investment banking in accordance with Islamic Shari’ah rules as determined by Shari’ah supervisory board of the Bank and has 22 branches in Qatar and one branch in Sudan. The Parent Company of the Group is Qatar Islamic Bank (Q.P.S.C.). The Bank’s shares are listed for trading on the Qatar Exchange. The interim condensed consolidated financial statements include the financial statements of the Bank and the following principal subsidiaries: Effective percentage of ownership Country of Incorporation Principal business activity 30 September 2026 31 December 2025 Arab Finance House Lebanon Banking 99.99% 99.99% Aqar Real Estate Development and Investment Company W.L.L.(“Aqar”) (i) Qatar Investment in real estate 49% 49% Durat Al Doha Real Estate Investment and Development W.L.L. Qatar Investment in real estate 82.61% 82.61% QIB Sukuk Ltd (ii) Cayman Island Sukuk issuance 100% 100% QIB (UK) United Kingdom Investment banking 99.71% 99.71% QIB Solutions LLC Qatar Management of IT services and operations 100% 100% Notes: i) The Group has majority of the votes in the Board of Directors meetings of Aqar by virtue of representing the highest number of members in the Board. This gives the group the ability to direct the activities of Aqar. ii) QIB Sukuk Ltd was incorporated in the Cayman Islands as an exempted company with limited liability for the sole purpose of Sukuk issuance for the benefit of QIB. 1.1 Shari’ah governance framework The Group follows Accounting and Auditing Organi sation for Islamic Financial Institutions (“AAOIFI”) Governance Standards (GSs) in their entirety along with the regulators’ requirements related to Shari’ah governance / Shari’ah governance framework. In line with the requirements of the same, the Group has a comprehensive governance mechanism comprising of Shari’ah supervisory board, Shari’ah compliance function, internal Shari’ah audit, external Shari’ah audit, etc. These functi ons perform their responsibilities in line with AAOIFI GSs as well as the regulators’ requirements related to Shari’ah governance. The GSs also require the Board of Directors and those charged with governance to discharge their duties in line with Shari’ah governance and fiduciary responsibilities. 1.2 Shari’ah principles and rules The Group follows the hierarchy of Shari’ah principles and rules as defined in paragraph 165 of FAS 1 “General Presentation and Disclosures in the Financial Statements”.
Page 12
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 10 2 BASIS OF PREPARATION (a) Statement of compliance The interim condensed consolidated financial statements have been prepared in accordance with Financial Accounting Standards (“FAS 41 Interim Financial Reporting”) issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (“AAOIFI”) as modified by the Qatar Central Bank (“QCB”). In line with the requirements of AAOIFI, for matters that are not covered by FAS, the Group uses the guidance from the relevant IFRS accounting standards as issued by the International Accounting Standards Board (“IASB”). The interim condensed consolidated financial statements do not contain all information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Group's annual consolidated financial statements as a t 31 December 2025. In addition, results for the period ended 30 September 2026 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2026. (b) Estimates and judgements The preparation of the interim condensed consolidated financial statements in conformity with FAS issued by AAOIFI as modified by QCB, requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may dif fer from these estimates. In preparing the interim condensed consolidated financial information, significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial statements as at and for the year ended 31 December 2025. (c) Financial risk management The Group’s financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements for the year ended 31 December 2025. (d) Material accounting policy information The material accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2025. (e) New standards, amendments and interpretations issued that are effective for the current period Their adoption has not had any material impact on the disclosures or on the amounts reported in these interim condensed consolidated financial statements. • FAS 45 – Quasi-Equity (Including Investment Accounts) AAOIFI has issued FAS 45 in 2023. This standard prescribes the principles of financial reporting related to the participatory investment instruments (including investment accounts) in which an Islamic financial institution controls the underlying assets (m ostly, as a working partner), on behalf of the stakeholders other than the owners’ equity. Such instruments (including, in particular, the unrestricted investment accounts) normally qualify for on-balance-sheet accounting and are reported as quasi-equity. This standard also provides the overall criteria for on-balance-sheet accounting for participatory investment instruments and quasi -equity, as well as, pooling, recognition, de -recognition, measurement, presentation and disclosure for quasi -equity. It further addresses financial reporting related to other quasi-equity instruments and certain specific issues. This standard is effective for the financial reporting periods beginning on or after 1 January 2026. • FAS 46 – Off-Balance sheet Assets Under Management AAOIFI has issued FAS 46 in 2023. This standard prescribes the criteria for characterisation of off -balance sheet assets under management, and the related principles of financial reporting in line with the “AAOIFI Conceptual Framework for Financial Reporting”. The standard encompasses the aspects of recognition, de-recognition, measurement, selection and adoption of accounting policies, related to off-balance-sheet assets under management, as well as certain specific aspects of financial reporting such as impairment and onerous commitments by the institution. The standard also includes the presentation and disclosure requirements particularly aligning the same with the requirements of the revised FAS 1 “General Presentation and Disclosures in the Financial Statements” in respect of the statement of changes in off-balance sheet assets under management. This standard, along with, FAS 45 “Quasi-Equity (Including Investment Accounts)”, supersedes the earlier FAS 27 “Investment Accounts”. This standard is effective for the financial periods beginning on or after 1 January 2026 and shall be adopted at the same time of adoption of FAS 45 – Quasi-Equity (Including Investment Accounts).
Page 13
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 11 2 BASIS OF PREPARATION (CONTINUED) (e) New standards, amendments and interpretations issued that are effective for the current period (continued) • FAS 47 – Transfer of Assets Between Investment Pools AAOIFI has issued FAS 47 in 2023. This standard prescribes the financial reporting principles and disclosure requirements applicable to all transfers between investment pools related to (and where material, between significant categories of) owners’ equity, quasi -equity and off -balance sheet assets under management of an institution. It requires adoption and consistent application of accounting policies for such transfers in line with Shari’ah principles and rules and describes general disclosure requirements in this respect. This standard is for the financial periods beginning or after 1 January 2026 and supersedes the earlier FAS 21 “Disclosure on Transfer of Assets”. • FAS 48 – Promotional Gifts and Prizes AAOIFI has issued FAS 48 in 2024. This standard prescribes accounting and financial reporting principles for recognition, measurement, presentation and disclosures applicable to promotional gifts and prizes awarded by the Islamic financial institutions to their customers, including quasi -equity and other investment accountholders. This standard is effective on the financial statements for the annual financial reporting period beginning on or after 1 January 2026. • FAS 49 – Financial Reporting for Institutions Operating in Hyperinflationary Economies AAOIFI has issued FAS 49 in 2024. This standard outlines the principles governing financial reporting, including accounting treatments, presentation of financial statements and necessary disclosures for institutions applying AAOIFI Financial Accounting Standards (FAS), operating within hyperinflationary economies. This standard is developed taking into account the applicable Shari’ah principles and rules, as well as, the unique business models of such institutions while stipulating appropriate principles of financial reporting. The standard also prescribes a definition of a hyperinflationary economy and provides guidance on as to how to determine whether an economy qualifies as hyperinflationary. This standard is effective for the financial periods beginning on or after 1 January 2026. (f) New standards, amendments and interpretations issued but not yet effective • FAS 50 – Financial Reporting for Islamic Investment Institutions (Including Investment Funds) AAOIFI has issued FAS 50 in 2024. This standard outlines financial reporting principles applicable to the Islamic investment institutions (IIIs). In particular, it emphasises on bringing harmony and standardisation with regard to the form and contents of the financial statements of IIIs. This standard prescribe s the overall requirements for the presentation, minimum contents and recommended structure of their financial statements in a manner that facilities truthful and fair presentation in line with Shari’ah principles and rules. This standard shall be effective for financial periods beginning on or after 1 January 2027. • FAS 51 – Participatory Ventures AAOIFI has issued FAS 51 in 2025. This standard prescribes accounting and financial reporting principles for recognition, measurement, presentation and disclosures to apply in relation to participatory ventures (including most of the common structures / pr oducts based on Mudaraba and Musharaka ). This standard shall be applied in the respect of accounting and financial reporting by the investors(s), the working partner(s), as well as, the participatory ventures with regard to all such participatory ventures that fall within the scope of this sta ndard, including those with fixed and variable equity / quasi-equity shares. This standard shall be effective for financial periods beginning on or after 1 January 2027. • FAS 52 – Deferred Delivery Sales: Salam and Istisna AAOIFI has issued FAS 52 in 2025. This standard prescribes the accounting and financial reporting principles for recognition, measurement, presentation and disclosures related to deferred delivery sales transactions, applicable to the respective buyers and sellers. Such transactions include both, Salam and Istisna based deferred delivery sales transactions, but do not include Istisna based development contracts which are subject to standard being simultaneously issued. This standard shall be effective for financial periods beginning on or after 1 January 2027.
Page 14
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 12 2 BASIS OF PREPARATION (CONTINUED) (g) Key changes to the significant estimates and judgements Investment classification Assessment of the business model within which the investments are managed , and assessment of whether the contractual terms of the investment represents either a debt -type instrument or other investment instrument having reasonably determinable effective yield. (h) Adoption of QCB circular 12/2020 Measurement of equity-type instruments classified as fair value through other comprehensive income The Group may elect to present in statement of changes in equity changes in the fair value of certain investments in equity-type instruments that are not held for trading. The election is made on an instrument-by-instrument basis on initial recognition and is irrevocable. Gains and losses on such equity -type instruments are never subsequently reclassified to consolidated statement of income, including on disposal. However, cumulative gains and losses recognised in fair value reserve are transferred to retained earnings on disposal of an investment. Impairment losses (and reversal of impairment losses) are not reported separately from other changes in fair value. Dividends, when representing a return on such inve stments, continue to be recognised in consolidated statement of income, unless they clearly represent a recovery of part of the cost of the investment, in which case they are recognised in consolidated statement of changes in equity. 3 OPERATING SEGMENTS The Group has four reportable segments, as described below, which are the Group’s strategic divisions. The strategic divisions offer different products and services and are managed separately based on the Group ’s management and internal reporting structure. For each of the strategic divisions, the Group Chief Executive Officer reviews internal management reports on a monthly basis. The following summary describes the operations in each of the Group ’s reportable segments: Corporate banking – Corporate Banking includes services offered to institutional investors, corporate, other banks, and investment vehicles such as mutual funds or pensions. Personal banking – Personal banking includes services that are offered to individual customers through local branches of the Bank which includes checking and savings accounts, credit cards, personal lines of credit, mortgages, and so forth. Group function – treasury, investment, finance and other central functions. Local & international subsidiaries – Local and international subsidiaries include the Groups local and international subsidiaries all of which are consolidated in the Group financial statements. Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the Group Chief Executive Officer. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Information regarding the results, assets and liabilities of each reportable segment is included below:
Page 15
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 13 3 OPERATING SEGMENTS (CONTINUED) Information about operating segments 30 September 2026 (Reviewed) Corporate banking Personal banking Group function Local & international subsidiaries Unallocated Total QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 External revenue: Total income from financing and investing activities, net 5,462,311 1,918,495 (12,206) 290,590 - 7,659,190 Net fee and commission income 197,713 399,110 94,050 8,902 - 699,775 Net foreign exchange gain - - 75,952 5,295 - 81,247 Share of results of associates - - 71,885 2,565 - 74,450 Other income - - 2,681 2,371 - 5,052 Total income 5,660,024 2,317,605 232,362 309,723 - 8,519,714 - Net profit attributable to quasi-equity holders (1,778,711) (897,578) (481,681) (161,544) - (3,319,514) Inter segment (cost) revenue (2,395,402) 683,181 1,712,221 - - - Reportable segment net profit after tax 1,075,597 1,520,762 1,312,399 63,398 (446,828) 3,525,328 30 September 2025 (Reviewed) Corporate banking Personal banking Group function Local & international subsidiaries Unallocated Total QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 External revenue: Total income from financing and investing activities, net 5,680,530 1,853,068 (70,648) 290,112 - 7,753,062 Net fee and commission income 209,570 335,314 112,097 9,279 - 666,260 Net foreign exchange gain - - 33,595 10,763 - 44,358 Share of results of associates - - 61,983 3,213 - 65,196 Other income - - 9,791 2,407 - 12,198 Total income 5,890,100 2,188,382 146,818 315,774 - 8,541,074 Net profit attributable to quasi-equity holders (1,962,324) (1,059,217) (348,668) (168,016) - (3,538,225) Inter segment (cost) revenue (2,421,479) 795,465 1,626,014 - - - Reportable segment net profit after tax 1,072,412 1,416,713 1,306,961 26,495 (383,900) 3,438,681
Page 16
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 14 3 OPERATING SEGMENTS (CONTINUED) 30 September 2026 (Reviewed) Corporate banking Personal banking Group function Local & international subsidiaries Total QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 Reportable segment assets 150,561,500 33,695,543 46,619,090 4,610,243 235,486,376 Reportable segment liabilities and quasi-equity 76,298,777 60,831,661 58,018,781 4,320,610 199,469,829 31 December 2025 (Audited) Corporate banking Personal banking Group function Local & international subsidiaries Total QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 Reportable segment assets 134,378,455 31,385,505 50,508,502 4,778,316 221,050,778 Reportable segment liabilities and quasi-equity 74,324,395 60,581,616 47,506,456 4,889,863 187,302,330
Page 17
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 15 4 FAIR VALUE AND CLASSIFICATION OF FINANCIAL INSTRUMENTS The table below sets out the carrying amounts and fair values of the Group’s financial assets and financial liabilities: Fair value through other comprehens ive income Fair value through income statement Amortised cost Total carrying amount Fair value ----------------------------- QAR’000 ----------------------------- 30 September 2026 (Reviewed) Cash and balances with central banks - - 7,242,635 7,242,635 7,242,635 Due from banks - - 536,449 536,449 536,449 Investment securities - Equity type instruments 1,063,440 246,898 - 1,310,338 1,310,339 - Debt type instruments 1,266,628 2,177,570 55,011,449 58,455,647 58,368,540 Other assets - - 101,230 101,230 101,230 2,330,068 2,424,468 62,891,763 67,646,299 67,559,193 Due to banks - - 27,046,537 27,046,537 27,046,537 Customers’ current accounts - - 18,264,681 18,264,681 18,264,681 Sukuk financing - - 13,674,188 13,674,188 13,674,188 Other liabilities - - 13,792,533 13,792,533 13,792,533 Quasi-equity - - 126,691,890 126,691,890 126,691,890 - - 199,469,829 199,469,829 199,469,829 Fair value through other comprehens ive income Fair value through income statement Amortised cost Total carrying amount Fair value ----------------------------- QAR’000 ----------------------------- 31 December 2025 (Audited) Cash and balances with central banks - - 8,971,445 8,971,445 8,971,445 Due from banks - - 5,796,109 5,796,109 5,796,109 Investment securities - Equity type instruments 1,212,118 356,737 - 1,568,855 1,568,855 - Debt type instruments 1,502,396 1,279,769 55,897,993 58,680,158 58,703,026 Other assets - - 238,384 238,384 238,384 2,714,514 1,636,506 70,903,931 75,254,951 75,277,819 Due to banks - - 24,007,991 24,007,991 24,007,991 Customers’ current accounts - - 17,219,483 17,219,483 17,219,483 Sukuk financing - - 11,074,236 11,074,236 11,074,236 Other liabilities - - 9,493,479 9,493,479 9,493,479 Quasi-equity - - 125,507,141 125,507,141 125,507,141 - - 187,302,330 187,302,330 187,302,330
Page 18
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 16 4 FAIR VALUE AND CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED) The fair value of financial assets and liabilities carried at amortised cost are equal to the carrying value except for investment securities carried at amortised cost with a carrying value of QAR 3,728 million (31 December 2025: QAR 3,252 million) for which the fair value amounts to QAR 3,602 million (31 December 2025: QAR 3,240 million), which is derived using Level 1 fair value hierarchy. Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial investments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities; Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active , other valuation techniques where all significant inputs are directly or indirectly observable from market data. ; and Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuatio n. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments. Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments, the Group determines fair values using valuation techniques. Valuation techniques include net present value and discounted cash flow models, comparison to similar instruments for which market observable prices exist and other valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark profit rates, credit spreads and other premia used in estimating discount rates, sukuk and equity prices, foreign currency exchange rates, equity and equity index prices and expected price volatilities and correlations. The objective of valuatio n techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date that would have been determined by market participants acting at arm’s length. For financial instruments that are recognised at fair value o n a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re -assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. As at 30 September 2026 and 31 December 2025, the Group held the following financial instruments measured at fair value: Fair value measurement using 30 September 2026 (Reviewed) Total Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Shari’a compliant risk management instruments (assets) 139,282 - 139,282 - Investment securities Quoted equity-type classified as FVTIS 246,898 246,898 - - Quoted debt-type classified as FVTIS 1,197,220 1,197,220 - - Unquoted debt-type classified as FVTIS 980,350 - 980,350 - Quoted equity-type classified as FVTOCI 989,671 989,671 - - Unquoted equity-type classified as FVTOCI 73,769 - - 73,769 Quoted debt-type investments classified as FVTOCI 1,065,283 - 1,065,283 - Unquoted debt-type investments classified as FVTOCI 201,345 - 201,345 - Shari’a compliant risk management instruments (liabilities) 81,383 - 81,383 -
Page 19
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 17 4 FAIR VALUE AND CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED) Fair value hierarchy (continued) Fair value measurement using 31 December 2025 (Audited) Total Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Shari’a compliant risk management instruments (assets) 52,096 - 52,096 - Investment securities Quoted equity-type classified as FVTIS 356,737 356,737 - - Quoted debt-type classified as FVTIS 253,830 253,830 - - Unquoted debt-type classified as FVTIS 1,025,939 - 1,025,939 - Quoted equity-type classified as FVTOCI 1,138,117 1,138,117 - - Unquoted equity-type classified as FVTOCI 74,001 - - 74,001 Quoted debt-type investments classified as FVTOCI 1,105,519 - 1,105,519 - Unquoted debt-type investments classified as FVTOCI 396,877 - 396,877 - Shari’a compliant risk management instruments (liabilities) 357,542 - 357,542 - FVTIS – Fair value through income statement FVTOCI – Fair value through other comprehensive income Transfers within the fair value hierarchy During the period ended 30 September 2026 and year ended 31 December 2025, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements. The valuation technique in measuring the fair val ue financial instruments categorized as Level 3 was in line with 31 December 2025. The following table shows the reconciliation of the opening and closing amounts of Level 3 investments which are recorded at fair value: At 1 January 2026 Total gain recorded in interim consolidated statement of income / equity Purchases Sales / transfers At 30 September 2026 (Reviewed) ----------------------------- QAR’000 ----------------------------- Equity investments: at FVTOCI 74,001 - - (232) 73,769 74,001 - - (232) 73,769
Page 20
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 18 4 FAIR VALUE AND CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED) Transfers within the fair value hierarchy (continued) At 1 January 2025 Total gain recorded in interim consolidated statement of income / equity Purchases Sales/ transfers At 31 December 2025 (Audited) ----------------------------- QAR’000 ----------------------------- Equity investments: at FVTOCI 74,563 - - (562) 74,001 74,563 - - (562) 74,001 5 IMPAIRMENT Equity-type investments classified as fair value through other comprehensive income With effect from the issuance of QCB circular 12/2020, equity type instruments classified as fair value through other comprehensive income are not tested for impairment. However, prior to that, equity-type investments classified as fair value through other comprehensive income and measured at fair value, a significant or prolonged decline in the fair value of an investment below its cost is considered in determining whether the investments are impaired. If any such evidence exists for equity -type investments classified as fair value through other comprehensive income , the cumulative loss previously recognised in the interim consolidated statement of comprehensive income is transferred to the interim consolidated statement of income. Impairment losses recognised in the interim consolidated statement of income on equity -type investments are subsequently reversed through equity. Investment properties Investment properties held for rental or capital appreciation is measured at fair value with the resulting unrealised gains being taken through other comprehensive income to fair value reserve. Any unrealized losses resulting from re-measurement at fair value is adjusted against the fair value reserve to the extent of available balance. In case such losses exceed the available balance, the unrealized loss is recognized in the interim consolidated statement of income. In case there are unrealized losses relating to investment properties that have been recognized in the interim consolidated statement of income in a previous financial period, the unrealized gains related to the current financial period is recognized to the extent of crediting back such previous losses in the interim consolidated statement of income. Any excess of such gains over such prior-year losses is added to the fair value reserve. Financial assets carried at amortised cost (including investment in Sukuk instruments classified as amortised cost) For financial assets carried at amortised cost, impairment is recognised based on FAS 30 provided that such impairments are not less than QCB impairment requirements . Losses are recognised in interim consolidated statement of income and reflected in an allowance account. The Group has provided QAR 297.9 million ( 30 September 2025: QAR 312.1 million) as impairment on financing assets, other assets and other provisions in the interim consolidated statement of income.
Page 21
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 19 6 FINANCING ASSETS 30 September 2026 31 December 2025 30 September 2025 (Reviewed) (Audited) (Reviewed) QAR’000 QAR’000 QAR’000 Total financing assets 190,265,581 168,705,574 163,276,158 Less: Deferred profit (21,452,866) (22,464,057) (23,314,498) Expected credit losses on financing assets - performing (Stage 1 and 2) * (5,654,590) (5,463,498) (5,695,565) Allowance for impairment on financing assets – credit impaired (Stage 3) * (2,355,555) (2,228,268) (2,305,330) Suspended profit (76,556) (68,135) (65,350) Net financing assets 160,726,014 138,481,616 131,895,415 Note: The impaired financing assets net of deferred profit amounted to QAR 2,557 million as at 30 September 2026 representing 1.51% of the total financing assets net of deferred profit (31 December 2025: QAR 2,416 million, representing 1.65% of the total financing assets net of deferred profit). *For stage wise exposure and allowance for impairment refer to Note 20
Page 22
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 20 7 INVESTMENT SECURITIES 30 September 2026 (Reviewed) 31 December 2025 (Audited) 30 September 2025 (Reviewed) Quoted Unquoted Total Quoted Unquoted Total Quoted Unquoted Total QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 Classified as fair value through income statement • equity type 246,898 - 246,898 356,737 - 356,737 322,582 - 322,582 • debt-type – Fixed rate 1,197,220 980,350 2,177,570 253,830 1,025,939 1,279,769 251,121 1,062,930 1,314,051 1,444,118 980,350 2,424,468 610,567 1,025,939 1,636,506 573,703 1,062,930 1,636,633 Debt-type classified at amortised cost - State of Qatar Sukuk and QCB Murabaha 12,682,531 38,891,486 51,574,017 - 52,645,891 52,645,891 - 52,623,849 52,623,849 - Fixed rate 3,444,113 34,387 3,478,500 3,258,663 34,387 3,293,050 3,104,656 34,387 3,139,043 Less: allowance for impairment* (6,716) (34,352) (41,068) (6,596) (34,352) (40,948) (6,902) (34,352) (41,254) 16,119,928 38,891,521 55,011,449 3,252,067 52,645,926 55,897,993 3,097,754 52,623,884 55,721,638 Classified as fair value through other comprehensive income • equity type 989,671 73,769 1,063,440 1,138,117 74,001 1,212,118 1,034,658 111,717 1,146,375 • debt-type – Fixed rate 1,065,283 201,345 1,266,628 1,105,519 396,877 1,502,396 1,118,109 391,138 1,509,247 2,054,954 275,114 2,330,068 2,243,636 470,878 2,714,514 2,152,767 502,855 2,655,622 19,619,000 40,146,985 59,765,985 6,106,270 54,142,743 60,249,013 5,824,224 54,189,669 60,013,893 *For stage wise exposure and allowance for impairment refer to Note 20
Page 23
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 21 8 PARTICIPATORY INVESTMENT ACCOUNTS 30 September 2026 31 December 2025 30 September 2025 (Reviewed) (Audited) (Reviewed) QAR’000 QAR’000 QAR’000 Term accounts 99,162,876 101,636,741 93,998,791 Saving accounts 22,556,715 20,788,060 20,474,043 Call accounts 4,836,934 2,975,604 2,657,876 126,556,525 125,400,405 117,130,710 Share in reserve attributable to quasi-equity 135,365 106,736 91,336 Total 126,691,890 125,507,141 117,222,046 All participatory investment accounts are unrestricted as of 3 0 September 2026, 31 December 2025 and 30 September 2025. 9 LEGAL RESERVE In accordance with QCB Law No. 13 of 2012, 10% of net profit attributable to the owners of the Bank for the year is required to be transferred to the reserve until the legal reserve equals 100% of the paid -up share capital at a minimum. This reserve is not available for distribution except in circumstances specified in Qatar Commercial Companies Law No. 11 of 2015 (as amended by Law No. 8 of 2021) and after QCB approval. No appropriation was made in the current period as the legal reserve exceeds 100% of the paid-up share capital. 10 RISK RESERVE In accordance with QCB regulations, a risk reserve should be created to cover contingencies on both the public and private sector financing assets, with a minimum requirement of 2.5% of the total private sector exposure granted by the Group inside and outside Qatar after the exclusion of the specific provisions and profit in suspense. The finance provided to / or secured by the Ministry of Finance – Qatar or finance against cash guarantees is excluded from the gross direct finance. No transfer to risk reserve has been made during the period as the required amount will be transferred at year end (31 December 2025: QAR 80.9 million was transferred to risk reserve). 11 GENERAL RESERVE In accordance with the Articles of Association of the Bank, the General Assembly may transfer a portion of the net profits to the general reserve which could be based on the General Assembly Resolution as per recommendation from Board of Directors and after the approval from Qatar Central Bank.
Page 24
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 22 12 BASIC AND DILUTED EARNINGS PER SHARE Basic and diluted earnings per share is calculated by dividing the net profit attributable to equity holders of the Bank for the period by the weighted average number of ordinary shares outstanding during the period. For the three-month period ended 30 September For the nine-month period ended 30 September 2026 2025 2026 2025 (Reviewed) (Reviewed) (Reviewed) (Reviewed) Profit for the period attributable to equity holders of the Bank (QAR’000) 1,299,865 1,279,920 3,525,185 3,455,078 Weighted average number of shares outstanding during the period (’000) 2,362,932 2,362,932 2,362,932 2,362,932 Basic and diluted earnings per share (QAR) 0.55 0.54 1.49 1.46 There were no potentially dilutive shares outstanding at any time during the period. Therefore, the diluted earnings per share are equal to the basic earnings per share and earning per share from continuing operations. 13 FOREIGN CURRENCY TRANSLATION RESERVE The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations as well as from the translation of liabilities and gains and losses on risk management instruments that hedge the Group’s net investment in foreign operations and gains and losses on revaluation of foreign currency non -monetary assets carried at fair value for which gain or loss is recognized in foreign currency translation reserve in interim consolidated statement of changes in equity. 14 SUKUK ELIGIBLE AS ADDITIONAL CAPITAL During 2015, the Group issued perpetual Sukuk eligible as additional tier 1 capital for an amount of QAR 2 billion. The Sukuk is unsecured and the profit distributions are discretionary, non -cumulative and payable annually at an agreed expected profit based on applicable relevant six year reset rate + margin to be reset every sixth year. During 2021 the first reset period lapsed and a new profit rate has been reset for the coming six years. The Group has the right not to pay profit and the Sukuk holders hav e no right to claim profit on the Sukuk. The Sukuk does not have a maturity date and have been classified as equity. During September 2016, the Group raised additional tier 1 capital by issuing a perpetual Sukuk for an amount of Q AR 2 billion at an agreed expected profit rate based on applicable relevant six year reset rate + margin to be reset every sixth year. By end of December 2022 , the first reset period lapsed and a new profit rate has been reset with effect from 1 January 2023 for the coming six years. 15 DIVIDENDS The equity holders of the Bank approved additional cash dividend of 50% of the paid-up share capital (QAR 0.5 0 per share) amounting to QAR 1,181.5 million for the year ended 31 December 2025 in the general assembly meeting held on 09 March 2026, thereby taking the total cash dividend for the year ended 31 December 2025 to 90% of the paid up share capital amounting to QAR 2,126.6 million – QAR 0.90 per share ( 2024: 80% of the paid up share capital amounting to QAR 1,890.3 million – QAR 0.80 per share). During the year 2025, t he Board of Directors approved and paid an interim cash dividend in respect of the six - month period ended 30 June 2025 of QAR 0.40 per share, amounting to QAR 945.2 million.
Page 25
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 23 16 CASH AND CASH EQUIVALENTS For the purpose of the interim condensed consolidated statement of cash flows, cash and cash equivalents comprise the following balances with original maturities of less than nine months: 30 September 2026 31 December 2025 30 September 2025 (Reviewed) (Audited) (Reviewed) QAR’000 QAR’000 QAR’000 Cash and balances with central banks (excluding restricted QCB and other central banks reserve account) 1,893,980 2,234,420 1,979,449 Due from banks 406,639 5,602,712 2,529,591 Cash and bank balances, and due from banks attributable to discontinued operations - - 550,468 Total 2,300,619 7,837,132 5,059,508 17 CONTINGENT LIABILITIES AND COMMITMENTS 30 September 2026 31 December 2025 30 September 2025 (Reviewed) (Audited) (Reviewed) QAR’000 QAR’000 QAR’000 a) Contingent liabilities Unutilised financing facilities 11,926,367 9,384,918 9,304,556 Guarantees 9,004,928 8,924,209 10,267,547 Letters of credit 1,519,613 2,255,115 868,204 22,450,908 20,564,242 20,440,307 18 RELATED PARTY TRANSACTIONS Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties include the significant equity holders and entities over which the Group and the equity holders’ exercise significant influence, directors and executive management of the Group. The related party transactions and balances included in these interim condensed consolidated financial statements are as follows: 30 September 2026 (Reviewed) 31 December 2025 (Audited) Associate companies Board of Directors Associate companies Board of Directors QAR’000 QAR’000 QAR’000 QAR’000 Assets: Financing assets 2,410,120 8,705,866 2,582,804 20,750,036 Liabilities: Customers’ current accounts 662 110,373 789 229,203 Quasi Equity: Participatory investment accounts 202,103 279,466 393,683 747,094 Off balance sheet items: Contingent liabilities and commitments - 77,178 254 58,943
Page 26
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 24 18 RELATED PARTY TRANSACTIONS (CONTINUED) 30 September 2026 (Reviewed) 30 September 2025 (Reviewed) Associate companies Board of Directors Associate companies Board of Directors QAR’000 QAR’000 QAR’000 QAR’000 Interim consolidated statement of income items: Income from financing activities 101,997 360,826 128,262 1,087,782 Net profit attributable to quasi-equity holders 6,015 5,737 5,352 35,574 Net fee and commission income 1,559 3,336 15 33,588 Key management personnel compensation for the period comprised: 30 September 2026 30 September 2025 (Reviewed) (Reviewed) QAR’000 QAR’000 Key management remuneration 74,627 75,084 19 CAPITAL ADEQUACY RATIO The Group has calculated the capital adequacy ratios in accordance with the Basel III guidelines issued by Qatar Central Bank. The Group’s minimum QCB regulatory limit, including the Capital Conservation Buffer , ICAAP pillar II capital charge and the applicable Domestically Systemically Important Bank (“DSIB”) Buffer is 14.84%. The table below summarises the composition of prevailing regulatory capital and the ratios of the Group. The Group complied with the externally imposed capital requirements to which they are subject to: 30 September 31 December 30 September 2026 2025 2025 QAR’000 QAR’000 QAR’000 (Reviewed) (Audited) (Reviewed) Common Equity Tier 1 (CET 1) Capital 31,991,549 28,448,198 28,536,485 Tier 1 capital 35,991,549 32,448,198 32,591,361 Tier 2 capital 1,794,860 1,715,759 1,797,142 Total regulatory capital 37,786,409 34,163,957 34,388,503 Risk weighted assets 159,920,169 153,934,618 154,703,423 Common equity tier 1 (CET 1) capital adequacy ratio 20.0% 18.5% 18.5% QCB minimum 8.50% 8.50% 8.50% Total capital adequacy ratio 23.6% 22.2% 22.2% QCB minimum including conservation buffer, DSIB and ICAAP pillar II capital charge 14.84% 14.84% 15.03%
Page 27
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 25 20 FINANCIAL RISK MANAGEMENT Exposure and movement of expected credit loss / impairment allowances 30 September 2026 30 September 2025 Stage 1 Stage 2 Stage 3 Total Total -------------------------------------- QAR’000 ------------------------------------- Exposures subject to expected credit losses Due from central banks 6,054,241 - 680,147 6,734,388 7,827,935 Due from banks 532,638 3,911 19,597 556,146 2,575,379 Debt type investments carried at amortised cost 55,010,888 - 41,629 55,052,517 55,762,892 Financing assets (net of deferred profit) 147,152,591 19,102,647 2,557,477 168,812,715 139,961,660 Off balance sheet exposures subject to credit risk 21,118,826 1,192,287 139,795 22,450,908 20,440,307 229,869,184 20,298,845 3,438,645 253,606,674 226,568,173 Opening balance of expected credit losses / impairment losses as at 1 January Due from central banks - - 258,082 258,082 248,007 Due from banks 101 - 19,597 19,698 19,795 Debt type investments carried at amortised cost 455 - 40,493 40,948 41,436 Financing assets (including suspended profit) 3,809,086 1,654,412 2,296,403 7,759,901 7,748,754 Off balance sheet exposures subject to credit risk 3,889 2,653 82,825 89,367 112,187 3,813,531 1,657,065 2,697,400 8,167,996 8,170,179 Net transfer between stages Due from central banks - - - - - Due from banks - - - - - Debt type investments carried at amortised cost - - - - - Financing assets (8,969) 11,310 18,579 20,920 - Off balance sheet exposures subject to credit risk - - - - - (8,969) 11,310 18,579 20,920 - Write off / foreign currency and other adjustments for the period Due from central banks - - - - - Due from banks - - - - - Debt type investments carried at amortised cost - - - - - Financing assets (130) (129) (133) (392) 620 Off balance sheet exposures subject to credit risk - - - - - (130) (129) (133) (392) 620 Charge / (reversal) for the period (net) Due from central banks - - 63,215 63,215 7,951 Due from banks (1) - - (1) (33) Debt type investments carried at amortised cost 119 - 1 120 (182) Financing assets* 134,358 54,652 117,262 306,272 316,871 Off balance sheet exposures subject to credit risk 1,133 (1,161) (14) (42) (24,497) 135,609 53,491 180,464 369,564 300,110 Closing balance of expected credit losses / impairment losses - as at 30 September (Reviewed) Due from central banks - - 321,297 321,297 255,958 Due from banks 100 - 19,597 19,697 19,762 Debt type investments carried at amortised cost 574 - 40,494 41,068 41,254 Financing assets (including suspended profit) 3,934,345 1,720,245 2,432,111 8,086,701 8,066,245 Off balance sheet exposures subject to credit risk 5,022 1,492 82,811 89,325 87,690 3,940,041 1,721,737 2,896,310 8,558,088 8,470,909 *Includes profit in suspense of QAR 8,421 thousand (30 September 2025: QAR 4,804 thousand)
Page 28
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 26 20 FINANCIAL RISK MANAGEMENT (CONTINUED) Credit quality assessments The table below provides an analysis of counterparties by rating grades and credit quality of the Group’s credit risk, based on third party rating agency’s rating scale (or their equivalent) as at 30 September 2026. Rating grade Due from central banks Due from banks Debt type investments carried at amortised cost Financing assets Off balance sheet exposures subject to credit risk Total QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 QAR’000 AAA to AA- 5,989,857 89,010 52,339,675 24,230,207 2,005,226 84,653,975 A+ to A- - 360,299 1,690,783 6,561,018 1,419,441 10,031,541 BBB to BBB- - 3,277 198,261 107,076,114 15,673,335 122,950,987 BB+ to B- - 7,742 636,449 21,282,239 3,196,924 25,123,354 Unrated 744,531 95,818 187,349 9,663,137 155,982 10,846,817 Total 6,734,388 556,146 55,052,517 168,812,715 22,450,908 253,606,674 The geopolitical developments in the Middle East have intensified since 28 February 2026 and continue to evolve. These developments have introduced additional uncertainty in the regional economic environment and may have implications for certain sectors in which the Bank operates. The Bank is closely monitoring the situation and is undertaking ongoing assessments to evaluate potential implications on its operations, financial position, and credit risk exposures, including financing assets. This includes consideration of sectors that may be more susceptible to adverse economic conditions and the potential impact of changes in macroeconomic factors. Given the evolving nature of the situation, the extent and duration of any potential impact remain uncertain. The Bank will continue to monitor developments closely and will reflect any relevant implications in future financial reporting periods in accordance with applicable AAOIFI standards and regulatory requirements. 21 ASSET AND LIABILITIES HELD FOR SALE On 31 December 2024, the Group’s Board of Directors approved a plan to partially dispose of its investment in QInvest LLC, a partially owned subsidiary authorised by QFCRA to conduct various banking activities. Accordingly, QInvest LLC was classified as a disposal group held for sale. Following the completion of partial sale of Qinvest LLC in 2025 and the Group’s loss of control over QInvest LLC, it was classified as an Associate. 22 TAXATION On 27 March 2025, the State of Qatar published amendments to the Income Tax Law No. (24) of 2018 in the Official Gazette under Law Number 11 of 2022 introduce enabling provisions for Pillar Two taxes. These amendments introduce an Income Inclusion Rule (II R) and a Domestic Minimum Top -up Tax (DMTT) applicable to multinational groups, in accordance with the Base Erosion and Profit Shifting (BEPS) Pillar Two Anti-Global Base Erosion (GloBE) framework. The GloBE rules took effect for accounting periods beginning on or after 1 January 2025. These rules incorporate various mechanisms designed to ensure that qualifying multinational enterprises maintain a minimum effective tax rate of 15%, calculated on excess profits in each jurisdiction where the group operates. Following the publication of the amendments to the Income Tax Law, the Council of Ministers issued on 12 February 2026 the Pillar Two Executive Regulations (the "Regulations") setting out the detailed mechanics of the GloBE framework, including the computation of GloBE income, covered taxes, the Substance -Based Income Exclusion, and the applicable transitional rules and safe harbours . The Regulations are effective for fiscal years beginning on or after 1 January 2025. Further administrative guidance concerning certain compliance processes, elections and filing deadlines may continue to be issued by the relevant authorities in due cour se.
Page 29
Qatar Islamic Bank (Q.P.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the period ended 30 September 2026 27 22 TAXATION (CONTINUED) Based on the impact assessment performed by the Group under the enacted Regulations, the Group has considered the availability of safe harbours, transitional reliefs and other exclusions provided for under the Regulations. Whilst certain reliefs may be applicable, the conditions for their application are subject to ongoing assessment and, in some cases, pending further administrative guidance. Accordingly, the Group has recognised a current tax liability under the GloBE rules of QAR 446.8 million for the nine months ended 30 September 2026 (nine months ended 30 September 2025: QAR 383.9 million), representing management's best estimate of the Pillar Two top-up tax charge for the period based on information available at t he reporting date. This liability arises principally under the Domestic Minimum Top-up Tax (DMTT) in respect of the Group's Qatar operations. The Group has applied the mandatory exception to recognising and disclosing information about deferred tax assets and liabilities arising from Pillar Two income taxes.