Good afternoon, everyone. This is Elena Sanchez from EFG Hermes, and I would like to welcome you all to Doha Bank's Q3 2026 earnings call.

It is a pleasure to have with us in the call Sheikh Abdulrahman, Group Chief Executive Officer; Aman Ullah Khan, Chief Financial Officer; Faisal Masood, Acting Chief Risk Officer; and Hesham Kalla, Head of Investor Relations. I would like to hand over the call now to Sheikh Abdulrahman.

Please go ahead.

Yes, hi, salam alaykum. This is Abdulrahman Thani from Doha Bank.

Today I'm talking about in general the situation in the market, and the team will handle all the numbers and they will go through the details. The situation here in the market or in the bank itself, we can see this war is continue in this region.

There is challenge, but yes, the team handle it in the right way. Liquidity is much better comparing with the last quarter, and we're working also to issue couple of bonds, EMTN, for the next couple of days, which also will allow the bank to be in better position.

Overall, the business in the bank doing very well, especially continue that with the public sector. We're doing great job, I think, there.

Couple of partner this period we did with the Tennis Federation, which we announced it previously. Wealth management doing very well also.

The AUM number has been bigger now for the bank. We start to collaborate with fund managers like KKR we announced it also last month in our Bloomberg event in US, New York, our visit.

Our transformation and other stuff continue. We're continue also on the digital part, which is core banking.

Today, we finalized this project, and this will take time of 2 years, which is also something great for the bank. We did many changes last quarter, the rebranding.

Numbers has been develop, I think, maybe each quarter we will show that our performance is getting better, and I think the team can continue saying, especially from Treasury and CFO will be explaining more going more on the details numbers.

Thank you, Sheikh, and good afternoon, everyone. I will take you through the financial performance for the first nine months of 2026.

Starting with the balance sheet, the total assets grew by around 4.3% year-to-date and 5% year-on-year. The bank witnessed net loan growth of around 8.5% year-to-date and 16.1% year-on-year.

The strong loan growth came from the public sector and high-rated corporate clients and was offset with a drop in the investment portfolio for around 14.6% year-to-date, though it remained robust. Loan growth guidance for 2026 is being revised to 5% to 6%, as we continue being cautious as we deal with the legacy assets and possibly negotiating favorable terms for the bank and are attempting to exit the relationships in the second half of 2026.

Customer deposits were lower 2.1% year-on-year and around 9.5% lower year-to-date. The strategy here was to reduce the higher-cost deposits with shorter duration and more affordable borrowings.

The LDR is in breach, but we are working to make it meet the regulatory maximum. The capital ratios remained stable as the bank's CET1 and total CAR both sit at 12.79% and 18.67%, respectively.

Given the expected asset growth and assuming the current equity structure remains the same, the guidance for 2026 is revised for total CAR to be around 17.5% to 18%. Moving on to the income statement, for the first nine months, the bank achieved a net profit of 681 million Qatari riyal, which is down by 8.7% year-on-year.

However, the profit prior to tax was up 2.0% year-on-year. The guidance for ROE remained the same to land at around 6.2% to 6.5% after tax.

Net interest income was lower by 1.7% year-on-year, and quarter-on-quarter by 4.5%. However, quarter to quarter, from Q2 '26 to Q2 Q3 of 2026, the net interest income increased by 2.3%.

The non-recurring income was stronger for the first nine months of the year, up 25.5%. NIM at the end of the period, Q3 2026, was around 1.67%, same as of Q2, remained stable from quarter two to quarter three.

We are keeping the NIM guidance at 175 bps, plus/minus 10 basis points. We are not anticipating another rate cut this year, but with a possible 25 basis point rate hike, the interest rate sensitivity is around additional 55 million Qatari riyal.

Operating income grew by around 4.8% year-on-year and 1.2% quarter-on-quarter. The bank's cost-to-income ratio slightly increased to 39.83% from Q2, but lower as compared to year-end ratio of 40.33%.

We're maintaining the guidance for cost-to-income ratio to be between 39% to 40%. The net impairment on loans for the year was around 537 million versus 557 million for the same period last year.

Cost of risk for Q3 was around 101 basis points versus 120 basis points for the same period last year. We're maintaining the cost of risk guidance between 110 to 125 basis points for the end of 2026.

NPLs have reduced slightly from 6.75% from Q3 2025 to 6.37% in Q3 2026, as we had loan growth and there were some write-offs and recoveries. The bank's guidance for 2026 for NPLs is being revised to 6.45% to 6.6%.

Specific provision coverage stood around 78.03%, as compared to 76.44% at the year-end 2025. Guidance for coverage for the end of year 2026 is to be around 80% at year-end.

We now open the floor to questions and answers. I'll hand it over back to you, Elena.

Thank you very much for the presentation. We'll move now to the Q&A.

If you have a question, you can write it in the chat or you can also click on the raise hand button and I will unmute your microphone. We have the first question from Chiro Ghosh.

Please go ahead.

Hi, this is Chiro Ghosh from SICO Bahrain. The first question is, of course, related to the overall funding cost and want to get a better idea of the ground reality.

First thing which I understood is that you're letting go of expensive deposits and hopefully looking to replenish it back. At the moment, it is by short-term borrowing and mainly the longer-term plan might be to get the deposits to again replace this short-term borrowing.

How is the market? How competitive is the whole deposit landscape?

Can we expect you to witness more funding cost pressure going ahead? Some clarity on that would be highly appreciated, especially considering that the lending book has not totally been funded by the deposit side of it.

That's my first question. Second is on the asset quality side.

There has been a marginal deterioration in asset quality, nothing severe, but again, if you can shed some light on the ground reality, because the cost of risk guidance still appeared to remain high. How should we see the fourth quarter?

More importantly, how is that ground reality? These are my two broad questions.

Thank you, Chiro. I believe for the funding ground reality, we have our treasurer, Ayman, on the call.

He can brief you on it. Ayman,

please. Hi, good afternoon.

Look, clearly this isn't the usual funding and liquidity environment that we are all used and accustomed to, and this is not a Doha Bank-specific issue. This is something that we see across the board, not only in the country, but across the region.

Clearly, the liquidity and the funding situation remains very resilient. There is definitely liquidity out there.

It comes at a price, and it's a wide universe of available funding and liquidity avenues that we are able to tap into, and they all come at a different and a varying levels from a cost perspective. Our job and our aim is to make sure that we maintain a very good mix between funding and liquidity instruments that allow us to continue to do our business and to continue to be cost-conscious from a cost of fund perspective, but at the same time, to be able to manage the funding and liquidity risks of the bank in an appropriate manner.

The second question—

Sorry, it appears that the duration of the liability side has gone down while the duration of the asset have gone up. Are you witnessing a increasing gap, or?

Not necessarily. I think a big part of that is transitional in nature, because as you would imagine, the events have unfolded overnight and it takes a little bit of time to adjust.

We have seen definitely improvements in the liquidity metrices between Q2 and Q3. I think, first half we saw a little bit of deterioration which now has been corrected.

A lot of the situation is transitionary in nature, and we will continue to see that improvement in terms of the different tenor buckets from a liability's perspective to lower and shorten the gap. If I have to sum it up very quickly, that drop in the liability tenors is transitionary in nature, and you would see a big part of it reversing as we go.

Okay.

With regards to your second question on asset quality, can you please rephrase the question?

Ground reality.

Yeah.

See, obviously, given the prolonged geopolitical situation and the war scenario going on, obviously we are very focused on our asset quality, and our asset origination has been through very disciplined underwriting and selective origination. We cautiously have grown into the government sector, right, and in terms of our credit standards, we are very, very prudent in terms of selecting the assets for our risk returns, concentration, and capital consumption criteria.

Obviously, few sectors have been impacted, but we are very, very cautious and closely monitor the situation to ensure that our asset growth remains in line with our objectives and our strategy.

If the interest rate go up further, let's assume, say, 25 or 50 basis point more, would that have any adverse impact on your—

No, I don't think so, because this is the normal BAU kind of thing, right? As a prudent measure, the management has given this guidance, right, to ensure that the deterioration which is going to happen naturally, we are aware of it, and we remain prepared for that.

Thanks again. That was very clear.

Thanks.

Thank you.

Thank you very much. As a reminder, if you have a question, you can write it in the chat or you can click on the raise hand button.

Perhaps before we receive some questions from the audience, a couple of questions on my side. On loan growth, I think, if I'm not mistaken, you are expecting around 6% growth in full year 2026, compared to year-to-date loan growth of about 8%, 9%.

Are you expecting repayments to take place in Q4 from government or other sectors?

Elena, Aman here. Yes, this is exactly what I mentioned earlier.

Our initial loan growth guidance that we were giving since the start of the year was around 5%, but now we have revised to between 5% to 6%, and we probably would be landing at the higher end. You're absolutely right, as year-to-date we already had 8.5% growth, there are some repayments which are expected, usual repayments which are expected, I would say.

All right, thank you. Secondly, on the loan-to-deposit ratio that increased temporarily in Q3, do you have a target for that ratio, or is there a regulatory target for that ratio by the end of the year?

Will you have to step up deposit growth or increase deposits in Q4, with a potential negative impact on NIMs and funding costs?

Elena, see, the regulatory target is very clear: it's 100% maximum. We are more than that, we're close to 112%, 113% as at the end of Q3.

The target is basically, of course, to maintain or bring more longer-term funding, because this ratio, the denominator basically takes into account the funding side, which is primarily, as I was explaining earlier, is concentrated towards short term, as Ayman explained, because of the geopolitical situation around. We were supposed to have some bond issuances during the year that basically gives us the reduction in the ratio through higher denominator did not happen, as well as there were some attritions in the deposit portfolio, again, owing to the situation around.

We are working on multiple initiatives to make sure to reduce the ratio and try to bring it as close to the regulatory maximum before the end of the year.

All right, thank you very much, very helpful. We'll take the next question from Bhavin Kumar.

Please go ahead. Bhavin, you can unmute your microphone.

Hello, am I audible?

Yes, you are. Please go ahead.

Thank you so much. Thank you for taking my questions.

This is Bhavin Rathod from HSBC. I had three questions on my side.

The first one would be on the net interest margin guidance for full year, the midpoint of 1.75% still above the 3Q or the third-quarter levels. Just wanted to understand, where exactly should we expect some sort of uptick in the fourth quarter versus the 3Q levels?

Is it largely driven by the asset yield or contraction of cost of deposit? That's the first one.

The second one is on your investment securities breakup. The large part of your investment securities is categorized as fair value through other comprehensive income.

How should we think about the volatility in the fair value reserves in your shareholders' equity, given the increase in the yields, which could potentially have a negative impact on your fair value through OCI securities? The third one is on your NPL guidance for full year, standing at 6.45% to 6.6% for full year '26, still a bit higher than the level which was reported at third quarter of 2026.

Just wanted to understand, why should we expect the incremental NPLs coming in the fourth quarter? Is it largely a denominator effect or should we expect some more NPL emerging from any particular exposed sectors?

Thank you.

Aman here. I'll take the first two questions on NIMs and investment securities.

I think the third question can be answered by our CRO. The NIM guidance, as you highlighted, we are still keeping at 1.75%, plus/minus 10 basis points.

We are expecting to land somewhere in the middle, and the reason we are expecting slightly higher NIM from now till the end of the year is primarily on account of the asset yield, because there was a rate hike that happened in the latter part of Q3 that will basically be materialized of course for the full quarter, quarter four of 2026, plus we're expecting one in mid-December, so that may push asset yields a bit high, and concurrently a little bit higher NIMs. Secondly, on the investment securities, yeah, the fair value reserve, you would have seen impact in our equity, it's close to -700 million negative during the current year because of the mark-to-market of the bond portfolio.

It did have an impact on our capital adequacy as well. The rate cycle and the rate changes would definitely have an impact on that reserve, and we are already taking it into consideration as part of our forecasts.

For the NPL guidance, I think Faisal, our CRO, can shed some light.

Yes, thank you for your question. The slight increase in the NPL ratio during Q3, what I would say, that is primarily due to the existing stressed exposures rather than a broad-based portfolio deterioration.

For Q4, what we have adopted is a prudent and forward-looking approach in light of the prolonged geopolitical uncertainty, which is continuing. Therefore, this change should not be taken as a deterioration in our portfolio, rather than a precautionary measure and a risk management measure to be prepared for any unforeseen event just happening.

Also, this also reflects our successful de-risking efforts where we have focused on our portfolio management, and we also continue to manage our stressed exposures to be in line with the guidance which we provided.

Very helpful. Thank you so much.

Thank you.

Thank you very much. We'll take the next question from Fatima Al-Hashemi.

Please go ahead. Fatima, can you please unmute your microphone?

Audible? Yes, please go ahead.

Thank you for taking my questions. I have three questions from my end.

First, on the operating expenses, they were relatively elevated this quarter, with cost discipline yet to fully materialize. How should we model opex going forward, and where do you expect to reach on your cost-to-income ratio?

Secondly, would you give us some clarity on the Sharia-compliant license application? Lastly, on the reliance on the international deposits or the international liabilities?

That's it from my end.

Thank you, Fatima. For the operating expenses, although they're elevated, but still as per our guidance, we kept our guidance for the operating expenses to be 39% to 40% by the end of this year, and we also have given some long-term guidance that by the end of 2030 we are expecting this ratio to be close to 31%, 32%, which consequently means that every year we would want to have a reduction in this ratio by 1% to 2%.

We have many initiatives underway from the human capital as well as other aspects that are already into action right now, which will have an effect on the ratio as we speak next year and onwards as we expect 100 to 150 basis point reduction every year. This is the expectation.

Secondly, on the Sharia-compliant license, there has been no update. Our CEO has given multiple updates during the course of past couple of years about there certainly was an intention, but there hasn't been anything concrete that we can come and basically announce for the market.

If anything or any information is available, of course we're going to apprise the market of it. With respect to the international deposit, I'll let our Ayman maybe comment on it.

Look, I think in very simple terms, we're still within our regulatory limits within non-resident deposits. We have seen a bit of attrition from some of those, but we have seen some that remained sticky.

For those that have gone out, we have managed to replace the vast majority of them through multiple instruments. We have been active a little bit on the private placement side.

We did tap into our close relationship banks for bilateral and trade loans and the likes. While the entire stack didn't necessarily be entirely through the deposits, but we have managed to replace those from a liquidity and funding perspective.

Very clear. Thank you so much.

Thank you very much. I'll read the next question from the chat that we received from Nikhil.

I will read it as received: "Lower impairment helped this quarter. However, the sizable Stage 2 loan book is the highest amongst the local banks.

How will the bank manage that risk going forward given the current situation, and as no directive has come on deferred loans during Q4 '26?"

Thank you. I will take this question.

While the Stage 2 exposure remained highest, but there has been a reducing trend over the last year, as it has reduced to about 21.89%, compared to 27.7% last year. This will be mitigated through our selective onboarding into the government sector and also with the successful implementation of our de-risking strategy, where we are focusing on sectors which are not impacted.

Secondly, in terms of the next part of the question is that there is no directive, but like I said, with our prudent measures, we expect this ratio to continuously go down, in line with our performance.

Thank you very much. As a reminder, if you have any follow-up questions, you can write it on the chat or click on the raise hand button.

We'll take the next question from Lee Beswick. Please go ahead.

Hi, Lee, your microphone is on. Go ahead.

Can you hear me?

Yes, we can. Go ahead, please.

Brilliant. Sorry.

What is the bank's net stable funding ratio at the moment?

Lee, I can answer that. This is Aman.

I can assure you that it's not 100%, it's less than that. We continually disclose this ratio every 6 months as part of our public disclosures.

I believe we did last in June. It was somewhere under 100% as well during that, but it is part of our public disclosures.

If your question is compliance, it's not technically in compliance.

Is there a timetable that you think you'll get it into compliance by?

Yes, we are working on it. We're also coordinating very closely with the central bank internally.

The initial target was to have it somewhere in 2027 initially, before the situation got worsened, geopolitical. Now we are working on multiple measures to make sure that in a year's time the ratio should ideally be in check.

Okay. Sorry, just a second question.

You mentioned sorry, about 5 minutes ago, 10 minutes ago, that you were planning to, I think, raise debt in the market or raise long-term funding, but then you withdrew. Is that right?

Did I get that right?

Sorry, we planned something that we withdrew?

You said there was a long-term funding that you were planning to do earlier in the year, but then you had to withdraw it. Is that correct?

No, what Aman had mentioned is that as part of our funding plan, this dates back to January, when we were all operating in a different world, indeed we had plans to come to the capital markets, to the debt capital markets in particular. As you would know, we had a maturity earlier this year in March, which we have settled, and naturally we were looking to come to the markets with another issuance.

We continue to monitor the DCM space, and as and when we see an opportunity, we may or may not come to the market.

That gap is essentially going to be filled with You mentioned private placements earlier, but presumably deposit growth, is that correct?

It's across the board, like I mentioned earlier. There are multiple instruments available to us, which we have been utilizing for the past 6 months, and that cuts across private placements, deposits, both resident and non-resident, as well as relationship banks in terms of trade loans, bilats, and club transactions.

You don't expect that to put pressure on funding costs, then?

Like I said, it's a variety of instruments. Some of them, again, relationship-wise, we've been able to maintain the levels definitely under control, and there are others that are more expensive than some.

It's a mixture, but as you can see from our results, all in all, there hasn't been any material impact from a cost of fund perspective.

Thank you.

Pleasure.

Thank you very much. We have a new question on the chat from Rayan Derham: "Real estate is 28% of the loan book.

Is hospitality included in that, or is it reported somewhere else?"

I'll take that, Elena. Real estate, as you said, it is around 28%.

However, hospitality is excluded out of it. It is reported separately as part of our services sector, which is around 33%.

Thank you. How big is hospitality out of that 33%?

A major part is hospitality.

A major part of the services—

Correct, yes. Sector.

All right, thank you. All right, we have no additional questions at this time.

Sorry about that. We have a follow-up question from Lee.

Please go ahead.

Sorry, just on that hospitality bit, are you seeing any stress in hospitality at all?

See, obviously, given this geopolitical situation, obviously there is a stress in the overall sector. However, we have not seen any delays in the repayment.

Secondly, QCB also gave a compensation or a dispensation period for the affected sectors, which ended in September. We are yet to see any impact on the sector performance, but we are closely monitoring it, and as part of our stress testing, services sector is one of the major sectors which we closely review and monitor.

Thank you.

Thank you.

All right, thank you very much. We can now close the call, as we don't have any follow-up questions.

I would like to thank the management team for the presentation and the Q&A session, and I'll hand it over to Doha Bank's management for any closing remarks. Thank you.

Thank you, Elena and EFG, for hosting our call, and to all the market participants, if you have any follow-ups, please reach out to me anytime you'd like. We're here for you.

We look forward to speaking to you at the end of the year on the Q4 call where we will have the 2027 guidance ready. Enjoy the rest of the year.

Thank you.