Lower Finance Costs Offset Higher Impairments, Supporting QIIB’s Profit Growth in Q3 2025
• The company's net income from financing activities remained stable year over year, while net income from investing activities dropped by 25% year over year
• Qatar International Islamic Bank shares remained stable during the first nine months of 2025.
• Net profit was pushed up by a remarkable reduction in financing costs and investment accounts.
Qatar International Islamic Bank’s stock price remained broadly stable throughout the first nine months of 2025. The share opened the year at QAR 10.90 and closed the third quarter at QAR 10.85, reflecting only a marginal decline over the period.
Here are the key numbers:
● Net income from financing activities: 1,971 million QAR vs. 1,966 million QAR in the first nine months of 2024 (minor YoY change).
● Net income from investment activities: 512 million QAR vs. 682 million QAR in the first nine months of 2024 (a 25% YoY decline).
● Net Profit: 1,098 million QAR vs. 1,040 million QAR in the first nine months of 2024 (a 5% YoY increase).
● Earnings per Share: 0.680 QAR/share vs. 0.640 QAR/share in the first nine months of 2024 (a 6% YoY increase).
During the first nine months of 2025, there was a notable improvement in the ratio between operating income and return to unrestricted investment account holders, jumping from 2.32 to 2.71. This increase was primarily influenced by the prevailing general global macroeconomic conditions, which led to a drop in borrowing costs.
A closer look at the income statement reveals that income from financing activities remained broadly stable compared to the same period last year. However, income from investment activities declined sharply, exerting a negative impact of QAR 170 million on net profit. This was partly offset by a reduction in investment accounts and finance expenses, which together provided a positive contribution of QAR 162 million and QAR 147 million, respectively, helping to cushion the overall impact on profitability.
Islamic banks, despite their distinct operational principles from conventional commercial and investment banks, have confronted similar challenges in the global macroeconomic environment. These challenges have resulted in an increase in credit risk for Islamic banks as well. The company's management responded proactively to this situation by making a noteworthy decision to implement an increase in impairments, resulting in an adverse impact on the net profit of 86 million QAR. This strategic move likely helped mitigate potential risks and ensure the bank's continued stability and resilience in the face of uncertain economic conditions.
Despite the challenges posed by the global macroeconomic environment, the company possesses several key strengths that will aid in navigating these difficulties. A robust balance sheet, strong capitalization, and effective portfolio management are assets that will enable the company to tackle these challenges with greater ease. Furthermore, the company's reputable standing and prudent actions in investing and risk management will contribute to its potential for further growth and resilience. By upholding its reputation, the company can instill confidence in investors, encouraging them to maintain their investments at favorable rates, thereby solidifying the company's position in the market and fostering its continued success.
For more comprehensive information, please refer to the reliable financial information source, http://sahmik.com.