Lower Impairments Drive Ahli Bank’s Q3 2025 Profit Growth Despite Weaker Interest Income

• The company's interest income dropped by 14% year over year, accompanied by a decline in the net interest margin.

• Ahli Bank’s shares increased as much as 2% during the first nine months of 2025.

• Net profit recorded solid growth despite a significant drop in interest income and net interest margin. This increase was driven by higher commissions and fees, stronger investment income, and lower impairment charges.

During the first nine months of 2025, Ahli Bank's stock price experienced a decent increase. Commencing the period at 3.45 riyals per share, by the end of the period, the stock had settled at 3.55 riyals per share, reflecting a 3% increase in its value. In comparison, the QSE index increased by approximately 2% over the same period. This indicates that the company's stock performance was slightly better compared to the market average. Also, within the period, Ahli Bank recorded a notable insider trade, where insiders sold stocks amounting to 13 million QAR.

Here are the key numbers:

● Interest Income: 2,321 million QAR vs. 2,690 million QAR in the first nine months of 2024 (a 14% YoY decline).

● Net Interest Income: 1,000 million QAR vs. 1,270 million QAR in the first nine months of 2024 (a 21% YoY decline).

● Net Profit: 676 million QAR vs. 647 million QAR in the first nine months of 2024 (a 4% YoY increase).

● Earnings per Share: 0.248 QAR/share vs 0.237 in the first nine months of 2024 (a 5% YoY increase).

Ahli Bank experienced a significant decline in its net interest margin, dropping from 47% in the first nine months of 2024 to 43% in the same period of 2025. This negative development followed interest rate cuts in 2024 and 2025 by major global central banks, primarily the Fed and the ECB. The decline in the net interest margin adversely impacted the bank’s net profit, which amounted to 96 million QAR. Additionally, the net profit was further affected by a substantial drop in interest income, amounting to 174 million QAR.

Ahli Bank’s core business benefited from improved performance across non-interest income streams. Commission and fee income rose significantly, contributing QAR 54 million to net profit, driven by higher transaction volumes and enhanced service offerings. Additionally, investment income added QAR 10 million, reflecting effective portfolio management and favorable market conditions. These developments helped offset some of the pressure from declining interest margins.

Facing challenges in the macroeconomic landscape and growing concerns of an impending recession in previous periods, the banking sector encountered heightened levels of credit risk. In a decisive move, Ahli Bank made substantial adjustments to impairment expenses during 2024. In the first nine months of 2025, management adopted a less aggressive position toward risk. This strategic decision had a notably positive impact on the company’s profits, amounting to 263 million QAR. This choice highlights Ahli Bank’s proactive approach to addressing and managing the risks associated with its asset portfolio amidst evolving economic conditions.

For more comprehensive information, please refer to the reliable financial information source, http://sahmik.com.