Lower Interest Margin and Provisions Weigh on The Commercial Bank’s Q3 2025 Profit Down

• The company's interest income declined by 2% year over year, and the net interest income margin experienced a substantial decline.

• Commercial Bank’s shares increased as much as 5% during the first nine months of 2025.

• Net profit was pressured by the reduced revenues, a high cost of credit, impairments, and increased expenses.

Commercial Bank's stock price demonstrated a notable increase, beginning the year at 4.35 riyals per share and ending Q3 2025 at 4.59 riyals per share, marking an increase of approximately 5%. This performance outperformed the Qatar Stock Exchange (QSE) Index, which saw an approximate 2% increase over the same period. Insider activity was notable in the first nine months of 2025, with insiders purchasing shares valued at 19 million QAR.

Here are the key numbers:

● Interest Income: 7,138 million QAR vs. 7,263 million QAR Q3 2024 (a 2% YoY decline).

● Net Interest Income: 2,483 million QAR vs. 2,748 million QAR in Q3 2024 (a 10% YoY decline).

● Net Profit: 1,785 million QAR vs. 2,341 million QAR in Q3 2024 (a 24% YoY decline).

● Earnings per Share: 0.44 QAR/share vs 0.59 QAR/share in Q3 2024 (a 25% YoY increase).

Commercial Bank Qatar faced a notable contraction in its net interest margin in Q3 2025, decreasing from 38% in Q3 2024 to 35%. On top of that, interest income for Commercial Bank showed a remarkable decline in Q3 2025, exacerbating the financial impact of the adverse movement in the net interest margin. The reduction in the net interest margin alone contributed to a 218 million QAR drop in net profit, while the decline in interest income added a further negative impact of 47 million QAR. These combined factors significantly weighed on the bank's overall profitability. In response, the company is actively pursuing strategic initiatives aimed at mitigating these challenges and regaining a positive financial trajectory.

Shifting our focus to expenses, it's important to note the significant jump in staff expenses. This increase has adversely impacted net profit, totaling 125 million QAR. The increase can be largely attributed to a significant increase in the component related to performance rights.

The negative impact was further reflected in higher impairments, which contributed an adverse effect of QAR 68 million on net profit.

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