QIB Delivers Strong H1 2025 Profit on Solid Investment Gains
• The company's net income from financing activities declined by 2% year over year, while net income from investing activities grew by 15% year over year.
• Qatar Islamic Bank shares increased as much as 4% during 2024.
• The net profit was boosted by a significant increase in investment income, reduced distribution to investment accounts, and reduced impairments. This increase was mitigated by a drop in financing income.
In 2024, Qatar Islamic Bank (QIB) delivered a solid financial performance, which was reflected in its stock price movement. The bank's shares opened the year at 21.35 Qatari riyals and closed at 22.15 riyals, marking a 4% annual gain. This performance outpaced the broader Qatar Stock Exchange (QSE) Index, which rose by approximately 2% over the same period. The relative strength of QIB’s stock suggests investor confidence in the bank’s strategic direction, profitability, and resilience in a competitive financial sector.
Here are the key numbers:
● Net income from financing activities: 4,556 million QAR vs. 4,656 million QAR in H1 2024 (a 2% YoY decline).
● Net income from investment activities: 802 million QAR vs. 695 million QAR in H1 2024 (a 15% YoY increase).
● Net Profit: 2,163 million QAR vs. 2,058 million QAR in H1 2024 (a 5% YoY increase).
● Earnings per Share: 0.920 QAR/share vs. 0.870 QAR/share in H1 2024 (a 6% YoY increase).
● Dividend per Share: 0.400 QAR/share vs 0.250 QAR/share in H1 2024 (a 60% YoY increase). es. This is an interim dividend, so the final one will be decided by the Board after and approved by the Assembly after the 2025 annual report disclosure.
The operational dynamics of Qatar Islamic Bank continued to shift as the ratio between operating income and return to unrestricted investment account holders and sukuk holders increased from 2.31 in H1 2024 to 2.39 in H1 2025.
A breakdown of QIB’s income sources reveals a shift in the composition of earnings during the period. Income from financing activities declined, exerting downward pressure on net profit with a negative contribution of 99 million QAR. In contrast, income from investing activities rose, offsetting the decline and contributing positively to net profit by 107 million QAR. Furthermore, the bank benefited from a reduction in distributions to investment account holders, which provided an additional boost to profit, adding 72 million QAR. These combined effects underscore the growing importance of investment returns and cost efficiency in supporting profitability amid softening financing income.
With its reputation and proper management actions in investing and risk management, the company can become even stronger. Maintaining its reputation will help retain the confidence of investors and encourage them to keep their funds invested at favorable rates.
The net profit was further supported by a significant reduction in impairments, which contributed an additional 32 million QAR. At the same time, commissions and fees increased by 16 million QAR, reflecting enhanced revenue generation from the bank’s core business activities. Together, these factors highlight the company’s continued focus on strengthening asset quality and diversifying income streams, reinforcing its commitment to sustainable business growth and improved financial performance.
On December 31, 2024, the Group’s Board of Directors approved the partial divestment of QInvest LLC, a subsidiary licensed by the Qatar Financial Centre Regulatory Authority (QFCRA) to conduct a range of banking and investment activities. The divestment process is expected to be completed in 2025. During the first half of 2025, QInvest LLC recorded weaker financial performance, contributing a negative impact of QAR 18 million to the Group’s net profit. This underperformance, combined with strategic considerations, has prompted questions regarding the rationale and timing of the divestment decision.
For more comprehensive information, please refer to the reliable financial information source, http://sahmik.com.