Commercial Bank earnings fell in the nine months ended September 30, 2026, as higher provisions and operating expenses outweighed growth in interest income. The Qatar-based group reported after-tax profit of QAR1,539.4 million, down 13.8% from QAR1,785.5 million a year earlier. Results were announced on October 20, followed by an October 26 earnings call in which management warned of potential fourth-quarter margin pressure.

Key Takeaways

  • Net provisions rose 62.5%, outweighing stronger operating income.
  • Customer lending excluding acceptances grew despite a smaller overall balance sheet.
  • Management retained its cost-of-risk targets while warning of potential margin pressure.

Commercial Bank earnings show the cost of higher provisions

Commercial Bank’s nine-month results announcement showed net operating income rising 2.9% to QAR3,568.3 million. Net interest income increased 10.2% to QAR2,800.1 million, but operating expenses grew 10.1%, leaving operating profit broadly flat at QAR2,415.1 million.

Net provisions reached QAR979.8 million, compared with QAR603.1 million in the first nine months of 2025. The bank said it was spreading provisioning more consistently throughout the year rather than taking a substantially larger charge in the fourth quarter. Recoveries increased 15.2% to QAR268.5 million.

Profit before Pillar Two tax fell 15.9% to QAR1,644.1 million. A QAR104.7 million Pillar Two charge reduced the final result, although that charge was lower than the QAR169.9 million recorded a year earlier.

Fee and commission income declined 5.8% to QAR692.5 million. Excluding one-offs, the bank reported growth of 11.4%, distinguishing underlying fee activity from the reported decline.

ItemDetails
Group cost-to-income ratio32.3% at September 2026, versus 30.2% a year earlier.
Common Equity Tier 1 ratio12.8%, versus 13.0% at September 2025.
Total capital adequacy ratio18.9%, versus 17.9% at September 2025.
Investment securitiesQAR41.3 billion, up 5.1% year over year.

Loan growth contrasts with lower assets and deposits

Loans and advances excluding acceptances increased 6.3% from September 2025 to QAR100.7 billion. Total assets nevertheless fell 4.4% to QAR183.6 billion, mainly because balances due from banks declined.

Customer deposits fell 3.0% to QAR83.1 billion. Within that smaller deposit base, low-cost deposits increased 3.6% to QAR31.4 billion and represented 37.8% of the total.

The non-performing loan ratio stood at 5.7%, compared with 5.8% a year earlier. That improvement did not prevent a higher provisioning burden: net cost of risk reached 108 basis points, above management’s 90–100-basis-point target range.

Management flags fourth-quarter margin pressure

On the October 26 call, Chief Financial Officer Noman Ali described net interest margin as approximately 2.2%, with potential downward pressure of 5–10 basis points in the fourth quarter of 2026. He attributed the outlook to competition for domestic deposits and refinancing of medium-term debt previously issued at lower rates.

Management also attributed part of the higher credit charge to an update of the expected-credit-loss model. Chief Executive Officer Stephen Moss said the macroeconomic adjustment accounted for 13 basis points of cost of risk.

Those comments were guidance, not completed results. Management retained net cost-of-risk targets of 90–100 basis points for 2026–2027 and 70–90 basis points from 2028 onward. Ali also guided to a full-year 2026 effective tax rate of 11%–12.5%.

Read More News

More FinanceVelix news

Disclaimer

This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.