Good afternoon, everyone, and thank you for joining us today. This is Janany Vamadeva from Arqaam Capital.
Recording in progress.
Welcome to Doha Bank's full year 2025 earnings webcast. Without further ado, I will now turn the call over to the Group Deputy CEO. Over to you.
Good afternoon, and thank you to Janany and Arqaam for hosting the Doha Bank fiscal year 2025 investor results call. Of course, thanks to all of you that have joined us today. I am Dimitrios Kokosioulis, the Deputy CEO of Doha Bank, and as in previous calls, I will take you through some high-level updates on the business, after which I will hand over to our CFO, Aman, to cover the financial results before we move direct into Q&A. Let me begin with an overview of the progress we made throughout 2025 under the leadership of our Group CEO, Sheikh Abdulrahman. Our human transformation continued to demonstrate disciplined safety execution, delivering meaningful outcomes across the organization. Now, if we cover some strategic milestones in 2025, we achieved several important strategic advancements.
More specifically, we successfully migrated our credit card portfolio to Mastercard, enabling global benefits and stronger security and a more seamless customer experience. We have also launched one of Qatar's first API application performance banking platforms, giving corporate clients real-time transaction capabilities and deeper integration into their financial operations. From a governance perspective, we strengthened our risk management framework by establishing dedicated fraud management and technology risk functions, which is an important step in the bank's resilience agenda. Capital markets continue to demonstrate confidence in Doha Bank. Throughout the year, we raised nearly $1.6 billion through four bond issuances. In December, we priced QAR 500 million sustainability issuance listed earlier this month, marking the first ever sustainable instrument on the Qatar Stock Exchange. We also executed Qatar's earliest digitally native note issuance for $150 million within T+0 settlement on Euroclear's D7 platform, underscoring our commitment to market innovation.
Continuing on covering our digital transformation, we were able to accelerate our journey meaningfully. We launched our award-winning corporate mobile app, which is one of the best in the country, and enabled full digital onboarding for retail customers. Our retail app remained to be number one in Google App Store and number two in Google Play in Android banking in Qatar, reflecting the strong adoption that we aimed for. For corporates, we delivered impactful digital capabilities, including tax authority integration, and we have received accolades from the government entities, including the tax authority, remote check deposit, end-to-end trade initiation and approval, and enhanced customer servicing tools. We expanded our robotics process automation program with over 20 new automated processes, in the back office have completed major enhancements to our treasury management platform.
Something important that we have to mention is that we were able to also enhance customer experience in retail banking. As a result of the Ipsos market research survey we launched in 2025 to benchmark us against the last survey we launched in 2023, we have seen some very significant jump in customer satisfaction. From 53% satisfaction in 2023, we went up to 93% satisfaction from retail customers in 2025, and net promoter score from -22 points in 2023, it went up to +61 points. So we saw 83 points up in 2025, and this marks the great confidence and satisfaction that our customers have in our services and product offering. This has placed us to be the best conventional bank in the country. Actually, we strengthened our international presence through a strategic MoU with Seviora Holdings to boost Qatar Asia investment flows.
We also participated in Sibos and the World Bank IMF Annual Meetings, contributing to discussions shaping global financial services. Additionally, we expanded our wealth management platform through new global partnerships, providing improved market access to our ultra-high net worth clients. Community engagement remained a core pillar of the human transformation. We hosted a youth summer camp with the Qatar Equestrian Federation and continued supporting major national events, including the Global Champions Arabians Tour and the upcoming Ooredoo, Doha Marathon 2026, which took place actually last week. At Web Summit Qatar 2025, where we participated as a platinum partner, we generated strong visibility, new to bank customers and meaningful business opportunities, showcasing the latest developments actually in technology, in various self-service devices, ATMs, etc. Of course, we launched and we showcased our latest mobile banking, retail mobile app, and corporate app. Now, the outlook for 2026.
Looking ahead, our strategic priorities for 2026 remain clear and focused. We will continue to grow a high-quality loan book in priority sectors while maintaining a prudent risk appetite and proactive NPL management. Digital channels will be further enhanced as the primary customer touchpoint . We have seen also a trade-off between digital channels and branches. We have been able to reduce the branch network from 21 branches down to 13. We have further plans to reduce our retail footprint and enhance our digital channels, so that we can cater our clients through digital channels and reduce costs as well. We are going also to focus on and enhance our mobile offering and accelerate the use of AI and machine learning for service delivery, personalization, and new product innovation.
We will continue optimizing our cost base, reviewing our branch footprint, and investing in modern systems to improve our cost-to-income ratio and productivity. Diversifying funding sources and maintaining strong capital ratios across all jurisdictions will remain a core focus. We will work to further strengthen liquidity, funding, and overall balance sheet health. Finally, we will continue deepening ESG integration into our operations, risk framework, and business strategy, building on the new momentum of our recent sustainable issuance. With that, I would like to hand over to Aman, who will take you through our 2025 financial performance. After his remarks, we will be happy to answer any questions that you may have. Aman, please, let's start with the financial.
Thank you, Dimitrios. This is Aman, I am the CFO of the bank. I will take you through the financial highlights. Starting with the balance sheet. The total assets grew by around 9% year-on-year. Major contribution coming through the loan book, showing a growth of around 11% year-on-year. The investment portfolio showed a growth of around 7.5%. The loan growth guidance for 2026 is 5%. Knowing it is a conservative target, but we are being cautious as we continue to deal with the legacy and possibly negotiating favorable terms for the bank and at the same time exiting some relationships. The customer deposits grew by around 13.5% year-on-year. The strategy here was to attract the customer depositors as compared to short-term interbank funding. The LDR remains strong at around 94.45%, well within the regulatory maximum. The capital ratios remain healthy.
The bank CET1 stood at around 13.16% and the total CAR around 19.05% respectively. Given the expected asset growth and given the current equity structure, the guidance for 2026 for total CAR is to be around 18%. Moving on to the income statement. The bank achieved a total profit of around QAR 920 million , which shows a growth of around 8% year-on-year. The net interest income remained flattish. The ROE for the year stood at around 6.74%. The guidance for 2026 ROE is to be somewhere in the range of 6.7%-7%. NIMs stood at around 1.72% versus 1.9% last year, owing to the rate cuts happened Q3 and Q4 of this year.
As we have earlier explained on the calls that based on our book, the asset price immediately whereas the liabilities show a lag effect between three to six months, which was also reflected in our NIMs increasing from Q1 to Q2. Similar trajectory will follow for the current year. We are anticipating actually a couple of rate cuts, as per our forecast for the current year 2026. One of the highlight for the year was that the fee income as compared to last year, now fee income for the year 2025 was 15.7% as compared to 15.14% last year. As we have continued to give the guidance for fee income to grow beyond 15% of the total operating income, we are well on track. The bank's cost increased by around 4.7% during the year, and the cost to income ratio stood at close to 40.3%.
Given we are still in the transformation, our guidance for cost to income ratio next year is to be around 39%-48%. The net impairment for loans for the current year was around QAR 738 million as compared to QAR 702 million last year, an increase of around 5.1%. The cost of risk was 115 basis points as compared to 118 basis points for the same period last year. The guidance for cost of risk for the year 2026 is to be around between 105- 115 basis points. One of the major highlight for the year was improvement in NPL ratio from 7.43% last year to 6.6% this year, owing to the loan book growth, the recoveries, and some write-offs. The guidance for the NPL ratio for the year 2026 is to be around 6%-6.1%.
A very healthy specific provision coverage as of 2025, around 76.4% as compared to 74.8% last year. We now open the floor to questions and answers . I'll hand it back over.
Janany.
Janany.
Thank you for the presentation. We can move to Q&A now. If you wish to ask a question, you can use the raise hand option or type it in the Q&A box. Before we go to the queue, I thought I'll start off with a couple of questions, if I may. Margin pressure during Q4 was a bit worse than what we had expected. If I remember correctly, in the last call, we were expecting the margins to improve in H2E and Doha Bank, of course, is better positioned for rate cuts. If you could give some color on the margin drivers in Q4, and also the guidance you've given for 2026 and 2027, because it looks like you have revised it downwards, including the return on equity as well from 10% to like 7% handle.
If you could explain what has changed, that would be helpful. Thank you.
Thank you, Janany. I will start with the factors that led to the dip in NIMs. As you know, there were rate cuts that happened during September, October, and December. At the time, earlier in the year, earlier in 2025, we mentioned that if there were no further rate cuts, you would see an improvement in margin owing to the composition of portfolio and exactly our margins jumped up in Q2. At the end of Q3 and Q4, owing to the rate cuts, there is a short-term dip in NIMs. We are going to, based on a trajectory that in Q1, we are not expecting any further rate cut, we are expecting the margins to improve. Any time there is a rate cut, there is always a short-term dip, but in long term, it favors Doha Bank, and this is something that we are maintaining.
Your question on the revised guidance for NIM for 2026 and 2027 is, first of all, we gave five-year guidance that was given some three years back. We are currently working on a revised five-year guidance that will happen during Q1, and we will update the investors in the Q1 call. Currently, we have worked on the guidance for 2026 and 2027 and have revised it accordingly. But further five-year guidance will come up in the Q1 investor call and it will show improvement in margins, definitely.
Thank you, Aman, that was helpful. We have a question from Chiro. Chiro, please go ahead, unmute yourself and—
Hi. Hello, can you hear me?
Yeah, we can hear you loud and clear.
Yeah. First, congratulations for a good set of results. I mean, overall, it continues to improve. First, I want to get a little more sense purely on the asset quality side, basically. How are the recoveries coming from? Which are the sectors? Where do you expect things to improve going forward? Some more clarity on that side would be very helpful. Even purely from the balance sheet side of it, the deposit growth has been quite solid. If you can give us some color on how do you plan to take your loan-to-deposit ratio going ahead, and what kind of deposit support would be required to have this kind of loan growth going ahead?
Okay. Thank you for that question. This is Salman Siddiqui. I'm the Chief Risk Officer for the bank. I'll take the first part of your question, which is on the asset quality, and the latter part will be taken by my colleague, Fawad, the Chief Treasury and Investment Officer. As far the asset quality is concerned, yes, we will continue to see improvements. The bank has devised a very well-thought-through plan for recoveries, resolutions, which includes certain traditional and certain out-of-the-box solutions, which we've already touched upon in our earlier investor calls for the third quarter and the quarter before that. Those actions are at play and we are seeing the results thereof materializing, and we expect those results to continue materializing.
As far as the sectoral recoveries are concerned, I cannot really pinpoint a certain number, but we have gone down to the level of each exposure, which we feel there was a distressed exposure and needed redressal and have carved out multiple strategies on each exposure, from the perspective of if strategy A does not work, how do we go to strategy B? Those have been simulated and run through multiple times to see what are the odds of a successful outcome. Having done that, have we finalized our action plan. There is a big—
Just a— no, sorry, please go ahead. Yeah.
I am sorry?
No, sir, please go ahead. I will have a follow-up after this. Yeah, please finish your answer. Sorry.
I think I have completed my response.
Yeah. On the asset quality side of it, easy things seem to be improving. Coverages also have improved quite a bit. Why is the cost of risk still at elevated level over the next two years? Do we expect it to come down or you have been a little more conservative there?
Okay. It is expected at both levels. The cost of risk, I understand that it is basically coming down to 105-115 basis points, which my colleague, [Jeres], mentioned earlier. For 2027, the guidance is further down, which is under 210 basis points. We will see a continuous decline in the cost of risk. However, as conservatism would dictate, we are also very cognizant of the resolution plan that we are looking at, and that plan also entails that, as the resolution comes in, we redeploy the recoveries into better coverage strategies as well. We are looking at both sides that, how do we resolve the distressed book while maintaining the ratios at better than or in line with industry standards?
Okay. Thank you.
Thank you.
On your second question, this is Fawad Ishaq. I am the Chief Treasury and Investment Officer. First, very clear strategy around making sure that we were raising deposits at the right levels along with paying off our interbank, as the CFO had mentioned earlier, and diversify our deposit base. The key sort of focus was for us on the retail side naturally, to increase Riyada customers, to have more of marketing in terms of CASA increase. On the corporate side, all the asset growth that you have seen with the corporates, these were done on back of taking salary accounts, taking deposits, having sort of a strategy to make sure that we get the incivility once we go deploy the balance sheet. Finally, to make sure that on the long-term liability side, we are looking at the EMTN market, we are looking at syndication, bilateral trade loans.
As pointed out earlier, we did our first Qatari Riyal issuance, which was a sustainable one, the first one to be listed on the QSE. We also did the first tokenized issuance as well in the market. We issued the 500 initially at the tighter spread, this year for Doha Bank, then we did a tap, and then we had several private placements. This whole thing is part of a funding plan, which we looked at it last year, and now we extended that funding plan going for next five years to make sure that we have every pocket covered from a deposit diversification basis, and also branching out in terms of the long-term liability that we raise through EMTN and syndication. We will be looking to diversify into other markets this year. We are looking at the Asian markets, we are looking at local currency markets.
The plan is to keep on enhancing the deposit base. Finally, on the LDR, if you look at it historically, we had been above that 100 level until 2023. 2024 is when we started the transformation. Since then, we have been compliant, and we keep it optimal between 90-95, and that is what we will target along with our asset growth.
Just a follow-up. Again, the loan growth guidance appears to be a little bit conservative. Even this quarter itself, you are being able to beat maybe 1.5x the next year guidance. Are you again being conservative there with deposits flowing in?
Okay. I'm sorry. This is Salman again. As far as the loan growth is concerned, we have taken a very, I would say, knowledgeable view of the market, and we have expressed it in our appetite. As you saw that the bank, as you mentioned as well, has exceeded the expectations, but we would still continue to practice that, I would say, cautious but steady approach of quality asset building. Our business teams are at work on that. The plans are very robust, the plans are very promising. We would rather under-commit and over-deliver rather than over-commit and under-deliver. That is what we are looking at, setting the right expectations, then perhaps meeting them and exceeding them.
Aman here, just to add something. As we are growing the loan book, at the same time, we are also looking at exiting some relationships which are not favorable to the bank. What you are talking about is a net loan growth for the coming year.
Makes sense, yeah. Thank you very much, and all the best for the next two years at least. Thank you.
[inaudible].
Welcome.
Thank you. Our next question comes from Murad Ansari. Please go ahead.
Yes, hi. Good afternoon, and thanks for the presentation. A few questions on the results again. The fourth quarter, going back to the loan growth number, has been quite strong, and we've seen it across a number of banks. Most of the banks were guiding towards mid-single-digit kind of loan growth, and fourth quarter has been quite strong. Just wanted to get a sense of what sectors have been the key drivers over here? When you look at fourth quarter, were there some corporate deals that got front-loaded, and hence we've seen this growth number being much higher than what was guided for? Are there any possibilities of similar surprises in next year on the corporate side? Just wanted to get a sense of the pipeline in terms of corporate deal.
Could there be something which could end up driving up loan growth higher than your expectations? My second question is around the asset quality. We've seen some improvement on the Stage 2 loans, a small one, about, I think, around QAR 500 million. Is there prospect for when you say improving NPL coverage, building up coverage across, should we be looking at some reclassification over here? On Stage 2, is there something that you're reviewing which could possibly go back into Stage 1, and lead to some improvement in this ratio? Related to that, on NPL coverage, you've made significant improvement over since last year, roughly about 400 basis points on coverage. You're guiding to another 100 odd basis points in provision charge. In terms of coverage, where do you want to be by the end of, let's say, 2027?
With both years looking at about 100 basis points, where do you think is a comfortable level that you would be happy with, or targeting in terms of NPL coverage? Lastly, on margins. You highlighted the timing effect. Just wanted to also get on your expectations of rate cuts, what do you expect in 2026? Again, should we see a similar kind of cycle where, if rates are stable, we should see spreads move up to that 1.7, 1.8 kind of level, over the next six months? Thank you.
Okay. Thank you for that question. Very detailed one and multifaceted, definitely. We will start with the first part of it, which was on the growth. Yes, the growth trajectory has been really impressive, and it was primarily driven by the bank's posture on the growth of the GRE sector, which is a strategic milestone of the bank as well, part of our transformation program as well, to focus on the GRE because there is a lot of drive from within the country aligned with the Qatar National Vision 2030, where the growth was, the bank partake in that, and we have achieved the anticipated goals for the GRE sector growth, which was at one point in time, if you were to look at our 2024 numbers, it was around 1%, slightly above that, and now currently we are at more than 5% of the portfolio.
8%.
We are currently at 8%. You can see that is a phenomenal level of growth, and these are very well-structured transactions. We continue to anticipate a very healthy pipeline. In that sector, we have some really solid deals in the pipeline, so we see a lot of steady growth that is further augmented by our pipeline of corporate, or I would say pure corporate deals that are in line with the bank's approved risk appetite. They meet our return objectives as well, and also align with the Qatar National Vision 2030 of the State of Qatar. That is for the first part of it. We are also very conscious of that we would like to continue diversifying our portfolio, so the bank is getting into sectors that are new in terms of diversification.
We are getting into health sector more, we are getting into aviation sector, we are getting into tourism. These are some of the sectors that are providing the early mover advantage to that as well, aligned with the government posture. We see that it is the perfect marriage between our risk appetite and what we want to derive out of it. So that is the first part. As far as the asset quality is concerned, Stage 2 in particular, we will see there is going to be two parts in it. The first part would be the regular curing part, which is the accounts that have already achieved their curing and they would complete their curing period of one year, that cool off, they would revert to Stage 1 as per the normal practices under IFRS 9 regime.
Moreover, as I earlier mentioned in my statements, my response to a certain question earlier, we have this very well thought of strategy around the NPL resolution and the distress book resolution, which primarily comprise of a legacy Stage 2 portfolio. That strategy is at work. The results of that will continue to reflect through our numbers, throughout 2026. Cost of risk, that was the third part of your question.
Coverage.
The coverage, sorry. We would continue to maintain the coverage. We would endeavor to maintain the coverage around 76%-80% region. That is the bank's anticipated number, and we have our plans to continue hovering around that number only to better it, not to worsen it. I think the fourth part I will leave to—
Margins.
Yeah, the margins to my colleague, the CFO.
Hi. Aman here. With respect to your question on the margins, we are definitely expecting improvement in Q1 and Q2, early Q2. Our expectation for rate cuts is we have factored in a rate cut somewhere end of Q1 and Q2. Again, if the timing matches our expectations, we again may have a short-term dip. Given that we have most of our loans have started actually reaching the floors, we are not expecting the financial impact to be as to what it is right now, given that our funding would continue to be repriced once the rate cut happens. Our expectation as provided in the guidance is we want to land somewhere around 1.8-ish end of next year. This is the expectation.
Thank you so much for the detailed responses, and all the best for 2026. Thank you.
Thank you.
Thank you. We have a few questions in the Q&A box. The first one is from [Asalan Althaf] . He is asking about whether you are considering switching to half-yearly dividends.
Aman here. I will take this question. Currently, we have not discussed this, but again, these are things if it happens, as a market participant, you will definitely know. But currently, no such discussion is happening right now, but we will update the market as and when.
The second question is from Mikhail. Loans did grow by a good 6% during Q4, but looks like it has not translated into asset yielding ones, as this has not necessarily materialized into higher interest income. He is wondering whether the loans, it is to do with the yields or to do with the rate cuts.
I think this question is, I would say, that would have two parts to it. Of course, we are targeting a better quality. But in terms of yield, my earlier comment that we are planning to exit some relationship was based on the fact that we are currently reviewing our whole portfolio when it comes to income generation. Because I think we have already established strong protocol when it comes to addressing the asset quality part that we have discussed over the quarters. But when it comes to income generation, of course, now we are reviewing the whole book, and hence, we may be exiting some relationships. Now, specific answer to your question, of course, no, there were margins, but as you also know that there were rate cuts that happened in Q4 that have basically diluted the impact of any improvement in margins that may have come.
Thanks, Aman. We have our next question from Srikanth. Please go ahead. I think you have to unmute yourself. I do not think we can hear you, Srikanth. I think you voice line. Just a reminder, if you have any questions, you can use the raise hand option or send your questions to the Q&A box. I think we have a question in the Q&A box. What measures are the bank taking to improve its cost-to-income ratio?
I will take this. This is Aman. I think our Deputy CEO earlier, when he was giving the update, he mentioned about the initiatives which involves rationalizing all aspects, including rationalizing or looking into our network. As you know, at one side, sorry, we are saving the cost, but at the same time, we are under transformation and those costs are being reinvested, income generating project that will be beneficial for the bank in the future. Just to give you some perspective on the numbers, last year alone, we saved around 100 million that was reinvested into multiple initiatives in the bank.
This year, 2025, we saved another 50 million. Again, most of it was reinvested. But having said that, the trajectory for the cost-to-income ratio is low going forward from next year onwards, as we will be achieving our optimal efficiency under the transformation program that we are going through. You will see a continuous downward trend.
But then also, just to add to Aman's points, we are taking measures, and there are also specific items that we're looking into in the overall cost posture of [Doha] Bank. Further rationalization of our retail network in domestic hub in Doha, in Qatar. As I said, from 21, we are down to 13. We are looking at some more branches to close. This is depending also on the penetration we have and adoption of the, let's say, the digital adoption that we have. We see that it's going ahead with a steady increase. Actually, we are actually seeing that by adding more features like digital account opening, digital onboarding, we're going to have a top up for loans, STP through mobile banking, e-loan. We see that the customers are using more and more our digital channels.
So we will see further reduction in cost in terms of rationalization of our domestic footprint, including also international. We have already closed some locations overseas, rep offices, branches. We are looking actually to further streamlining this footprint we have internationally. So there are some opportunities there. Of course, the use of new technologies. We are going to focus on AI as well. This give us opportunity to leverage our current headcount and to see there might be opportunities to proceed with the restructuring so that we can actually reduce cost even further. Of course, it's business as usual to renegotiate contracts, leases, and other big contracts with big suppliers, third parties, and we have seen some good improvements there. So this is a key items of our cost agenda and rationalization agenda.
As Aman has stated, we are actually taking measures, but given the fact that we have to invest in new systems, we see that most of the savings are going there. That's why the cost-to-income ratio has not been decreased further. But I think with the actions we're taking, you will see some also tangible results in this field as well.
Thank you for that. We have our next question from Andy Brudenell. Please go ahead.
Hi there. Thank you. I just wondered, could you talk a little bit about non-funded income? This is supposed to be an area that will be a larger contributor. I guess if you have this cost-income ratio reduction target, you are going to need some non-funded income to contribute. Fee growth in 2025 perhaps was not what it could have been. Yeah, any color there, please?
Okay. Andy, Aman here. I will take the question. The non-funded income has two components, the fee and the other income. The fee income has actually shown a growth. We have grown this by around 3%, QAR 11 million in terms of riyals. When it comes to the other income, there are some components where, or I would say non-recurring components that are specifically relating to the investment side that did not happen this year. Again, they are dependent on multiple factors, including the timing of the market.
Okay.
As well as some issues on the Forex side, as we were constrained by certain regulations that led to a dip in that particular area. Having said that, we have plans for 2026 to basically further improve this number. Not just the fee component, but the other component as I just explained.
Is there a target of contribution, like non-funded income over total income?
The way we target, Andy, as I earlier explained on the call, our main focus would be to further enhance the fee income part of the non-funded income. We have reached around 15.7%. Next year, our target is to grow it beyond 16%, because that is a more recurring part and this is something that the bank, as Dimitrios and Fawad earlier explained, we have established those relationships with those large corporates and GREs, on the back of which we are getting business which is not just the loan or deposit beyond that. That would help us in generating that fee income part component.
Okay. Thank you.
Thank you. We have one more question in the Q&A box from the queue. Can we know the progress on your buyback program?
I will take that question. Currently, I would say that we do not have any update from the last quarter. We are still basically in the regulatory approval process. When there is an update, we will definitely share with the market.
Thank you, Aman. We have Srikanth again. Please, go ahead.
Am I audible?
Yes.
Yeah. Thank you. Thanks for the opportunity. Regarding your 2027 guidance you earlier mentioned, now you have revised it to 7%, 7.5% from 10% earlier. But if we see cost of risk, we still expect around 100-110 basis points. This reduction in guidance is purely due to NIM moderation or are there any other moving parts also involved? Secondly, you mentioned this year you are looking to exit a few legacy relationships. These are from contracting or any other sectors are also involved? Yeah, these are my two questions. Thanks.
Srikanth, just to understand, your first part of the question was on the loan book, right? When you said that five guidance from [7%] to 5%?
Yes. I want to understand, we are lowering our ROE guidance.
ROE, yeah. Sure.
Yeah. Cost of risk guidance is still high, around 100 and 110 basis points. This reduction in guidance is purely due to NIM moderation or any other factors are also considered?
Okay. Srikant, I will take the first part of the question. The second part, I think Siddiqui can handle, where you are asking about, sorry, the exiting relationships. The ROE guidance, as I earlier explained on the call, the five-year guidance was given around two and a half or three years back. As we speak, we are working on the revised guidance for the coming five years, but having said that, we work for guidance for coming year and the next year. The revision in ROE partly to do with the rates in the market, of course, and partly recalibration of our business model. There are multiple aspects to it. Having said that, as I earlier explained, we will come back with the five-year guidance, and that will, I think, show you a more detailed view on our projections.
Hi, Srikanth. This is Salman Siddiqui again. If you don't mind, can you elaborate a little on the second part of your question?
Yeah. The second part, I wanted to know, you mentioned this year you will be looking to exit a few legacy relationships, right?
Just wanted to understand from which sector these loans you are looking to exit for.
Okay. As I mentioned earlier, we've dived into the depth and have come up with strategies around the accounts that either post or can potentially pose a distress to the book. What we've done is we've assessed those relationships. These are across certain sectors, and primarily this is, as you mentioned, this is contracting and construction sector, that where we see that if the relationship is under constant stress, we have worked out an exit strategy, which is well thought of and with minimal damage to Doha Bank, so that our growth trajectories do not get impaired other than our ratio maintenance or in coverage ratios that we are looking at. Yes, it could be the real scale contracting sector, but selective. Very selective.
Thanks. This was really helpful.
Thank you. We have one more question on the Q&A. The bank has closed some branches in recent years. What is the management view to be the optimal number of domestic branches? Are there plans to close some more branches this year?
Okay. This is Dimitrios. I will take this question. As I said, the momentum and the aspiration is to close more branches, and to keep a handful of branches in the country. This depends on our digital penetration, and what we are going to do, because we have many also clients that require to have access to a branch. Now, we go down to 13 from 21. There is a plan to reduce this amount by another two to three branches in the next year or so. Now, depending on our plans to utilize latest technologies, what the regulator is actually allowing us to do with perhaps setting up a digital attacker. These are plans that we have in the plan, but we have to evaluate them, get also clearance from the regulator, and implement. Again, we want to focus on having affluent branches.
We are closing the traditional branches that we have, since we can cater for most of the transactions through mobile banking as we go through. We are going to open a few, a couple or three affluent branches, across the key locations so that we can cater for this segment, which we believe is going to give us good fee income, and good profit for Doha Bank. I cannot give you at this point in time, let us say, a specific amount of branches that we are going to end up in the next year or so. Again, the vision is to stay with a very handful number of branches, mainly focusing on affluent branches, be able to utilize the latest technologies, including the latest directive and instructions that were sent out by QCB on digital attacker, and how we can set up a digital bank.
This is part of things and our options that we have open to make sure that we utilize. Of course, we can actually by that, reduce even more branches and have a handful number of branches. Again, as I said, will be affluent branches around the country. We want to be less than 10 branches. That is for sure, to have a single-digit number of branches. Again, the exact number will be quantified as we move ahead and working with the regulator and working with the digital absorption and penetration.
Thank you for that. It looks like we do not have any more questions, so thank you everyone for joining the call today. I will pass the call back to management for any concluding remarks.
Thank you to the market participants, and thank you always to Janany for hosting on Arqaam Capital. Everybody I have seen on this list, I have spoken to throughout the years, so please reach out to me for any follow-ups that you may have. Othewise, we will talk soon. Thank you, guys.
Thank you so much.
Thank you.