Qatar Islamic Bank (Q.P.S.C.) Investor Presentation March 2020
Agenda 1 Introduction 2 Operating Environment 3 QIB Business Review 4 QIB Financial Overview 5 Appendix Page | 2 Qatar Islamic Bank
Introduction Introduction Financial Snapshot Qatar Islamic Bank (“QIB” or the “Bank”) was incorporated in 1982 as the Mar-20 Dec-19 Dec-2018 QAR million first Islamic financial institution in Qatar . 166,052 163,519 153,232 Total Assets Largest Islamic bank (approximately 51% of total assets of listed Islamic banks in Qatar) and second largest bank in Qatar by total assets, Total Financing Assets 113,987 113,754 102,210 financing assets and net profit. Total Deposits (2) 110,241 111,621 100,598 Network of 26 branches and offices and over 178 ATMs and CDMs as at 31 Mar 2020. Shareholders Equity (3) 16,270 17,133 15,420 Leading domestic franchise supported by selective international 21,277 22,159 20,739 Total Equity footprint , with investments in the UK, Sudan and Lebanon. Strong financial profile with continued growth in recent years and Net Profit (3) 688 3,055 2,755 robust risk management framework. Non-Performing Financing (1) (%) 1.3% 1.3% 1.2% Rated A1 by Moody’s, A by Fitch, A+ by Capital Intelligence and A- by S&P. Financing to Total Deposits (2) (%) 103.4% 101.9% 101.6% QIB’s Business Units Capital Adequacy Ratio (4) (%) 18.9% 19.5% 18.8% 33,932 36,224 35,917 Market Capitalisation Shareholder structure / Strong Government Linkage 99% of Net Operating Income & 110% of Net Profit (3) • QIB’s shares are listed on the QH Wholesale Banking Personal Banking (QIA), Qatar Stock Exchange. 16.7% • The Qatar Holding LLC (“QIA”) Group Function is the single largest shareholder of QIB. Others, • The QIB’s Subsidiaries balance of 83.3% shareholders comprise prominent Qatari individuals, families and Source: QIB financial statements (1) As percentage of Total Net Financing Assets institutions. Customers’ Accounts + Unrestricted Investment Accounts (2) Note: As at 31 Mar 2020 (3) Attributable to shareholders (4) Ratio calculated as per Basel III guidelines in accordance with QCB regulations Page | 3 Qatar Islamic Bank
Key Credit Strengths First and largest Islamic bank in Qatar by total assets Second largest bank in Strong Government Qatar by total assets, support with the QIA as financing assets and its largest shareholder net profit Qatar-centric with Strong brand in Islamic selective international banking & innovative presence product offering Ambitious Operates out of one of transformation the fastest growing program economies in the world Higher operating Strong capital position efficiencies & asset quality Maintained consistent profitability Page | 4 Qatar Islamic Bank
Agenda 1 Introduction 2 Operating Environment 3 QIB Business Review 4 QIB Financial Overview 5 Appendix Page | 5 Qatar Islamic Bank
State of Qatar – Sustainable and Robust Growth Story… Overview of the State of Qatar (“Qatar”) One of the Largest Hydrocarbon Reserves in the World Total oil & gas reserves (bn boe) Ratings Moody’s: Aa3/ Stable 400 Oil Gas S&P: AA-/ Stable Fitch: AA-/ Stable 35 300 52 Middle East 212 200 197 23 298 266 11 38 100 155 58 Nominal GDP (2018): QAR 685 bn 150 151 102 98 93 Per capita income (2018): QAR 246,859 44 25 0 Population (2019): 2.9mn USA Kuwait UAE Iraq Qatar KSA Venezuela Iran Russia Source: International Monetary Fund (IMF) Sources: Bloomberg, BP, IMF, JODI, MDPS, MoF, QCB and QNB Group forecasts Qatar’s Credit Highlights Strong Wealth Generation • Third largest gas reserves in the world (1) (~13% of world’s total) and 93 largest exporter of LNG 100 20% • Among world’s wealthiest economies with robust growth prospects 90 71 80 66 • Historically large surpluses in both fiscal and external accounts that 15% 61 70 58 60 moved to fiscal deficit at manageable levels with the fall in oil prices. The 50 10% State is expected to post a surplus in the upcoming two years on the 40 back of higher oil prices. 4% 4% 30 3% 5% • Low level of sovereign indebtedness with no external liquidity pressure 2% 2% 20 10 • Track record of prudent budgetary and financial policymaking 0 0% • Sovereign's 2014 2015 2016 2017 2018 financial strength is also underpinned by investment holdings by the Qatar Investment Authority GDP per capita (PPP US$ thousands) Real GDP growth rate (%) • Stable political and attractive operational environment Source: International Monetary Fund (IMF) Page | 6 Qatar Islamic Bank
Economic Indicators Fiscal Position Current Account Balance Fiscal surplus / deficit (USD bn and % of GDP) Current account balance (USD bn and % of GDP) 40 15.3% 18% 63 49 31% 51 30 12% 23% 31.5 39 20 15% 24.0% 5.4% 14 3.6% 27 6% 9 6 7% 10 -1.6% 15 8.8 8.5% 6.8 -4.7% 0% -8 4.8% (1%) 3 3.8% 0 -5.5% (7.2) (2.7) 2014 2015 2016 2017 2018 -9 (9%) -10 (6%) 2014 2015 2016 2017 2018 Surplus % of GDP Surplus % of GDP Source: Qatar Central Bank annual report and International Monetary Fund (IMF) Source: Qatar Central Bank annual report and International Monetary Fund (IMF) Low Level of Indebtedness CPI Inflation (y-o-y) Nominal GDP vs. Government debt (USD bn) 3.4% 5% 200 2.7% 1.8% 150 0.4% 0.2% (0%) 206 100 192 167 162 152 50 93 90 71 57 51 0 (5%) 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 GDP Government debt Source: Qatar Central Bank annual report and International Monetary Fund (IMF) Source: Qatar Central Bank annual report Page | 7 Qatar Islamic Bank
Qatari Banking Sector – Robust Operating Environment General Overview The State of Qatar has been Supportive Throughout Crisis • Qatar Central Bank prohibits conventional banks from providing October 2008 QIA announced plans to acquire equity ownership interests Shari’a -compliant financing – the Qatari banking sector consists of 18 of up to 20% in domestic banks listed on the QE banks: – Four local (exclusively) Islamic banks The Government proposed to purchase the domestic equity March 2009 – portfolios of seven of the nine domestic QE-listed banks Six local conventional commercial banks – Seven foreign banks The Government purchased USD 2.7 bn worth of real estate – June 2009 One development bank financings and other exposures of Qatari banks • Total assets of QAR 1,654 bn (listed banks regulated by QCB) as at 31 The Government issued USD 16.4 bn worth of Sukuk and Mar 2020 with strong and sound regulatory environment 2010 & 2011 bonds to absorb excess liquidity in the Qatari banking sector – Minimum capital adequacy ratio of 14.5% including ICAAP charge and DSIB capital charge Funding provided to support the liquidity requirements in the – Maximum credit limit to single customer of 20% of a bank’s capital June 2017 banking system which was impacted due to withdrawal of funds by blockading countries and reserves Total Assets (Mar’20) – Listed Banks Total Financing and Deposits (Mar’20) – Listed Banks (QAR bn) (%) (QAR bn) Total Assets Assets - Market Share 600 70.0% Total Financing 1,050 70.0% 964 Total Deposits 60.0% 500 Market Share Financing 900 60.0% 50.0% Market Share Deposits 400 750 50.0% 706 708 40.0% 600 40.0% 300 30.0% 450 30.0% 200 20.0% 10.0% 300 20.0% 9.8% 9.9% 166 146 100 109 106 10.0% 150 10.0% 56 60 114 45 110 89 77 79 68 65 32 38 32 55 36 28 29 0 0.0% 0 0.0% QNB QIB CBQ Masraf Al Doha Al Khaliji QIIB Ahli Bank QNB QIB CBQ Masraf Doha Al Khaliji QIIB Ahli Rayan Bank Bank Al Bank Bank Bank Rayan Page | 8 Qatar Islamic Bank
Qatari Banking Sector – Continued Growth Assets (2) Bank Financings and Advances (2) QAR bn QAR bn 1400 1800 1200 1500 1000 1200 800 900 1,623 1,654 600 1,485 1,158 1,445 1,120 1,313 1,016 1,001 600 912 400 300 200 0 0 2016 2017 2018 2019 Mar-20 2016 2017 2018 2019 Mar-20 Source : Financial statements of the banks from Qatar Exchange) Source : Financial statements of the banks from Qatar Exchange Deposits (2) Prudential Regulatory Framework for Banks QAR bn Selected key bank regulations: Source: QCB, IMF Minimum capital adequacy ratio requirement for 2019 under 1200 Capital Basel III is 13.5% including ICAAP charge but excluding DSIB capital charge 1000 Reserve requirement of 4.5% of a bank’s total deposits to be Liquidity 800 kept with the QCB 600 Maximum financing to deposits (incl. LT debt) ratio of 90% (1) 1,109 1,083 976 988 and financing to real estate limited 150% of shareholder’s Financing 871 400 equity 200 Ownership Permitted foreigner ownership of up to 49% in listed banks 0 2016 2017 2018 2019 Mar-20 Risk reserves of min. 2.5% of total credit facilities in addition Provisioning to NPL provisioning depending on classification of financing Source : Financial statements of the banks from Qatar Exchange (1): As per the QCB’s calculation: (Total facilities – (Specific Provisions + Suspended Profit + Unearned Income) + Acceptances) / (Customer Deposits + Sukuk Issued) 2): Listed Qatari Banks – Qatar Exchange Page | 9 Qatar Islamic Bank
Agenda 1 Introduction 2 Operating Environment 3 QIB Business Review 4 QIB Financial Overview 5 Appendix Page | 10 Qatar Islamic Bank
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