THE COMMERCIAL BANK (P.S.Q.C.) Investor Presentation September 2020
Disclaimer • This presentation and subsequent discussion may contain certain forward-looking statements with respect to certain plans and current goals and expectations of Commercial Bank and its associated companies relating to their future financial condition and performance. These forward-looking statements do not relate only to historical or current facts but also represent Commercial Bank’s expectations and beliefs concerning future events. By their nature forward-looking statements involve known and unknown risks and uncertainty because they relate to future events and circumstances including a number of factors which are beyond Commercial Bank’s control. As a result, Commercial Bank’s actual future results or performance may differ materially from the plans, goals and expectations expressed or implied in such statements. • Any forward-looking statements made by or on behalf of Commercial Bank speak only as of the date they are made. Commercial Bank does not undertake to update forward-looking statements to reflect any changes in Commercial Bank’s expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. 2
Presenting Team Mr. Joseph Abraham Mr. Parvez Khan Mr. Rehan Khan Group Chief Executive Officer EGM, Treasury and Investments Chief Financial Officer & Strategy 3
Table of Contents QATAR IN PERSPECTIVE COMMERCIAL BANK: SUMMARY HIGHLIGHTS CONSOLIDATED FINANCIAL HIGHLIGHTS & PERFORMANCE STANDALONE FINANCIAL PERFORMANCE APPENDIX: USD CONVERSION 4
Qatar in Perspective – A Resilient and Well Diversified Economy… Sovereign Rating: Aa3 / AA- / AA- ( Moody’s / S&P / Fitch) Attractive Economic Growth High GDP per Capita (2019F GDP per Capita, US$ ‘000) Consistently among world’s top 3 economies in 10.2% 69.7 terms of GDP per capita since 2011 4.8% 4.4% 4.0% 37.7 3.8% 3.7% 29.3 25.3 1.2% 22.9 1.1% 1.1% 0.9% 0.7% 17.8 -0.9% Qatar UAE Saudi Kuwait Bahrain Oman Arabia Qatar UAE Kuwait Bahrain KSA Oman Average annual real GDP Growth 2000-16 2017-2019 Deep Natural Resources Well Diversified Economy, Positioned for Further Improvement Qatar gas reserves are forecasted to last for at 842 70% 68% least another 130 years 65% 63% 63% 48% 320 215 63 31 7 2014A 2015A 2016A 2017A 2018E 2019F Qatar Saudi Arabia UAE Kuwait Oman Bahrain Nominal Nonhydrocarbon Share of Overall GDP (%) Gas Reserves, 2019E, Trillions of Cubic Feet Source: International Monetary Fund, Qatar Country Report; Oxford Economics; EIA (US Energy Information Administration). 5
…With a Stable Business Environment, Supportive of Foreign Investments Fiscal Breakeven Oil Price (US$) – 2019 Current Account Balance (% of GDP) – 2019 8.9% 7.4% 6.3% 106 93 2.4% 83 67 53 45 (2.9%) (5.2%) Iran Iraq Kuwait UAE Saudi Qatar Bahrain Oman Qatar Kuwait UAE Saudi Oman Bahrain Arabia Arabia Kuwait Saudi General Government Fiscal Balance Qatar Highly Competitive Business-friendly Framework UAE Arabia (% of GDP) – 2019 (2019 Global Competitiveness Report) Qatar Oman #53 #46 #45 4.8% 4.1% #36 Yemen #25 #29 (0.8%) (4.5%) (7.0%) (10.6%) Kuwait Qatar UAE Saudi Oman Bahrain UAE Qatar Saudi Bahrain Kuwait Oman Arabia Arabia Source: International Monetary Fund, Regional Economic Outlook: Middle East and Central Asia Update; World Economic Forum, The Global Competitiveness Report. 6
Qatar Has a Robustly Regulated Banking Sector Benefitting from Strong Government Support Loan Book & Customer Deposit Growth ($bn) Qatari Banks Enjoy Strong Government Support % Owned by Qatar Investment Authority and Government related vehicles 52% 17% 293 285 258 250 230 243 226 223 233 206 200 17% 48% 179 179 165 17% 17% 25% 48% 2014 2015 2016 2017 2018 2019 H1 2020 Loans Deposits Commercial Bank Shareholding profile (30 th June 2020) Strong Prudential Regulatory Framework Minimum Basel III CAR 14.00% (2) Capital QCB reserve requirement 4.5% of total deposits Liquidity Foreign Max. financing to deposits ratio 100% Nationals Financing Financing to real estate limit: 150% of shareholder’s equity and Tier 19% Qatari 1 capital Nationals Permitted foreigner ownership up to 49% in listed banks Ownership 81% Risk reserves to be maintained at 2.5% of net loans and advances in Provisioning addition to ECL per IFRS 9 Source: Qatar Central Bank, Qatar Exchange, Companies websites and Bloomberg. 1. CAGR calculated from 31 December 2014 to 30 June 2020 2. 14.00% includes an ICAAP buffer of 1%. 7
Historical Government Support for the Banking Sector 1 Capital Injection Announcement Acquisition of Equity Portfolios 5 Dividend Waiver 3 Waiver of the dividend payable to the In March 2009 the Qatari Government Qatari Government for the year end 2009 In October 2008 the Qatar Investment purchased the domestic equity portfolios of Authority announced its plan to acquire seven of the nine domestic banks listed on equity ownership interest between 10% 7 the Qatar Exchange and 20% in all domestic banks listed on the Injection of Post blockade liquidity Qatar Exchange Injection of liquidity and USD post blockade to stabilise banking system October November December January February March April May June January February March February June 2008 2008 2008 2009 2009 2009 2009 2009 2009 2010 2010 2010 2011 2017 First Capital Injection Acquisition of Real Estate Portfolios Final Tranche of Direct Capital Injection 2 4 6 The Qatar Investment Authority completed In June 2009 the Qatari Government A number of Qatari Banks received the final the first stage of the subscription process in announced that it would purchase the and third tranche of capital injection from CB’s share capital by investing QAR807m, portfolios of real estate loans and other the Qatar Investment Authority as part of representing 5% of CB’s share capital and exposures of commercial banks listed on the Government’s initial plan to increase its further strengthening the Capital base the Qatar Exchange, for their net stake in all domestic banks listed on the book values Qatar Exchange QIA subsequently transferred its shares to Qatar Holdings 8
QATAR IN PERSPECTIVE COMMERCIAL BANK: SUMMARY HIGHLIGHTS CONSOLIDATED FINANCIAL HIGHLIGHTS & PERFORMANCE STANDALONE FINANCIAL PERFORMANCE APPENDIX: USD CONVERSION 9
Commercial Bank Group Overview The Commercial Bank Q.S.C. Strong and Supportive Shareholding Structure (2) Established in 1975, Commercial Bank is Qatar’s 2 nd largest conventional Foreign bank by assets, net loans, customers’ deposits and total equity Enjoys a 7.6% (1) market share of loans and 7.0% (1) market share of deposits Nationals in Qatar 19.3% Operates a network of 29 branches in Qatar and is present in Turkey, Oman and UAE through its subsidiaries and associates Alternatifbank, National Qatar Bank of Oman (“NBO”) and United Arab Bank (“UAB” ) Holding Strong capitalization with Basel III capital adequacy ratio of 17.3% (1) Qatar Focus on sustainable controlled growth in its core business, proactive 16.8% Nationals management of risk, liquidity and capital and continuing improvement in the 63.9% quality of its service to customers In the long term, expansion strategy is a blend of strong organic growth in Qatar and international expansion through banking alliances ...That Has Been Evolving Over Time – Financial Assets A Diversified Geographical Footprint... (QAR billion) 133.8 Alternatifbank CB 127.5 123.1 119.2 Turkey 5% 113.2 6% 5% Ownership 100.0% (1) # Branches 29 (1) 9% 5% 18% 17% 16% # Branches 49 (1) 18% 19% 1% 2% 1% 5% 5% Qatar UAB NBO 77% 75% 78% 68% UAE 71% Ownership 40.0% (1) Oman Ownership 34.9% (1) # Branches 8 (1) # Branches 60 (1) 2015 2016 2017 2018 2019 Qatar Other GCC Other Middle East Rest of the World 1. As of June 30, 2020 2. Source: Qatar Exchange, as of 30 th June 2020 10
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