International credit rating agency Capital Intelligence (CI) has affirmed the long-term foreign currency and short term foreign currency ratings of Qatar Islamic Bank (QIB) at ‘A+’ and ‘A1’ respectively, with stable outlook.
In a report CI said, “The rating is supported by strong asset quality, strong profitability at both the operating and net levels, and strong capitalisation. Non-financial supporting factors include a strong franchise and market position as the leading Islamic bank in Qatar and as the second largest bank in the system.
“QIB’s profitability is strong, and earnings quality is good, and it has been posting consistent results. Its profitability was better than sector average, supported by its broadly stable net financing margins, which has remained above average, and continued efficiency gains with cost-income ratio on a declining trend, having reached what is a low level by international standards.”
The report continued, "QIB’s asset quality is solid and stable, while credit loss absorption capacity is strong. The non-performing financing (NPF) ratio was moderate and maintained at just close to one percent, much better than its peers. The bank remains more than fully covered in terms of financing loss reserves. QIB is strongly capitalised – and the quality of capital is good. QIB has a good liquidity profile. It is largely funded by customer deposits, mainly by diversified and stable retail deposits with its dependence on foreign funding being relatively low.”
CI expects QIB “to be able to weather the impact of the Covid-19 outbreak” given its solid pre-crisis financial fundamentals and the willingness and ability of the authorities to support the banking sector and wider economy.
The Qatar Central Bank has announced that it will provide additional liquidity to banks operating in the country if needed.
“The stable outlook reflects CI’s expectation that the bank’s asset quality and capitalisation will remain strong, its franchise and market position strong, and its funding and liquidity relatively unchanged over the next 12 months,” the report noted.
QIB’s Group CEO Bassel Gamal said, “We are pleased with the affirmation of our rating by Capital Intelligence. The rating displays the strong fundamentals of the Qatari economy, the success of our focused business strategy, our disciplined execution capabilities as well as the effective application of our conservative risk management framework.”
He added, “The last financial year was another challenging year for global economies, but at QIB we managed to turn it into a good year. We registered increasing growth rates for the seventh consecutive year and delivered a record performance. We continued to make strong progress on our digital transformation program and kept investing in talent.
“Despite the challenges the last year had to offer, through the successful implementation of the bank’s business strategy, we continued to flourish; reflecting a strong performance across all divisions. Given the current circumstances in the market, looking ahead we do expect some pressure on asset quality and profit growth but given our historical conservative approach, we expect it to be manageable.”
QIB has demonstrated steady financial growth over the past years and has been setting a benchmark for Islamic banks in the region with its embrace of cutting-edge banking technologies, and its customer-centric approach to both its product offering and the overall banking experience.
Established in 1982, QIB was the first Islamic bank in Qatar. Today, it is the second largest bank, and largest Islamic bank in the country, with a market share of about 11% in terms of total assets and 40% of Islamic assets as of December 2019.
“QIB’s profitability is strong, and earnings quality is good, and it has been posting consistent results. Its profitability was better than sector average, supported by its broadly stable net financing margins, which has remained above average, and continued efficiency gains with cost-income ratio on a declining trend, having reached what is a low level by international standards.”
The report continued, "QIB’s asset quality is solid and stable, while credit loss absorption capacity is strong. The non-performing financing (NPF) ratio was moderate and maintained at just close to one percent, much better than its peers. The bank remains more than fully covered in terms of financing loss reserves. QIB is strongly capitalised – and the quality of capital is good. QIB has a good liquidity profile. It is largely funded by customer deposits, mainly by diversified and stable retail deposits with its dependence on foreign funding being relatively low.”
CI expects QIB “to be able to weather the impact of the Covid-19 outbreak” given its solid pre-crisis financial fundamentals and the willingness and ability of the authorities to support the banking sector and wider economy.
The Qatar Central Bank has announced that it will provide additional liquidity to banks operating in the country if needed.
“The stable outlook reflects CI’s expectation that the bank’s asset quality and capitalisation will remain strong, its franchise and market position strong, and its funding and liquidity relatively unchanged over the next 12 months,” the report noted.
QIB’s Group CEO Bassel Gamal said, “We are pleased with the affirmation of our rating by Capital Intelligence. The rating displays the strong fundamentals of the Qatari economy, the success of our focused business strategy, our disciplined execution capabilities as well as the effective application of our conservative risk management framework.”
He added, “The last financial year was another challenging year for global economies, but at QIB we managed to turn it into a good year. We registered increasing growth rates for the seventh consecutive year and delivered a record performance. We continued to make strong progress on our digital transformation program and kept investing in talent.
“Despite the challenges the last year had to offer, through the successful implementation of the bank’s business strategy, we continued to flourish; reflecting a strong performance across all divisions. Given the current circumstances in the market, looking ahead we do expect some pressure on asset quality and profit growth but given our historical conservative approach, we expect it to be manageable.”
QIB has demonstrated steady financial growth over the past years and has been setting a benchmark for Islamic banks in the region with its embrace of cutting-edge banking technologies, and its customer-centric approach to both its product offering and the overall banking experience.
Established in 1982, QIB was the first Islamic bank in Qatar. Today, it is the second largest bank, and largest Islamic bank in the country, with a market share of about 11% in terms of total assets and 40% of Islamic assets as of December 2019.
