Fitch Ratings has affirmed Qatar Islamic Bank’s Long-Term Issuer Default Rating (IDR) at 'A' with a stable outlook.
Fitch has also reaffirmed QIB's Viability Rating (VR) at 'bbb'.
In its Rating Action Commentary, Fitch Ratings said, “QIB's VR reflects the bank's strong company profile, which is underpinned by its leading domestic Islamic banking franchise. QIB is the oldest and largest Islamic bank in Qatar, accounting for about half of the total Islamic banking assets. QIB holds 10% of total domestic banking assets (making it Qatar’s second-largest bank) and 13% of deposits at end-June 2020. QIB's strong local deposit franchise results in a high proportion of retail depositors. The VR also reflects the bank's solid profitability, adequate core capitalisation, and sound asset quality, which is balanced against high financing concentration.
“Asset-quality metrics compare well with peers. The bank's impaired financing ratio has marginally increased since 2018 to 1.4% at end-H1,2020. Total financing loss allowances covered impaired financings by over 200% at end-H1,2020, which is conservative in our view.”
"On QIB’s profitability, the Fitch report said, “QIB's profitability is superior to peers given its strong domestic franchise, which supports financing growth and attracts cheap retail deposits, which ensures a lower cost of funding compared to peers. Profitability is also supported by relatively low financing impairment charges, given sound asset quality, and well managed costs”.
On the latest rating, QIB’s Group chief executive officer Bassel Gamal said, “The affirmation of our ratings, despite the current global challenges, confirm the strong financial position of Qatar, the banking sector outlook and QIB’s financial vigour, which has been steadily improving in line with our long term objectives. It is a confirmation of QIB’s stability, sustainable business model, high asset quality and robust capital position.”
“We will remain committed to the highest work standards, and we will continue implementing our long-term business strategy with a continued focus to contribute to the growth of the local economy, while always being ready to navigate any potential challenges,” Gamal added.
QIB posted a net profit of QR2.21bn for the nine months’ period that ended in September, in line with the performance during the same period in 2019.
In its Rating Action Commentary, Fitch Ratings said, “QIB's VR reflects the bank's strong company profile, which is underpinned by its leading domestic Islamic banking franchise. QIB is the oldest and largest Islamic bank in Qatar, accounting for about half of the total Islamic banking assets. QIB holds 10% of total domestic banking assets (making it Qatar’s second-largest bank) and 13% of deposits at end-June 2020. QIB's strong local deposit franchise results in a high proportion of retail depositors. The VR also reflects the bank's solid profitability, adequate core capitalisation, and sound asset quality, which is balanced against high financing concentration.
“Asset-quality metrics compare well with peers. The bank's impaired financing ratio has marginally increased since 2018 to 1.4% at end-H1,2020. Total financing loss allowances covered impaired financings by over 200% at end-H1,2020, which is conservative in our view.”
"On QIB’s profitability, the Fitch report said, “QIB's profitability is superior to peers given its strong domestic franchise, which supports financing growth and attracts cheap retail deposits, which ensures a lower cost of funding compared to peers. Profitability is also supported by relatively low financing impairment charges, given sound asset quality, and well managed costs”.
On the latest rating, QIB’s Group chief executive officer Bassel Gamal said, “The affirmation of our ratings, despite the current global challenges, confirm the strong financial position of Qatar, the banking sector outlook and QIB’s financial vigour, which has been steadily improving in line with our long term objectives. It is a confirmation of QIB’s stability, sustainable business model, high asset quality and robust capital position.”
“We will remain committed to the highest work standards, and we will continue implementing our long-term business strategy with a continued focus to contribute to the growth of the local economy, while always being ready to navigate any potential challenges,” Gamal added.
QIB posted a net profit of QR2.21bn for the nine months’ period that ended in September, in line with the performance during the same period in 2019.