CI rating confirms QIB’s robust financial position in Qatar, says Group CEO
April 07 2021 07:42 PM

The reaffirmation of Qatar Islamic Bank’s (QIB) ratings by international credit rating agency Capital Intelligence (CI) confirms QIB’s strong financial position in Qatar, its banking sector, and its vigour, which has been steadily improving in line with the bank’s long-term strategies and objectives, QIB Group CEO Bassel Gamal has said.
Gamal said: “CI’s reaffirmations of our ratings is a testament of QIB’s stability, sustainable business model, high asset quality, and robust capital position. We will remain committed to the highest working standards, and we will continue to implement 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.”
Only recently, CI affirmed the Long-Term Foreign Currency and Short-Term Foreign Currency ratings of QIB at ‘A+’ and ‘A1’ respectively, with a stable outlook. CI’s Credit Rating Report reaffirmed that QIB continues to enjoy a strong franchise and market position as the largest Islamic bank in Qatar, with good liquidity and funding profile.
The report also stated that QIB continues to have robust capitalisation in a well-capitalised Qatari banking system, in addition to having solid and stable asset quality with strong loss absorption capacity, and strong and consistent profitability. On QIB’s stable outlook, the report stated that CI does not consider a change in either rating likely in the next 12 months.
In its Credit Rating Report, CI added: “QIB’s asset quality is solid and stable, while credit loss absorption capacity is strong. The non-performing financing (NPF) ratio remained moderate over the last six years, and among the lowest of its peer group.”
The report also said QIB’s profitability is strong and its earnings quality is good, with the bank posting consistent results. CI added that QIB’s profitability was better than sector average, supported by the bank’s broadly stable net financing margins (NFMs), which remained above average, and continued efficiency gains.
The report also highlighted that QIB has a good liquidity profile, largely funded by customer deposits, mainly by diversified and stable retail deposits, and with dependence on foreign funding relatively low, the proportion of non-deposit funding is lower than peer banks in Qatar.
On QIB’s strong capitalisation and quality of capital, the report said: “The bank is better than its peer group in terms of capital ratios in what is a well-capitalised Qatar banking system. In addition, QIB’s total equity to total assets ratio (balance sheet leverage) is also better than its peers.
“QIB’s CET-1 ratio is well above the minimum requirement of the Qatar Central Bank (QCB), based on international standards (Basel III), while its CAR comfortably exceeds the QCB floor for total capital, including conservation buffer, D-SIB buffer and ICAAP Pillar II capital charge."
Also rated ‘A1’, ‘A-/A-2’ and ‘A’ by Moody’s, S&P and Fitch with stable outlooks, QIB has achieved positive financial results for the year 2020. The bank has achieved a net profit of QR3.065bn in 2020 compared to QR3.055bn in 2019, despite the impact of Covid-19 and the decline in oil prices.
The bank maintained the basic earnings per share at QR1.21. Total assets of the bank has increased by 6.6% compared to 2019 and now stands at QR174.4bn driven by a growth in the core banking activities.
Financing activities registered a robust growth by 4.7% over 2019 to reach QR119.1bn. Customer deposits of the bank now stand at QR118.1bn registering a growth of 5.8% compared to December 2019.
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