Post on 04-Mar-2020
Qatar Islamic Bank (Q.P.S.C.)Investor PresentationDecember 2019
Qatar Islamic Bank Page | 2
1Introduction
2Operating Environment
3QIB Business Review
5Appendix
4QIB Financial Overview
Agenda
Qatar Islamic Bank Page | 3
QH (QIA), 16.7%
Others, 83.3%
Introduction Financial Snapshot
QIB’s Business Units
Shareholder structure / Strong Government Linkage
Qatar Islamic Bank (“QIB” or the “Bank”) was incorporated in 1982 as the
first Islamic financial institution in Qatar.
Largest Islamic bank (approximately 51% of total assets of listed Islamic
banks in Qatar) and second largest bank in Qatar by total assets,
financing assets and net profit.
Network of 30 branches and offices and over 181 ATMs and CDMs as at
30 Dec 2019.
Leading domestic franchise supported by selective international
footprint, with investments in the UK, Sudan and Lebanon.
Strong financial profile with continued growth in recent years and
robust risk management framework.
Rated A1 by Moody’s, A by Fitch, A+ by Capital Intelligence and A- by
S&P.
• QIB’s shares are listed on the
Qatar Stock Exchange.
• The Qatar Holding LLC (“QIA”)
is the single largest
shareholder of QIB.
• The balance of QIB’s
shareholders comprise prominent
Qatari individuals, families and
institutions.
QAR million Dec-19 Dec-2018 Dec-2017
Total Assets 163,519 153,232 150,375
Total Financing Assets 113,754 102,210 102,613
Total Deposits(2) 111,621 100,598 101,815
Shareholders Equity(3) 17,133 15,420 15,289
Total Equity 22,159 20,739 20,880
Net Profit(3) 3,055 2,755 2,405
Non-Performing Financing (1) (%) 1.2% 1.2% 1.2%
Financing to Total Deposits(2) (%) 101.9% 101.6% 100.8%
Capital Adequacy Ratio(4) (%) 19.5% 18.8% 17.3%
Market Capitalisation 36,224 35,917 22,920
Source: QIB financial statements
(1) As percentage of Total Net Financing Assets
(2) Customers’ Accounts + Unrestricted Investment Accounts
(3) Attributable to shareholders
(4) Ratio calculated as per Basel III guidelines in accordance with QCB regulations
94% of Net Operating Income & 99% of Net Profit (3)
Wholesale Banking
Group Function
Personal Banking
Subsidiaries
Introduction
Note: As at 30 Dec 2019
Qatar Islamic Bank Page | 4
First and largest
Islamic bank in Qatar
by total assets
Strong brand in Islamic
banking & innovative
product offering
Operates out of one of
the fastest growing
economies in the world
Second largest bank in
Qatar by total assets,
financing assets and
net profit
Higher operating
efficiencies
Ambitious
transformation
program
Qatar-centric with
selective international
presence
Strong Government
support with the QIA as
its largest shareholder
Strong capital position
& asset quality
Maintained consistent
profitability
Key Credit Strengths
Qatar Islamic Bank Page | 5
1Introduction
2Operating Environment
3QIB Business Review
5Appendix
4QIB Financial Overview
Agenda
Qatar Islamic Bank Page | 6
Overview of the State of Qatar (“Qatar”) One of the Largest Hydrocarbon Reserves in the World
Middle East
Ratings
Moody’s: Aa3/ Stable
S&P: AA-/ Stable
Fitch: AA-/ Stable
Nominal GDP (2018): QAR 685 bn
Per capita income (2018): QAR 246,859
Population (2018): 2.7mn
Qatar’s Credit Highlights Strong Wealth Generation
44102 98
150
25
266298
15193
58
11 38
23
155
5235
212
197
0
100
200
300
400
USA Kuwait UAE Iraq Qatar KSA Venezuela Iran Russia
Oil Gas
Total oil & gas reserves (bn boe)
Sources: Bloomberg, BP, IMF, JODI, MDPS, MoF, QCB and QNB Group forecasts
93
6658 61
71
4% 4%2% 2%
3%
0%
5%
10%
15%
20%
2014 2015 2016 2017 2018
0
10
20
30
40
50
60
70
80
90
100
GDP per capita (PPP US$ thousands) Real GDP growth rate (%)
Source: International Monetary Fund (IMF)
State of Qatar – Sustainable and Robust Growth Story…
Source: International Monetary Fund (IMF)
• Third largest gas reserves in the world(1) (~13% of world’s total) and
largest exporter of LNG
• Among world’s wealthiest economies with robust growth prospects
• Historically large surpluses in both fiscal and external accounts that
moved to fiscal deficit at manageable levels with the fall in oil prices. The
State is expected to post a surplus in the upcoming two years on the
back of higher oil prices.
• Low level of sovereign indebtedness with no external liquidity pressure
• Track record of prudent budgetary and financial policymaking
• Sovereign's financial strength is also underpinned by investment
holdings by the Qatar Investment Authority
• Stable political and attractive operational environment
Qatar Islamic Bank Page | 7
3.4%
1.8%2.7%
0.4% 0.2%
2014 2015 2016 2017 2018
(5%)
(0%)
5%
206162 152 167
192
51 57 71 90 93
2014 2015 2016 2017 2018
0
50
100
150
200
GDP Government debt
31.5
8.8
(7.2)(2.7)
6.8
15.3%
5.4%
-4.7%-1.6%
3.6%
(6%)
0%
6%
12%
18%
2014 2015 2016 2017 2018
-10
0
10
20
30
40
Surplus % of GDP
Fiscal Position Current Account Balance
Low Level of Indebtedness CPI Inflation (y-o-y)
Current account balance (USD bn and % of GDP)Fiscal surplus / deficit (USD bn and % of GDP)
49
14
-8
6 924.0%
8.5%
-5.5%3.8% 4.8%
(9%)
(1%)
7%
15%
23%
31%
2014 2015 2016 2017 2018-9
3
15
27
39
51
63
Surplus % of GDP
Nominal GDP vs. Government debt (USD bn)
Source: Qatar Central Bank annual report and International Monetary Fund (IMF)
Economic Indicators
Source: Qatar Central Bank annual report and International Monetary Fund (IMF)
Source: Qatar Central Bank annual report and International Monetary Fund (IMF) Source: Qatar Central Bank annual report
Qatar Islamic Bank Page | 8
Qatari Banking Sector – Robust Operating Environment
(QAR bn) (%)
General Overview
Total Assets (Sep’19) – Listed Banks
• Qatar Central Bank prohibits conventional banks from providing
Shari’a-compliant financing – the Qatari banking sector consists of 18
banks:
– Four local (exclusively) Islamic banks
– Six local conventional commercial banks
– Seven foreign banks
– One development bank
• Total assets of QAR 1,570 bn (listed banks regulated by QCB) as at 30
Sep 2019 with strong and sound regulatory environment
– Minimum capital adequacy ratio of 13.5% including ICAAP charge
but excluding DSIB capital charge
– Maximum credit limit to single customer of 20% of a bank’s capital
and reserves
The State of Qatar has been Supportive Throughout Crisis
October 2008QIA announced plans to acquire equity ownership interests
of up to 20% in domestic banks listed on the QE
March 2009The Government proposed to purchase the domestic equity
portfolios of seven of the nine domestic QE-listed banks
June 2009The Government purchased USD 2.7 bn worth of real estate
financings and other exposures of Qatari banks
2010 & 2011The Government issued USD 16.4 bn worth of Sukuk and
bonds to absorb excess liquidity in the Qatari banking sector
June 2017
Funding provided to support the liquidity requirements in the
banking system which was impacted due to withdrawal of
funds by blockading countries
Total Financing and Deposits (Sep’19) – Listed Banks
(QAR bn)
912
155 146 105 107
51 53 42
9.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
QNB QIB CBQ MasrafAl
Rayan
DohaBank
Al KhalijiBank
QIIB AhliBank
0
150
300
450
600
750
900
1,050
Total Assets Assets - Market Share
653
107 89 76 65 30 32 30
663
107 74 67 59 27 32 25
9.9%10.1%
0%
10%
20%
30%
40%
50%
60%
70%
QNB QIB CBQ Masraf AlRayan
DohaBank
Al KhalijiBank
QIIB Ahli Bank
0
100
200
300
400
500
600Total Financing
Total Deposits
Market Share Financing
Market Share Deposits
Qatar Islamic Bank Page | 9
Qatari Banking Sector – Continued Growth
750912 1,001 1,016 1,081
2015 2016 2017 2018 Sep-19
0
200
400
600
800
1000
1200
650
871976 988 1,054
2015 2016 2017 2018 Sep-19
0
200
400
600
800
1000
1200
QAR bn
Selected key bank regulations:QAR bn
1,1201,313 1,445 1,485 1,570
2015 2016 2017 2018 Sep-19
0
300
600
900
1200
1500
1800
QAR bn
Assets (2) Bank Financings and Advances (2)
Deposits (2) Prudential Regulatory Framework for Banks
(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
Source: QCB, IMF
Capital
Minimum capital adequacy ratio requirement for 2019 under
Basel III is 13.5% including ICAAP charge but excluding
DSIB capital charge
LiquidityReserve requirement of 4.5% of a bank’s total deposits to be
kept with the QCB
Financing
Maximum financing to deposits (incl. LT debt) ratio of 90%(1)
and financing to real estate limited 150% of shareholder’s
equity
Ownership Permitted foreigner ownership of up to 49% in listed banks
ProvisioningRisk reserves of min. 2.5% of total credit facilities in addition
to NPL provisioning depending on classification of financing
Source : Financial statements of the banks from Qatar Exchange) Source : Financial statements of the banks from Qatar Exchange
Source : Financial statements of the banks from Qatar Exchange
Qatar Islamic Bank Page | 10
1Introduction
2Operating Environment
3QIB Business Review
5Appendix
4QIB Financial Overview
Agenda
Qatar Islamic Bank Page | 11
Overview of QIB
Domestic Holdings
QIB’s Product and Geographic Diversification
International Holdings
While Qatar-based banking operations contributed over 89.1% of the Group’s Net Operating Income, QIB has expanded its platform over recent years
Investment Banking Financing Insurance
QIB listed on Qatar
Stock Exchange
2010: QIB launched USD 750 mn Sukuk
2011: Paid up capital increased to QAR 2,362 mn (USD 649 mn)
2012: Sukuk program of USD 1.5 bn was established
2013: Set up QIB Sudan
2014: Increased holding in QInvest to 50.13%
2015/2016 : Issued QAR 4 bln (USD 1.1 bn) of AT1 Sukuk
2017: Sukuk program size increased to USD 4 bn
2018: Sold stake in AFB
Arab Finance House
established in Beirut
(37% owned by QIB)
Al Jazeera Finance
established (30%
owned by QIB)
QIB established with
paid up capital QR
25mn (equivalent to
USD 6.9mn)
1982 1983 1989 1996 1998 2000 2003 2005 - 2009 2010 - 2019
First branch opened
for customers in July
1983
Paid up capital
increased to QR
200mn (USD 54.9mn
equivalent)
Aqar established
(49% owned by QIB)
2005: QIB branches at 8; paid up capital increased to USD 182mn
2007: Asian Finance Bank established (21% owned by QIB)
2006: QIB changed its identity; paid up capital increased to USD 327mn
2007: QInvest established (25% owned by QIB)
2008: QIB-UK established (60% owned by QIB)
2009: BEEMA established (25% owned by QIB)
Phase 1: Creation of the Bank Phase 2: Creation of a strong banking platform
Real Estate
58.17% 30.0% 25.0%
39.9%
99.7%
99.99%
= Ownership
49.0%
Qatar Islamic Bank Page | 12
Product / Services
• Deposits
• Current Accounts
• Credit Facilities
• Trade Finance
• Cash Management
• WPS
Segments
• Government Related Entities
• Financial Institutions
• Contracting & Real Estate
• Commercial
• Individual RE & General coverage
• Small & Medium Enterprises
• Cross border and Oil & Gas
47.7%
36.9%
14.8%
0.5%
38.5%
34.3%
21.2%
6.1%
Net Profit(1) QAR 3,055 Mln
Net Operating Income(2) QAR 4,830 Mln
Business Units Overview – Revenue & Profit Diversification
Treasury
• Sukuk and Local Equity
Investment Portfolio
• Treasury Services and Sales
• Liquidity Management
Investments
• Associates
Al Jazeera Finance
Beema (Al Damaan Islamic
Insurance)
• Real Estate & International
Investments
Product / Services
• Deposits
• Current Accounts
• Consumer Finance
• Cards
• Remittances
• Takaful
Segments
• Individuals
• Affluent
• HNWIs
Local Subsidiaries
• QInvest
• Aqar
• Durat-Al-Doha
International Subsidiaries
• QIB-UK
• Arab Finance House
(1) Net Profit : Net Profit Attributable to Equity Shareholders
(2) Net Operating Income : total income net of profit to unrestricted investment account holders and share of Sukuk holders profit + income from discontinued operations
Group Function Local & International
Subsidiaries
Corporate BankingPersonal Banking
Qatar Islamic Bank Page | 13
Board Committees
Director Designation
Mr. Abdullatif Bin Abdulla Al Mahmoud Vice Chairman
Sheikh Ali Bin Ghanim Bin Ali Al Thani Board Member
Mr. Mohamed Bin Issa Al Mohanadi Board Member
Mr. Abdul Rahman Abdulla Abdul Ghani Nasser Board Member
Mr. Mansour Mohamed A. Fattah Al Musleh Board Member
Sheikh Abdulla Bin Khaled Bin Thani Al Thani Board Member
Mr. Abdulla Bin Saeed Al Eidah Board Member
Mr. Nasser Rashid S. Al-Kaabi Board Member
Sheikh Jassim Bin Hamad Bin Jassim Bin Jaber Al Thani, Chairman of
the Board
Member of QIB Board of Directors since June 2004, and became
Chairman in April 2005. Graduated from Sandhurst Royal Military College
in the United Kingdom, and had a high level leadership training. He is
Chairman of QInvest - the first Islamic investment bank in Qatar,
Chairman of Milaha and Chairman of Beema (Daman Islamic insurance
company in Qatar). He is also a board member of Qatar Insurance
Company and other several financial and investment companies.
Board of Directors
Effective Board Oversight
QIB is committed to strong corporate governance practices, with its Board of Directors meeting at least six times a year
Policies & Procedures
CommitteeFour members
• Study, prepare and
develop strategies,
objectives, policies,
systems, plans,
budgets and work
procedures
• Monitor practices and
performance versus
approved business
standards, strategy and
budgets
Nomination &
Remuneration CommitteeThree members
• Select and evaluate
applicants for senior
executive posts and
provide
recommendations to
Board
• Determine senior staff
rewards and privileges
Zakat CommitteeThree members
• Promote
interdependence and
integration among
members of the Muslim
community by
channeling
contributions of Zakat
• Develop good
relationships with
charitable,
humanitarian aid
groups and institutions
and oversee QIB’s
Zakat
collection/disbursement
Executive CommitteeSix members
• Provision of ongoing information to the
Board on business developments and
regular review of business segments
• Advise on strategic decisions and
coordinate activities of all divisions and
subsidiaries
• Approve credit facilities and limits that
fall within authorities
Audit, Risk & Compliance Committee
Three members
• Review financial control, internal
control and risk management
framework & systems
• Establish risk appetite and monitor
overall portfolio while reviewing
effectiveness of system to monitor
compliance with laws/regulations
• Oversight of internal and external
(including financials) audit processes
Qatar Islamic Bank Page | 14
Gourang Hemani
Chief Financial Officer
• 27 years experience
• Indian
• Banque Saudi Fransi
• Standard Chartered
• PWC
Khalefa Al Mesalam
Human Capital
Constantinos Constantinides
Chief Strategy Officer
• 25 years experience
• Greek Cypriot
• Al Rajhi Bank
• Accenture
Rakesh Sanghvi
Chief Risk Officer
• 29 years experience
• Indian
• Ahli United Bank
• E&Y
Bassel Gamal
Group CEO
Dorai Anand
Personal Banking
• 25 years experience
• Indian
• Al Rajhi Bank
• Citi Bank
Tarek Youssef Fawzi
Wholesale Banking
• 36 years experience
• Egyptian
• Mashreq Bank
• Burgan Bank
• National Bank of Oman
Experienced Leadership
• 28 years experience
• Egyptian
• Ahli United Bank Group
• Chase National Bank
Lav Kataria
Chief Operating Officer
• 29 years experience
• Indian
• Citi Bank
• Barclays Bank
• 18 years experience
• Qatari
• HSBC
• Al Khaliji Bank
Qatar Islamic Bank Page | 15
The Shari’a Supervisory Board is primarily responsible for monitoring the
Bank’s operations compliance with the Islamic Shari’a principles and review
the processes and products presented. It acts as an independent body of
specialist jurists in Fiqh-Al-Muamalat. The Board is responsible for the
following:
Provide Islamic advice and guidance based on QIB's management
request.
Review Auditors’ Reports in compliance with Shari'a and report to
members about that subject.
Determine whether contracts, transactions and dealings presented to the
board complies with Shari’a.
Approve QIB marketing materials that is presented to the board.
Ensure with possible means that all earnings realized from sources or by
means prohibited by Shari’a are disposed of to charitable causes
His Eminence Sheikh Walid Bin Hadi
Chairman of Executive Committee
Prof. Abdul Sattar Abou Ghodda
Member
Dr. Mohamad Ahmaine
Member
Sharia’s Supervisory Board Members
Sharia’a Supervisory Board
QIB enjoys a strong Islamic heritage and has based its success on sound Sharia’a-compliant principles, under the supervision of an expert Shari’a Supervisory Board
Qatar Islamic Bank Page | 16
1Introduction
2Operating Environment
3QIB Business Review
5Appendix
4QIB Financial Overview
Agenda
Qatar Islamic Bank Page | 17
Profitability
• Stable balance sheet growth total assets reached
QAR 163.5 bn with a growth of 6.7% in 2019 and
1.9% in 2018.
• Financing assets reached QAR 113.8 bn in 2019
with a growth of 11.3% in 2019.
• Strong asset quality and prudent risk
management policy NPF ratio at 1.3% and
provision coverage ratio at 100%
• Customer deposits reached QAR 111.6 bn in 2019
with a growth of 11% in 2019.
• Strong profitability with net profit at QAR 3,055
mn with a growth of 10.9% in 2019 vs.14.6% in
2018.
• Robust net operating income at QAR 4,830 mn
with a growth of 7.3% in 2019 vs. 8.2% in 2018.
• Operating efficiency: Cost to income ratio
improved to 22.8% in 2019 vs. 25.4% in 2018.
• Adequately capitalized the Basel III capital
adequacy ratio stands at 19.5% as of Dec-2019
compared to 18.8% in Dec-2018, comfortably above
the minimum requirement of 14.5% including ICAAP
and DSIB charge.
Financial Overview
Financial Position Key Highlights
Source: QIB financial statements
(1) Attributable to shareholders of QIB
(2) Net Operating Income : total income net of profit to unrestricted investment account holders and share of Sukuk Holders’ Profit + income from discontinued operations
(3) Investments includes investments securities , investments in associates and investments properties
QAR million Dec-19 Dec-18Growth-
2019Dec-17
Growth-
2018
Total Assets 163,519 153,232 6.7% 150,375 1.9%
Total Financing 113,754 102,210 11.3% 102,613 -0.4%
Total Deposits 111,621 100,598 11.0% 101,815 -1.2%
Investments(3) 35,992 33,273 8.2% 33,015 0.8%
Shareholders Equity(1) 17,133 15,420 11.1% 15,289 0.9%
Total Equity 22,159 20,739 6.8% 20,880 -0.7%
Financing to Deposit Ratio (%) 102% 102% 0.3% 101% 0.8%
Capital Adequacy Ratio (%) 19.5% 18.8% 0.7% 17.3% 1.5%
Provision Coverage Ratio (%) 100% 100% 0.0% 107% -7.0%
QAR million 2019 2018 Growth 2018 2017 Growth
Net Operating Income(2) 4,830 4,502 7.3% 4,502 4,160 8.2%
Total expenses (1,101) (1,144) -3.8% (1,144) (1,106) 3.4%
Total provisions (733) (720) 1.9% (720) (785) -8.3%
Net profit before tax & NCI 2,996 2,638 13.5% 2,638 2,269 16.3%
Net profit for the year(1) 3,055 2,755 10.9% 2,755 2,405 14.6%
Earnings Per Share (QAR) 1.21 1.08 11.8% 1.08 0.93 16.1%
Cost to income ratio 22.8% 25.4% -2.6% 25.4% 26.6% -1.2%
Cost of Risk 0.55% 0.49% 0.05% 0.49% 0.46% 0.03%
Qatar Islamic Bank Page | 18
4%
2%
70%
20%
2% 2%
Cash & Balances
Due from Banks & FinancialInstitutions
Financing Assets
Financial Investments
Other Investments
Other Assets
Summary Steady Asset Growth (QAR bn)
Asset Composition by Type Asset Composition by Geography Type
127.3 139.8 150.4 153.2 163.5
2015 2016 2017 2018 2019
-
40
80
120
160
Source: QIB financial statements
Continued Balance Sheet Growth
Strong balance sheet growth driven by growth in Qatar-focused financing
90%
1%6%
1% 2%
Qatar
GCC
Europe
North America
Others
Continuous balance sheet growth
Growth driven by multiple products / asset classes
Primarily Qatar-centric exposures
Qatar Islamic Bank Page | 19
Summary
Balanced Financing Book
Financing – Key Growth Driver (QAR bn)
572
9961209 1261
1515
645864
1291 12611515
113%87%
107%
100% 100%
0.7%
1.0%
1.2%1.2%
1.3%
2015 2016 2017 2018 2019
Non-performing financing* Provisions + Suspended Profit***
Coverage Ratio Non-performing financing ratio**
Non-Performing Financing Assets (“NPF”, QAR mn)
Source: QIB financial statements
* Includes all financing assets overdue past 90 days
** Total non-performing financing / Total financing assets
*** Provision does not include IFRS 9 provisions of QAR 1,250 M as of Dec-2019
Strong Asset Quality and Provisioning
15%
6%
5%
11%
11%4%
21%
22%
5% Govt & GREs
NBFIs
Industry
Commercial
Services
Contracting
Real Estate
Personal
Others
Despite the strong growth, QIB has maintained very good asset quality and comfortable provisioning levels
Well-diversified & growing financing book
Strong asset quality and conservative provisioning
Reflective of robust risk management framework
87.598.2 102.6 102.2
113.8
2015 2016 2017 2018 2019
-
20
40
60
80
100
120
Qatar Islamic Bank Page | 20
High-Quality Deposits(1)
Summary Diverse Sources of Funding
14.2 14.1 16.6 15.4 15.0
77.3 81.3 85.2 85.2 96.6
91.5 95.4101.8 100.6
111.6
2015 2016 2017 2018 2019
Current accounts Unrestricted investment accounts
Strong Deposit(1) Growth (QAR bn)
Sound Funding Base Driven by Strong Deposit Growth
QIB’s growth has been enabled by its ability to source funding, primarily in the form of deposits
9%
61%
11%
9%
7%
3%
13%
15%
72%
Current Accounts
Call & Savings Accounts
Fixed Deposits
Ability to obtain funding from diverse sources
Loyal and diverse deposit base
Stable funding from sticky deposits
Source: QIB financial statements
(1) Customer’s current accounts and unrestricted investment accounts
(2) Unrestricted investment accounts includes call & savings accounts and fixed deposits
Inside Qatar, 83%
Outside Qatar, 17%
Inside Qatar
Outside Qatar
Qatar Islamic Bank Page | 21
33.3%
45.9%
43.2%45.2%
49.5%
2015 2016 2017 2018 2019
Summary Financing to Deposit Ratio(2)
Supportive Liquid Assets Ratio(1)
50.7
30.722.9
59.1
87.4
35.2
12.26.6
(36.6) (4.5)10.7
52.5
Up to 3 Months 3 Months - 1 Year 1-3 Years Over 3 Years
Assets Total Liabilities and Unrestricted Investments Maturity Gap
95.6%
102.9% 100.8% 101.6% 101.9%
2015 2016 2017 2018 2019
Financing to Deposit Ratio
Source: QIB financial statements, Management Accounts
(1) Liquid Assets : (Cash and Balances with Central Bank + Due from Banks + Financing Assets + Investments Securities ) all less than 1 year
(2) Total Deposits : Customer Current Accounts + Equity of Unrestricted Investment Account Holders
Asset Liability Management
Asset and Liability Management
QIB’s growth has been managed within a well-defined risk management framework
Financing to deposit ratio within agreeable regulatory
limits
Strong liquidity position to manage market stress
Overall conservative approach to risk management
Qatar Islamic Bank Page | 22
Summary
Net financing margin(2) Robust Returns (%)
15.1% 15.0% 15.3%17.4% 18.1%
1.7% 1.6% 1.6%1.8%
2.0%
2015 2016 2017 2018 2019
ROAE ROAA
Capital Adequacy Ratio(1)
3.1%2.6%
3.1% 3.2% 3.0%
2015 2016 2017 2018 2019
Source: QIB financial statements
(1) From 2014 onwards capital adequacy is as per Basel III guidelines. Previous years are as per Basel II
(2) Net financing margin = (Income from financing activities, net – Unrestricted investment account holders’ share of profit ) / (Net Average Financing Assets)
Strong Capitalization & Continued Profitability
QIB boasts an ideal platform for future growth, including strong capitalization and supportive margins/returns
Capital ratios well above regulatory requirements
Stable return on equity
Healthy return on assets
14.1%
16.7% 17.3%18.8% 19.5%
14.50%
11.7% 12.4% 13.2% 13.9%14.7%
9.50%
2015 2016 2017 2018 2019
Total Min CAR CET 1 Min CET 1
ROAE calculated after reducing the dividend for Sukuk Eligible as Additional Tier 1 Capital
Qatar Islamic Bank Page | 23
Summary
Overview of Profitability (QAR mn) Operating Efficiency (Cost to Income Ratio, %)
Revenue(1) Breakdown (QAR mn)
2,372 2,569
3,054 3,358
3,729
1,954 2,155
2,405 2,755
3,055
2015 2016 2017 2018 2019
Pre-impairment Operating Profit² Net Profit³
2,087 2,1802,850 2,948 2,959
691 741
575 673 1,063478 519
518 576693
2015 2016 2017 2018 2019
Income from Commission and Fees (net) Income from Investment Activities (net)Income from Financing Activities (net)
30.6%29.8%
26.6%25.4%
22.8%
2015 2016 2017 2018 2019
Source: QIB financial statements
(1) Income from Financing Activities (net) : Net of profit to unrestricted investment account holders and share of Sukuk Holders’ profit
(2) Pre-Impairment Operating Profit : Total Income + Income from discontinued operations – Sukuk Holders’ Share of Profit - Unrestricted investment account holders’ share of profit – General and administrative
expenses – Depreciation and amortization
(3) Net Profit for the year attributable to shareholders
Stable and Diversified Earnings Profile
QIB has remained profitable even during the global financial crisis
Recurring financing and investing revenues
Continued profitability during crisis
Cost base effectively managed
Qatar Islamic Bank Page | 24
1Introduction
2Operating Environment
3QIB Business Review
5Appendix
4QIB Financial Overview
Agenda
Qatar Islamic Bank Page | 25
Consolidated Statement of Financial Position
QAR million Dec-2019 Dec-2018 Dec-2017
Cash and balances with central banks 7,403 7,299 5,546
Due from banks 3,552 6,424 4,876
Financing assets 113,754 102,210 102,613
Investment Securities 33,272 31,473 30,402
Investment in associates 545 568 669
Investment properties 2,175 1,231 1,944
Assets of a subsidiary held for sale - - 246
Fixed assets 452 479 511
Intangible assets 400 386 411
Other assets 1,966 3,161 3,156
Total Assets 163,519 153,232 150,375
Due to banks 14,355 17,234 17,191
Customers’ current accounts 14,979 15,421 16,600
Sukuk financing 10,934 9,189 7,057
Other Liabilities 4,450 5,472 3,432
Total Liabilities 44,718 47,316 44,280
Equity of unrestricted investment account holders 96,641 85,177 85,214
Share capital 2,363 2,363 2,363
Legal reserve 6,370 6,370 6,370
Risk reserve 2,380 2,319 2,264
General reserve 82 82 82
Fair value reserve 242 154 170
Foreign currency translation reserve (316) (348) (137)
Other reserves 217 217 217
Share-based payment reserve - - 11
Retained earnings 5,795 4,263 3,949
Total equity attributable to shareholders of the bank 17,133 15,420 15,289
Sukuk eligible as additional capital 4,000 4,000 4,000
Non-controlling interests 1,026 1,319 1,591
Total Equity 22,159 20,739 20,880
Total liabilities, URIA and Equity 163,519 153,232 150,375
Qatar Islamic Bank Page | 26
Consolidated Statement of Income
QAR million Dec-2019 Dec-2018 Dec-2017
Net income from financing activities 5,867 5,329 4,887
Net income from investing activities 1,063 673 575
Total income from financing and investing activities 6,930 6,001 5,462
Fee and commission income 869 732 658
Fee and commission expense (176) (156) (141)
Net fee and commission income 693 576 518
Net foreign exchange gain 59 259 139
Share of results of associates (1) (1) 36
Other income 58 47 44
Total Income 7,738 6,883 6,199
Staff costs (640) (653) (622)
Depreciation and amortization (83) (89) (91)
Sukuk holders’ share of profit (376) (255) (218)
Other expenses (377) (402) (392)
Total Expenses (1,477) (1,400) (1,324)
Net impairment losses on investment securities and properties(94) (238) (306)
Net impairment losses on financing assets (624) (505) (475)
Other impairment losses (15) 23 (5)
Net profit for the period before tax and URIA 5,528 4,764 4,090
Net return to unrestricted investment account holders (2,532) (2,125) (1,819)
Profit from a subsidiary held for sale - - (2)
Net profit before tax 2,996 2,638 2,269
Tax expense (11) 2 (18)
Non-controlling interest 71 115 155
Profit Attributable to: Shareholder of the Bank 3,055 2,755 2,405
Qatar Islamic Bank Page | 27
QIB Award Winning Organization
2019
“Qatar's Best Bank”
2019
“Best Islamic Bank – Middle East”
2019
“Best Islamic Bank – UK”
2019
“CEO Leadership Achievement
Award”By Asian Banker
2019
“Best Managed Bank in Qatar”
By Asian Banker
2019
“Best Islamic Bank – Qatar”
2019
“Islamic Bank of the Year, Qatar”
By Asset Magazine
2019
“Best Islamic Retail Bank, Qatar”
By Asset Magazine
2019
“Best Retail Mobile Banking
Experience”
2019
“Best Digital Bank”
20192019
2019
“Best Islamic Finance
innovator”2019
“Best Islamic Financial Institution -
Sudan”
2019
“Best Project Islamic Finance
Provider”
2019
“Best Islamic Financial
Institution - Qatar”
2019
“ Best Digital Bank Award 2019”
2019
Best Social Media Marketing and
Services
“Best Islamic Bank in Qatar”By WUAB
“Best Islamic Bank”