Qatar Islamic Bank (Q.P.S.C.) Investor Presentation June 2019 - - PowerPoint PPT Presentation

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Qatar Islamic Bank (Q.P.S.C.) Investor Presentation June 2019 - - PowerPoint PPT Presentation

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Qatar Islamic Bank (Q.P.S.C.) Investor Presentation June 2019 Agenda 1 Introduction 2 Operating Environment 3 QIB Business Review 4 QIB Financial Overview 5 Appendix Page | 2 Qatar Islamic Bank Introduction Introduction Financial

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SLIDE 1

Qatar Islamic Bank (Q.P.S.C.)

Investor Presentation

June 2019

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SLIDE 2

Qatar Islamic Bank Page | 2

1

Introduction

2

Operating Environment

3

QIB Business Review

5

Appendix

4

QIB Financial Overview

Agenda

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SLIDE 3

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 176 ATMs and CDMs as at

30 Jun 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

  • f

QIB’s shareholders comprise prominent Qatari individuals, families and institutions.

QAR million

Jun-2019 Dec-2018 Dec-2017 Total Assets 154,590 153,232 150,375 Total Financing Assets 106,956 102,210 102,613 Total Deposits(2) 107,564 100,598 101,815 Shareholders Equity(3) 15,621 15,420 15,289 Total Equity 20,922 20,739 20,880 Net Profit(3) 1,425 2,755 2,405 Non-Performing Financing (1) (%) 1.2% 1.2% 1.2% Financing to Total Deposits(2) (%) 99.4% 101.6% 100.8% Capital Adequacy Ratio(4) (%) 18.5% 18.8% 17.3% Market Capitalisation 39,225 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 June 2019

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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 Ambitious transformation program Qatar-centric with selective international presence Strong domestic & international growth Strong Government support with the QIA as its largest shareholder Strong capital position & asset quality Maintained consistent profitability

Key Credit Strengths

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Qatar Islamic Bank Page | 5

1

Introduction

2

Operating Environment

3

QIB Business Review

5

Appendix

4

QIB Financial Overview

Agenda

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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

44 102 98 150 25 266 298 151 93 58 11 38 23 155 52 35 212 197 100 200 300 400 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 66 58 61 68 4% 4% 2% 2% 3%

0% 5% 10% 15% 20% 2014 2015 2016 2017 2018 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
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Qatar Islamic Bank Page | 7

3.4% 1.8% 2.7% 0.4% 3.7%

2014 2015 2016 2017 2018 (5%) (0%) 5%

206 162 152 167 188 51 57 71 90 101

2014 2015 2016 2017 2018 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

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 9 24.0% 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

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Qatar Islamic Bank Page | 8

Qatari Banking Sector – Robust Operating Environment

887 155 141 103 96 52 54 42

10.1% 0.0% 10.0% 20.0%

30.0% 40.0% 50.0% 60.0% 70.0% QNB QIB CBQ Masraf Al Rayan Doha Bank Al Khaliji Bank QIIB Ahli Bank 150 300 450 600 750 900 1,050 Total Assets Assets - Market Share 634 107 85 75 60 31 31 28 646 108 77 64 55 29 33 27 10.2% 10.4% 0% 10% 20% 30% 40% 50% 60% 70% QNB QIB CBQ Masraf Al Rayan Doha Bank Al Khaliji Bank QIIB Ahli Bank 100 200 300 400 500 600 700 Total Financing Total Deposits Market Share Financing Market Share Deposits (QAR bn) (%)

General Overview Total Assets (Jun’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 1,529 bn (listed banks regulated by QCB) as at 30

Jun 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 2008 QIA announced plans to acquire equity ownership interests

  • f up to 20% in domestic banks listed on the QE

March 2009 The Government proposed to purchase the domestic equity portfolios of seven of the nine domestic QE-listed banks June 2009 The Government purchased USD 2.7 bn worth of real estate financings and other exposures of Qatari banks 2010 & 2011 The 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 (Jun’19) – Listed Banks

(QAR bn)

Source: Financial statements of the banks from Qatar Exchange Doha Bank and Al Khaliji Bank numbers are as of Mar-19 Source: Financial statements of the banks from Qatar Exchange Doha Bank and Al Khaliji Bank numbers are as of Mar-19

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Qatar Islamic Bank Page | 9

Qatari Banking Sector – Continued Growth

750 912 1,001 1,016 1,052

2015 2016 2017 2018 Jun-19 200 400 600 800 1000 1200

650 871 976 988 1,039

2015 2016 2017 2018 Jun-19 200 400 600 800 1000 1200

QAR bn Selected key bank regulations: QAR bn

1,120 1,313 1,445 1,485 1,529

2015 2016 2017 2018 Jun-19 300 600 900 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 Liquidity Reserve 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 Provisioning Risk 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

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Qatar Islamic Bank Page | 10

1

Introduction

2

Operating Environment

3

QIB Business Review

5

Appendix

4

QIB Financial Overview

Agenda

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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%

  • wned 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

50.1% 30.0% 25.0% 39.9% 99.7% 99.99%

= Ownership

49.0%

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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

49.7% 34.0% 16.9%

  • 0.6%

40.1% 34.1% 20.1% 5.7%

Net Profit(1) QAR 1,425 Mln Net Operating Income(2) QAR 2,314 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 Banking Personal Banking

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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 Committee

Four members

  • Study, prepare and

develop strategies,

  • bjectives, policies,

systems, plans, budgets and work procedures

  • Monitor practices and

performance versus approved business standards, strategy and budgets Nomination & Remuneration Committee Three members

  • Select and evaluate

applicants for senior executive posts and provide recommendations to Board

  • Determine senior staff

rewards and privileges Zakat Committee Three 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 Committee Six 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
  • verall portfolio while reviewing

effectiveness of system to monitor compliance with laws/regulations

  • Oversight of internal and external

(including financials) audit processes

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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
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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

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Qatar Islamic Bank Page | 16

1

Introduction

2

Operating Environment

3

QIB Business Review

5

Appendix

4

QIB Financial Overview

Agenda

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Qatar Islamic Bank Page | 17

Profitability

  • Stable balance sheet growth total assets reached

QAR 154.6 bn with a growth of 0.9% in 2019 and 1.9% in 2018.

  • Financing assets reached QAR 107 bn in 2019

with a growth of 4.6% in 2019.

  • Strong

asset quality and prudent risk management policy NPF ratio at 1.2% and provision coverage ratio at 100%

  • Customer deposits reached QAR 107.6 bn in

2019.

  • Strong profitability with net profit at QAR 1,425

mn with a growth of 9.6% in 2019 vs.14.6% in 2018.

  • Robust net operating income at QAR 2,314 mn

with a growth of 2.6% in 2019 vs. 8.6% in 2018.

  • Operating

efficiency: Cost to income ratio improved to 23.5% in 2019 vs. 25.6% in 2018.

  • Adequately

capitalized the Basel III capital adequacy ratio stands at 18.5% as of June-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

Jun-19

Dec-18 Growth- 2019 Dec-17 Growth- 2018 Total Assets

154,590 153,232 0.9% 150,375 1.9%

Total Financing

106,956 102,210 4.6% 102,613

  • 0.4%

Total Deposits

107,564 100,598 6.9% 101,815

  • 1.2%

Investments(3)

35,241 33,273 5.9% 33,015 0.8%

Shareholders Equity(1)

15,621 15,420 1.3% 15,289 0.9%

Total Equity

20,922 20,739 0.9% 20,880

  • 0.7%

Financing to Deposit Ratio (%)

99% 102%

  • 2.2%

101% 0.8%

Capital Adequacy Ratio (%)

18.5% 18.8%

  • 0.3%

17.3% 1.5%

Provision Coverage Ratio (%)

100% 100% 0.0% 107%

  • 7.0%

QAR million

Q2-2019 Q2-2018 Growth 2018 2017 Growth

Net Operating Income(2)

2,314 2,255 2.6% 4,519 4,160 8.6%

Total expenses

(545) (577)

  • 5.6%

(1,161) (1,106) 5.0%

Total provisions

(394) (377) 4.6% (720) (785)

  • 8.4%

Net profit before tax & NCI

1,375 1,300 5.7% 2,638 2,269 16.3%

Net profit for the year(1)

1,425 1,325 7.5% 2,755 2,405 14.6%

Earnings Per Share (QAR)

0.60 0.56 7.5% 10.79 9.31 15.9%

Cost to income ratio

23.5% 25.6%

  • 2.1%

25.7% 26.6%

  • 0.9%

Cost of Risk

0.28% 0.27% 0.01% 0.49% 0.46% 0.03%

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Qatar Islamic Bank Page | 18

4% 2% 69% 21% 2% 2% Cash & Balances Due from Banks & Financial Institutions Financing Assets Financial Investments Other Investments Other Assets

Summary Steady Asset Growth (QAR bn) Asset Composition by Type (as at 30 Jun 2019) Asset Composition by Geography Type (as at 30 Jun 2019)

127.3 139.8 150.4 153.2 154.6

2015 2016 2017 2018 Jun-19

  • 40

80 120 160

Source: QIB financial statements

Continued Balance Sheet Growth

Strong balance sheet growth driven by growth in Qatar-focused financing

87% 1% 8% 1% 3%

Qatar GCC Europe North America Others

Continuous balance sheet growth

Growth driven by multiple products / asset classes

Primarily Qatar-centric exposures

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Qatar Islamic Bank Page | 19

Summary Balanced Financing Book (as at 30 Jun 2019) Financing – Key Growth Driver (QAR bn)

572 996 1209 1261 1317 645 864 1291 1261 1317 113% 87% 107% 100% 100% 0.7% 1.0% 1.2% 1.2% 1.2% 2015 2016 2017 2018 Jun-19 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 1,253 M as of Jun-2019

Strong Asset Quality and Provisioning

12% 7% 7% 12% 9% 4% 24% 23% 2%

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

87.5 98.2 102.6 102.2 107.0

2015 2016 2017 2018 Jun-19

  • 20

40 60 80 100 120

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Qatar Islamic Bank Page | 20

High-Quality Deposits(1) (as at 30 Jun 2019) Summary Diverse Sources of Funding (as at 30 Jun 2019)

14.2 14.1 16.6 15.4 16.0 77.3 81.3 85.2 85.2 91.6 91.5 95.4 101.8 100.6 107.6

2015 2016 2017 2018 Jun-19 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

11% 62% 10% 6% 8% 3%

15% 16% 69%

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, 84% Outside Qatar, 16% Inside Qatar Outside Qatar

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Qatar Islamic Bank Page | 21

33.3% 45.9% 43.2% 45.2% 47.3%

2015 2016 2017 2018 Jun-19

Summary Financing to Deposit Ratio(2) Supportive Liquid Assets Ratio(1)

41.3 31.4 21.1 60.8 74.6 39.5 12.7 5.4 (33.4) (8.1) 8.4 55.4 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% 99.4%

2015 2016 2017 2018 Jun-19

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 (QAR bn, as at 30 Jun 2019)

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

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Qatar Islamic Bank Page | 22

Summary Net financing margin(2) Robust Returns (%)

15.1% 15.0% 15.3% 17.4% 17.4% 1.7% 1.6% 1.6% 1.8% 1.8% 2015 2016 2017 2018 Jun-19

ROAE ROAA

Capital Adequacy Ratio(1)

3.1% 2.6% 3.1% 3.2% 3.3% 2015 2016 2017 2018 Jun-19

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% 18.5%

14.50% 11.7% 12.4% 13.2% 13.9% 13.6%

9.50%

2015 2016 2017 2018 Jun-19 Total Min CAR CET 1 Min CET 1

ROAE calculated after reducing the dividend for Sukuk Eligible as Additional Tier 1 Capital

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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 1,677 1,769 1,954 2,155 2,405 2,755 1,325 1,425

2015 2016 2017 2018 Jun-18 Jun-19 Pre-impairment Operating Profit² Net Profit³ 2,087 2,180 2,850 2,948 1,474 1,467 691 741 575 689 390 494 478 519 518 576 282 297 2015 2016 2017 2018 Jun-18 Jun-19 Income from Commission and Fees (net) Income from Investment Activities (net) Income from Financing Activities (net) 30.6% 29.8% 26.6% 25.7% 25.6% 23.5% 2015 2016 2017 2018 Jun-18 Jun-19

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

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Qatar Islamic Bank Page | 24

1

Introduction

2

Operating Environment

3

QIB Business Review

5

Appendix

4

QIB Financial Overview

Agenda

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Qatar Islamic Bank Page | 25

Consolidated Statement of Financial Position

QAR million Jun-2019 Dec-2018 Dec-2017 Cash and balances with central banks 5,733 7,299 5,546 Due from banks 3,348 6,424 4,876 Financing assets 106,956 102,210 102,613 Investment Securities 32,726 31,473 30,402 Investment in associates 568 568 669 Investment properties 1,946 1,231 1,944 Assets of a subsidiary held for sale

  • 246

Fixed assets 462 479 511 Intangible assets 396 386 411 Other assets 2,454 3,161 3,156 Total Assets 154,590 153,232 150,375 Due to banks 9,444 17,234 17,191 Customers’ current accounts 15,959 15,421 16,600 Sukuk financing 11,854 9,189 7,057 Other Liabilities 4,807 5,472 3,432 Total Liabilities 42,064 47,316 44,280 Equity of unrestricted investment account holders 91,604 85,177 85,214 Share capital 2,363 2,363 2,363 Legal reserve 6,370 6,370 6,370 Risk reserve 2,319 2,319 2,264 General reserve 82 82 82 Fair value reserve 86 154 170 Foreign currency translation reserve (322) (348) (137) Other reserves 217 217 217 Share-based payment reserve

  • 11

Retained earnings 4,508 4,263 3,949 Total equity attributable to shareholders of the bank 15,621 15,420 15,289 Sukuk eligible as additional capital 4,000 4,000 4,000 Non-controlling interests 1,301 1,319 1,591 Total equity 20,922 20,739 20,880 Total liabilities, equity of unrestricted investment account holders and equity 154,590 153,232 150,375

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Consolidated Statement of Income

QAR million Jun-2019 Jun-2018 Dec-2018 Dec-2017 Net income from financing activities 2,888 2,587.3

5,329

4,887 Net income from investing activities 494 390

689

575 Total income from financing and investing activities 3,382 2,977

6,018

5,462 Fee and commission income 379 359

732

658 Fee and commission expense (82) (77)

(156)

(141) Net fee and commission income 297 282

576

518 Net foreign exchange gain 34 106

259

139 Share of results of associates 3 (9)

(1)

36 Other income 19 11

47

44 Total Income 3,735 3,368

6,900

6,199 Staff costs (312) (321)

(653)

(622) Depreciation and amortization (41) (46)

(89)

(91) Sukuk holders’ share of profit (180) (113.0)

(255)

(218) Other expenses (192) (210)

(419)

(392) Total Expenses (725) (690)

(1,416)

(1,324) Net impairment losses on investment securities and properties (74) (111)

(238)

(306) Net impairment losses on financing assets (298) (266)

(505)

(475) Other impairment losses (23)

  • 23

(5) Net profit for the period before tax and URIA 2,616 2,300

4,764

4,090 Net return to unrestricted investment account holders (1,241) (1,000)

(2,125)

(1,819) Profit from a subsidiary held for sale

  • (2)

Net profit before tax 1,375 1,300

2,638

2,269 Tax expense 1 (9)

2

(18) Non-controlling interest 49 34

115

155 Profit Attributable to: Shareholder of the Bank 1,425 1,325

2,755

2,405

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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 Finance innovator” 2019

“Best Islamic Financial Institution - Sudan”

2019 “Best Project Islamic Finance Provider” 2019

“Best Islamic Financial Institution

  • 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 Islamic Bank in Qatar” By WUAB

2018

“One of the best Investor Relations websites”

2019

“Best Gift Card Product in Qatar” 2018 “Social Responsibility Award for Best Financial Institution”

2019

“Best Islamic Bank – Qatar”