Qatar Islamic Bank (Q.P.S.C.) Q2 2020 Results Presentation - - PowerPoint PPT Presentation

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Qatar Islamic Bank (Q.P.S.C.) Q2 2020 Results Presentation - - PowerPoint PPT Presentation

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Qatar Islamic Bank (Q.P.S.C.) Q2 2020 Results Presentation Disclaimer Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the condensed consolidated financial statements.

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

Q2 2020 Results Presentation

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Qatar Islamic Bank Page | 2

Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the condensed consolidated financial statements. The information contained herein has been prepared by Qatar Islamic Bank Q.P.S.C (“QIB”). QIB relies on information

  • btained from sources believed to be reliable but does not guarantee its accuracy or completeness.

This presentation has been prepared for information purposes only and is not and does not form part of any offer for sale

  • r solicitation of any offer to subscribe for or purchase or sell any securities nor shall it or any part of it form the basis of or

be relied on in connection with any contract or commitment whatsoever. Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of QIB. These forward-looking statements include all matters that are not historical facts. The inclusion of such forward-looking information shall not be regarded as a representation by QIB or any

  • ther person that the objectives or plans of QIB will be achieved. QIB undertakes no obligation to publicly update or

publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise. Please note that rounding differences may appear throughout the presentation.

Disclaimer

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Qatar Islamic Bank Page | 3

1

Introduction

2

QIB Financial Overview

3

Appendix

Agenda

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Qatar Islamic Bank Page | 4

 Qatar Islamic Bank (“QIB” or the “Bank”) was incorporated in 1982 as the first Islamic financial institution in Qatar.  Largest Islamic bank (approximately 50% 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 23 branches and offices and over 176 ATMs and CDMs in Qatar as at 30 Jun 2020.  Leading domestic franchise supported by selective international footprint in the United Kingdom, Sudan and Lebanon.  Strong financial profile with continued growth in recent years and robust risk management framework.

Introduction

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Qatar Islamic Bank Page | 5 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 Strengths

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Qatar Islamic Bank Page | 6

Share Overview

 QIB shares listed on the Qatar Stock Exchange  Symbol : QIBK, ISIN: QA0006929853  Foreign Ownership Limit : 49%  Market cap : QAR 37.2 bn  Valuation multiples: P/E – 13.13 ; P/B – 1.72

Share Profile and Credit Ratings

Index Weight Qatar Exchange General Index 14.73% Qatar Exchange All Shares 10.52% MSCI Emerging Index 0.10% FTSE Emerging Index 0.09%

Index Weighting

QH (QIA), 16.7% Other Domestic, 73.1% Foreign, 10.2%

Stable Long Term Credit Rating

Rating Agency Long Term Short Term Outlook Moody’s A1 P-1 Stable Fitch A F1 Stable S&P Global A- A-2 Stable Capital Intelligence A+ A1 Stable

Shareholding Structure

All the above data is as of 30 Jun 2020. The weightings are subject to changes

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Qatar Islamic Bank Page | 7

1

Introduction

3

Appendix

2

QIB Financial Overview

Agenda

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Qatar Islamic Bank Page | 8

  • Stable balance sheet, total assets

reached QAR 165.8 bn with a growth of 7.3% vs Jun-19 and 1.4% vs Dec-19.

  • Financing

assets reached QAR 112.3 bn with a growth of 5% vs Jun-19.

  • Strong asset quality and prudent

risk management policy NPF ratio at 1.4% and provision coverage ratio at 100%

  • Customer deposits reached QAR

106.6 bn with a same levels of Jun- 19.

  • Robust net operating income at

QAR 2,607 mn, growth of 12.6% vs. Jun-19.

  • Stable profitability with net profit

at QAR 1,427 mn.

  • Operating

efficiency: Cost to income ratio improved to 21.1% vs. 23.5% in Jun-19 lowest in the Qatari Banking sector.

  • Adequately capitalized the Basel

III capital adequacy ratio stands at 18.6% as of Jun-2020.

Financial Overview Q2 2020

Financial Position

Key Highlights

(1) Attributable to shareholders of QIB (2) Net Operating Income : Total income less profit paid to unrestricted investment account holders and share of Sukuk Holders’ Profit (3) Investments includes investments securities , investments in associates and investments properties

QAR million

Jun-20 Jun-19 Variance Vs Jun-19 Mar-20 Dec-19 Variance Vs Dec-19

Total Assets

165,802 154,590 7.3% 166,052 163,519 1.4%

Total Financing

112,256 106,956 5.0% 113,987 113,754

  • 1.3%

Total Deposits

106,609 107,564

  • 0.9%

110,241 111,621

  • 4.5%

Investments(3)

36,317 35,240 3.1% 35,703 35,992 0.9%

Shareholders Equity(1)

16,806 15,621 7.6% 16,270 17,133

  • 1.9%

Total Equity

21,694 20,922 3.7% 21,277 22,159

  • 2.1%

Financing to Deposit Ratio (%)

105.3% 99.4% 5.9% 103% 102% 3.4%

Capital Adequacy Ratio (%)

18.6% 18.5% 0.1% 18.9% 19.5%

  • 0.9%

Provision Coverage Ratio (%)

100.0% 100.0% 0.0% 100% 100% 0.0%

QAR million Jun-20 Jun-19 Variance Vs Jun-19 Q2-20 Q2-19 Variance Vs Dec-18 Net Operating Income(2) 2,607 2,314 12.6% 1,414 1,165 21.4% Total expenses (551) (545) 1.1% (279) (278) 0.7% Financing provisions (602) (298) 102.3% (383) (104) 267.8% Total provisions (665) (394) 68.7% (389) (192) 102.4% Net profit before tax & NCI 1,391 1,375 1.2% 746 695 7.3% Net profit for the year(1) 1,427 1,425 0.1% 739 740

  • 0.1%

Earnings Per Share (QAR) 0.60 0.60 0.1% 0.31 0.31

  • 0.1%

Cost to income ratio 21.1% 23.5%

  • 2.4%

19.8% 23.8%

  • 4.1%

Return on average equity 15.9% 17.4%

  • 1.5%

16.7% 16.9%

  • 0.2%

Return on average assets 1.7% 1.8%

  • 0.1%

2.6% 2.5% 0.1% Cost of Risk (Fin. assets) annualized 1.07% 0.56% 0.52% 1.37% 0.39% 0.98%

Profitability Year-to-date Quarterly

Source: QIB financial statements

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Qatar Islamic Bank Page | 9

QIB – Quarterly Financial Highlights

107 107 114 114 112

Jun'19 Sep'19 Dec'19 Mar'20 Jun'20

20 40 60 80 100 120

108 107 112 110 107

Jun'19 Sep'19 Dec'19 Mar'20 Jun'20

20 40 60 80 100 120

Quarterly Operating Expenses (QAR Mn) Quarterly Operating Income (QAR Mn) Quarterly Net Profit (QAR Mn)

278 283 273 271 279

Q2-19 Q3-19 Q4-19 Q1-20 Q2-20

80 160 240

1,165 1,229 1,287 1,193 1,414

Q2-19 Q3-19 Q4-19 Q1-20 Q2-20

200 400 600 800 1000 1200

740 790 840 688 739 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20

200 400 600

155 155 164 166 166

Jun'19 Sep'19 Dec'19 Mar'20 Jun'20

35 70 105 140 175

Assets (QAR Bn) Financing (QAR Bn) Deposits (QAR Bn)

5% 7% 21% 1% 0%

  • 1%
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Qatar Islamic Bank Page | 10

Key Quarterly Ratios

5.4% 5.5% 5.5% 5.3% 4.9% 2.3% 2.4% 2.4% 2.3% 1.8% 3.1% 3.0% 3.1% 3.0% 3.0% Q2-19 Q3-19 Q4-19 Q1-20 Q2-20

Financing Yield Deposit Cost Net Margin

Financing Staging Ratio (%) Financing Coverage Ratio (%) Yields (%) CET1 & CAR (%)

Cost to Income Ratio (%)

ROAE, ROAA, RORWA (%)

23.8% 23.0% 21.2% 22.7% 19.8% Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 1.2% 1.2% 1.3% 1.3% 1.4% 14.1% 14.5% 13.9% 15.8% 16.1% 84.7% 84.3% 84.8% 82.9% 82.5% Jun'19 Sep'19 Dec'19 Mar'20 Jun'20

Stage 3 Stage 2 Stage 1

190.8% 194.2% 182.5% 188.1% 206.9% 100.0% 100.0% 100.0% 100.0% 100.0% Jun'19 Sep'19 Dec'18 Mar'20 Jun'20

Total Coverage Ratio* Stage 3 Coverage ratio

13.6% 13.5% 14.7% 14.1% 13.9% 18.5% 18.4% 19.5% 18.9% 18.6% Jun'19 Sep'19 Dec'19 Mar'20 Jun'20

CET1 CAR

18.1% 18.6% 19.0% 15.4% 16.7% 1.9% 2.0% 2.1% 1.7% 1.8% 2.7% 2.9% 3.1% 2.5% 2.6% Q2-19 Q3-19 Q4-19 Q1-20 Q2-20

ROAE ROAA RORWA * Total coverage ratio = total financing ECL / stage 3 exposures

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Qatar Islamic Bank Page | 11

Source: QIB financial statements

Asset Mix – 30 Jun 2020

6% 3% 68% 20% 2% 1%

Cash & Balances Due from Banks & Financial Institutions Financing Assets Financial Investments Other Investments Other Assets

Asset Composition by Type Asset Composition by Geography

90% 1% 6%1% 2%

Qatar GCC Europe North America Others

Financing by Sector

11% 9% 6% 12% 12% 4% 18% 22% 6%

Govt & GREs NBFIs Industry Commercial Services Contracting Real Estate Personal Others

Financial Investments by Type

90% 3% 7% State of Qatar Sukuk Other Sukuks Equity type investments

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Qatar Islamic Bank Page | 12

Liability Mix – 30 Jun 2020

Diverse Sources of Funding

10% 56% 10% 12% 9% 3%

Deposits by Type

15% 20% 65%

Current Accounts Call & Savings Accounts Fixed Deposits

Call & Savings and Fixed Deposits constitutes Total URIA

Qatar, 81.9% GCC, 3.1% Foreign, 15.0%

Qatar GCC Foreign

High Quality Domestic Deposits Sukuk Issuances and Maturities in 2019

New Issuances

  • 5yr USD 650 M @ 3 month USD Libor + 135 bps
  • 5yr USD 150 M @ 3 month USD Libor + 135 bps
  • 4yr USD 100 M @ 3.982%

Maturities - none

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Qatar Islamic Bank Page | 13

Operating Income and Cost

162 161 167 95 90 91 21 22 22

278 271 280

Q2-19 Q1-20 Q2-20 Staff Cost Other Expenses Depreciation 1,439 1,509 1,476 269 218 355 178 217 197 (721) (751) (614)

1,165 1,193 1,414

Q2-19 Q1-20 Q2-20

Financing Income Investment Income (Net) Fees & Forex URIA & Sukuk Cost

2,888 2,985 494 574 353 414 (1,421) (1,366)

2,314 2,607

Jun-19 Jun-20

Financing Income Investment Income (Net) Fees & Forex URIA & Sukuk Cost

+3% +16% +13%

Quarterly Operating Income Operating Income Change Drivers Operating Income

  • 4%

Quarterly Operating Expenses Operating Expenses Change Drivers Operating Expenses

312 327 192 180 41 44

545 551

Jun-19 Jun-20 Staff Cost Other Expenses Depreciation +5%

  • 7%

+1%

2,314 2,607 97 80 61 55

Jun-19 Financing income Investment Income Fees & Forex URIA & Sukuk Cost Jun-20

545 551

15 12 3

Jun-19 Staff Cost Other Exp Depreciation Jun-20

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Qatar Islamic Bank Page | 14

1

Introduction

3

Appendix

2

QIB Financial Overview

Agenda

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Qatar Islamic Bank Page | 15

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 (2019): 2.9mn

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 71 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 | 16

3.4% 1.8% 2.7% 0.4% 0.2%

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

206 162 152 167 192 51 57 71 90 93

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 18 24.0% 8.5%

  • 5.5%

3.8% 9.3% (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 | 17

Qatari Banking Sector – Robust Operating Environment

(QAR bn) (%)

General Overview Total Assets (Mar’20) – 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 1,654 bn (listed banks regulated by QCB) as at 31

Mar 2020 with strong and sound regulatory environment

–

Minimum capital adequacy ratio of 14.5% including ICAAP charge and 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 (Mar’20) – Listed Banks

(QAR bn) 964 166 146 109 106 56 60 45 10.0% 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 708 114 89 79 65 32 38 32 706 110 77 68 55 29 36 28 9.8% 9.9% 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 100 200 300 400 500 600 Total Financing Total Deposits Market Share Financing Market Share Deposits

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Qatar Islamic Bank Page | 18

Qatari Banking Sector – Continued Growth

912 1,001 1,016 1,120 1,158

2016 2017 2018 2019 Mar-20

200 400 600 800 1000 1200 1400

871 976 988 1,083 1,109

2016 2017 2018 2019 Mar-20

200 400 600 800 1000 1200

QAR bn Selected key bank regulations: QAR bn

1,313 1,445 1,485 1,623 1,654

2016 2017 2018 2019 Mar-20

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 | 19

Consolidated Statement of Financial Position

QAR million Jun-2020 Dec-2019 Dec-2018 Cash and balances with central banks

10,704

7,403 7,299 Due from banks

4,232

3,552 6,424 Financing assets

112,256

113,754 102,210 Investment Securities

33,042

33,272 31,473 Investment in associates

1,151

545 568 Investment properties

2,124

2,175 1,231 Fixed assets

432

452 479 Intangible assets

376

400 386 Other assets

1,485

1,966 3,161 Total Assets

165,802

163,519 153,232 Due to banks

18,970

14,355 17,234 Customers’ current accounts

16,252

14,979 15,421 Sukuk financing

14,215

10,934 9,189 Other Liabilities

4,315

4,450 5,472 Total Liabilities

53,752

44,718 47,316 Equity of unrestricted investment account holders

90,356

96,641 85,177 Share capital 2,363 2,363 2,363 Legal reserve 6,370 6,370 6,370 Risk reserve 2,380 2,380 2,319 General reserve 82 82 82 Fair value reserve

(215)

242 154 Foreign currency translation reserve

(368)

(316) (348) Other reserves 217 217 217 Retained earnings

5,977

5,795 4,263 Total equity attributable to shareholders of the bank 16,806 17,133 15,420 Sukuk eligible as additional capital 4000 4,000 4,000 Non-controlling interests 888 1,026 1,319 Total Equity 21,694 22,159 20,739 Total liabilities, URIA and Equity 165,802 163,519 153,232

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Qatar Islamic Bank Page | 20

Consolidated Statement of Income

QAR million YTD Jun-2020 YTD Jun-2019 Dec-2019 Dec-2018

Net income from financing activities

2,984

2,888

5,867 5,329 Net income from investing activities

573

494

1,063 673 Total income from financing and investing activities

3,558

3,382

6,930 6,001 Fee and commission income

417

379

869 732 Fee and commission expense

(78)

(82)

(176) (156) Net fee and commission income

339

297

693 576 Net foreign exchange gain

37

34

59 259 Share of results of associates

6

3

(1) (1) Other income

25

19

58 47 Total Income

1,944

3,735

7,738 6,883 Staff costs

(161)

(312)

(640) (653) Depreciation and amortization

(22)

(41)

(83) (89) Sukuk holders’ share of profit

(110)

(180)

(376) (255) Other expenses

(88)

(192)

(377) (402) Total Expenses

(382)

(725)

(1,477) (1,400) Net impairment losses on investment securities and properties

(22)

(74)

(94) (238) Net impairment losses on financing assets

(219)

(298)

(624) (505) Goodwill Impairment

(22)

  • Other impairment losses

(13) (23)

(15) 23 Net profit for the period before tax and URIA

1,286

2,616

5,528 4,764 Net return to unrestricted investment account holders

(641)

(1,241)

(2,532) (2,125) Net profit before tax

645

1,375

2,996 2,638 Tax expense

(2)

1

(11) 2 Non-controlling interest

44

49

71 115 Profit Attributable to: Shareholder of the Bank

688

1,425

3,055 2,755

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Qatar Islamic Bank Page | 21

QIB AWARD WINNING ORGANIZATION

Best Islamic Bank in Qatar 2020 Best Islamic Bank in the Middle East 2020 Best Islamic Bank in Middle East 2020 Best Islamic Bank in Qatar 2020 World’s Best Islamic SME Bank 2020 Best Islamic Retail Bank in the Middle East 2020 Best Digital Bank in Qatar 2020 Best SME Bank in Qatar 2020 Qatar’s Best Digital Bank 2020 Best Islamic Bank in Qatar 2020 Best Islamic Bank in Qatar 2020 Best Digital Bank in MENA 2020 Best Digital Bank in Qatar 2020 Qatar's Best Bank 2019