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CI reaffirms QIB’s long term rating at A+ with stable outlook

CI reaffirms QIB’s long term rating at A+ with stable outlook

Tribune News Network
Doha
International credit rating agency Capital Intelligence (CI) has affirmed the long-term and short-term foreign currency ratings of Qatar Islamic Bank (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 capitalization in a well-capitalized 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 that 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 capitalization 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.”
Commenting on the rating, Mr. Bassel Gamal, QIB’s Group Chief Executive Officer, said: “We are pleased with the reaffirmation of our ratings by Capital Intelligence. This confirms the strong financial position of Qatar, its banking sector, and QIB’s vigor which has been steadily improving in line with our long-term strategies and objectives.”
“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.” Bassel added.
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 net profit attributable to shareholders of QR3,065 million for the fiscal year 2020 compared to QR3,055 million for the year 2019, despite the impact of COVID-19 and the decline in oil prices. The Bank maintained the basic earnings per share at QR 1.21.
Total assets of the bank has increased by 6.6% compared to 2019 and now stands at QR174.4 Billion driven by a growth in the core banking activities.
Financing activities registered a robust growth by 4.7% over 2019 to reach QR119.1 billion. Customer Deposits of the bank now stand at QR118.1 billion registering a growth by 5.8% compared to December 2019.

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