Fitch Affirms Doha Bank Ratings at “A” Stable

March 19, 2019

Fitch Ratings has affirmed Doha Bank’s Long-Term Issuer Default Rating (IDR) at “A” with a Stable Outlook. At the same time, the agency has affirmed Doha Bank’s Viability Rating at “bb+”.

The Bank’s IDRs, Support Rating (SR) and Support Rating Floor (SRF) reflect Fitch's expectation of an extremely high probability of support from the Qatari authorities for domestic banks in case of need. This reflects the strong ability of Qatar to support its banks, as indicated by its rating (AA-/Stable), combined with Fitch’s belief of a strong willingness to support the banking sector and the bank.

The latter is based on a strong track record of sovereign support to the banking sector including (a) between 2009 and 1Q 2011 when some banks received capital injections to enhance their capital buffers and the government purchased some problem assets from the banks and (b) during 2017 when the Qatari authorities placed significant deposits across the banks to support sector liquidity following the start of the blockade between Qatar and some of its neighbors.

The government owns stakes in all Qatari banks. Doha Bank’s SRF (support rating floor) is at the Qatari bank's domestic systemically important bank (D-SIB) SRF of “A”, and is not differentiated by franchise or level of government ownership because we see an extremely high probability that all rated Qatari banks would receive support should they require it.

This belief also partly reflects the risk of contagion (small number of banks and high concentration of banks in the system) and the importance of the banking system in building the local economy. The Stable Outlook on DB’s Long-Term IDR mirrors that on the Qatari sovereign.

Dr. Seetharaman, CEO of Doha Bank, said: “Given the changing dynamics of business, Doha Bank has allocated its risk-weighted capital to optimize returns. The Bank's operations have gained strength over the years, the Capital Adequacy has reached 17% as of 31 December 2018, through the strategic recruitment of shareholders' funds and the Bank has achieved a net interest margin at rates higher than those achieved by other banks.”