25-11-2020
Moody's Investor Services Agency (Moody's) affirmed that Qatar Islamic Bank (QIB) long-term deposits are rated at A1 level with a stable outlook.
Moody's said in its credit report that the bank maintained its position as the second largest bank in Qatar and the largest Islamic bank in the country, with a market share of about 10.5% of the total assets of the Qatari banking sector, and a consolidated level of assets of 170 billion Qatari riyals.
Moody's added that the rating given to the bank reflects the quality of the bank’s strong assets, good profitability, robustness and adequacy of the capital base, as well as its limited reliance on funding from the market, adding that the bank’s stable outlook takes into account the stable outlook for Qatar’s government bond rating at Aa3.
Regarding the bank’s profitability, Moody's said that the bank “achieved strong and stable profits of 1.4% to 1.7% as returns on tangible assets. This performance is supported by the strong growth of the bank reflecting the growing spread of Sharia-compliant assets in the State of Qatar. This is also in line with the strategy of the transformation followed by the bank since 2012, and the reorientation of its assets towards financing and domestic operations instead of international operations. The bank’s profitability was also supported by a decrease in the cost-to-income ratio, and by the strength and stability of the net profit margin on an annual basis, in addition to lower financing costs. "
The Moody's report also indicated that the bank “witnessed rapid growth in financing and achieved a compound annual growth rate of 15% during the period from 2012 to 2019 (for total financing), compared to the market average in Qatar of 10% and later 11.7% during 2019. The financing ratio reached Defaulting to the total financing of 1.3%, which is considered one of the best rates compared to the average of the banking sector in the State of Qatar. The quality of the bank’s assets is supported by increased dealings with the Qatari government and quasi-governmental bodies, which are characterized by high credit quality and no default rates.
“We expect the bank’s capitalization to remain generally stable, above its minimum capital target. The bank will be able to meet future capital requirements arising from the growth of its assets through a combination of retained earnings and capital issues,” Moody's said in its report.
Commenting on Moody's rating, Mr. Basil Jamal, Chief Executive Officer of QIB Group, said: “We are pleased to confirm Moody's rating the bank at this level. The state and financial strength of Qatar Islamic Bank, which is continuously improving in line with our long-term goals. These ratings are also a strong confirmation of the bank’s success in maintaining its stability and business model, as well as the quality of its assets and its strong financial position during all circumstances. ”
Mr. Basil added, "The bank is committed to the highest standards of work, and we will continue our work to implement our long-term business strategy, and to focus on contributing to the development of the national economy, with constant readiness to deal with any potential challenges."
The bank recently announced the results of the nine-month period ending on 30 September 2020, as it achieved a net profit of 2,216.5 million Qatari riyals for the nine-month period ending on 30 September 2020, at the same level for the same period in the year 2019. The total assets of the bank increased to 170 billion Qatari riyal, achieving a growth of 4% compared to December 2019, and an increase of 9.8% compared to September 2019, supported by continuous growth in financing and investment activities. Total financing assets amounted to 113.2 billion Qatari Riyals, a growth of 5.7% compared to September 2019. Customer deposits amounted to 112 billion Qatari Riyals, an increase of 5% compared to September 2019.