Doha: Fitch Ratings has affirmed Qatar Islamic Bank (QIB)’s Long-Term Issuer Default Rating (IDR) at ‘A’ with a Stable Outlook. Fitch has also reaffirmed QIB’s Viability Rating (VR) at ‘bbb’.
Fitch Ratings said in its Rating Action Commentary that: “QIB’s VR reflects the bank’s strong company profile, which is underpinned by its leading domestic Islamic banking franchise. QIB is the oldest and largest Islamic bank in Qatar, accounting for about half of total Islamic banking assets. QIB holds 10 percent of total domestic banking assets (making it Qatar’s second-largest bank) and 13 percent of deposits at end-June 2020. QIB’s strong local deposit franchise results in a high proportion of retail depositors. The VR also reflects the bank’s solid profitability, adequate core capitalization, and sound asset quality which is balanced against high financing concentration”.
The report mentions that: ”Asset-quality metrics compare well with peers. The bank’s impaired financing ratio has marginally increased since 2018 to 1.4 percent at end-1H20. Total financing loss allowances covered impaired financings by over 200 percent at end-1H20, which is conservative in our view”
On QIB’s profitability, the Fitch report commented that: “QIB’s profitability is superior to peers given its strong domestic franchise, which supports financing growth and attracts cheap retail deposits, which ensures a lower cost of funding compared to peers. Profitability is also supported by relatively low financing impairment charges, given sound asset quality, and well managed costs”.
Bassel Gamal, QIB’s Group Chief Executive Officer, said: “The affirmation of our ratings, despite the current global challenges, confirm the strong financial position of Qatar, the banking sector outlook and QIB’s financial vigour, which has been steadily improving in line with our long term objectives. It is a confirmation of QIB’s stability, sustainable business model, high asset quality and robust capital position.”
“We will remain committed to the highest work standards, and we will continue implementing 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,” Gamal added.
QIB has recently announced the results for the nine months’ period ended September 30, 2020. Net Profit attributable to the Shareholders of the Bank amounted to QR2,216.5m for the nine months’ period ended September 2020 in line with the performance during the same period in 2019. Total Assets of the Bank now stands at QR170bn higher by 4 percent compared to December 2019 with a growth of 9.8 percent compared to September 2019 driven by the continued growth in the financing and investing activities. Financing activities have now reached QR113.2bn having grown by 5.7 percent compared to September 2019. Customer Deposits of the Bank now stand at QR112bn higher by 5 percent compared to September 2019.
