International credit rating agency, Standard & Poor’s (S&P) has affirmed Qatar Islamic Bank’s (QIB) Issuer Credit Rating at ‘A-/A-2’ with a stable outlook.
S&P said, “Our ratings on QIB reflect our view of its robust corporate banking franchise, strong capitalisation, adequate liquidity and favourable position as Qatar's largest Islamic bank. We expect QIB to continue its foray into government and government-related entity (GRE) business while protecting its robust private-sector franchise.
“QIB’s funding profile is dominated by core customer deposits. We expect these deposits to remain fairly stable as they are underpinned by strong long-term relationships. The bank has also been actively tapping into the sukuk market over the past few years.”
The report also reiterated that QIB’s long-term rating is in line with the bank’s “high systematic importance” in Qatar and the agency’s assessment of the Qatari government as highly supportive to the domestic banking sector.
The report noted, “The long-term rating on QIB is three notches higher than the Stand-Alone Credit Profile (SACP) to incorporate our view of a high likelihood of extraordinary government support if needed, given its client and shareholder base.”
QIB has demonstrated steady financial growth over the past years and has been setting a benchmark for Islamic banks in the region with its embrace of cutting-edge banking technologies, and its customer-centric approach to both its product offering and the overall banking experience.
Registering increasing growth rates for the seventh consecutive year, QIB delivered a record performance in 2019, continued to make strong progress on its digital transformation programme and grew across all its business segments.
QIB also increased their customer satisfaction scores, further invested in their people and improved internal processes and efficiency across the entire group.
QIB Group CEO Bassel Gamal said, “We are pleased with the affirmation of the rating by S&P. The rating is a testament to our strength and commitment to the local economy and banking industry. The bank achieved positive financial results during the fiscal year of 2019, with a strong performance across all our divisions, registering strong earnings and returns for the shareholders.
“As mentioned in the S&P report, we have robust asset quality indicators with the ratio of non-performing financing assets to total financing assets at 1.3%, one of the lowest in the industry. We also continue to follow a conservative impairment policy maintaining 100% coverage ratio for non-performing financing assets as of December 2019.”
“As the world experiences unprecedented challenges due to Covid-19, our first priority is the safety of our customers and employees, while ensuring business continuity. We have taken major strides to support Qatar’s efforts to curb the spread of the virus, by raising awareness on preventative measures within the community and encouraging our customers to bank from home using our comprehensive digital channels.
“We have also been proactive and fully supportive of the measures implemented by the Government and the Qatar Central Bank to help the sectors and corporations impacted by the negative effects of the current crisis,” he added.
Established in 1982, QIB was the first Islamic bank in Qatar. Today, it is the second largest bank, and largest Islamic bank in the country, currently holding around 40% share of the Islamic banking sector and approximately 11% of the total domestic banking sector, QIB said.