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Innovation and customer service makes Qatar’s Commercial Bank stand out

Interview - March 13, 2015

Ranking the world’s fourth largest economy, recent figures show the MENA region generated a combined GDP of approximately 3.6 trillion USD. While the global financial system may remain in flux, the uncertain landscape poses opportunities for financial institutions.


Is the financial crisis now a distant memory for the region, and what role can the GCC play in shaping future investment and global economic trends?

The financial crisis impacted us all, but we have weathered the storm and we have seen good growth and opportunity as the markets improved. In Qatar we have a robust 2030 Vision which has, and will continue to, drive our decisions for investment and development. As a bank CBQ has the products and expertise to service all our clients whether they be retail or wholesale as we work in line with the government to deliver this Vision.As you say MENA is the world’s fourth largest economy and with the investments being made by the region it will impact global trends.That, together with being a major natural resources hub, influences the global economy.

Between 2009 and 2011 the country’s GDP grew by almost 12 percent and that makes the GDP today around 200 billion US dollars. So we can see there is a strategy of diversification, which falls in line with the Vision 2030. What are the responsibilities of the banking and finance sector to help achieve the Vision 2030?

I think the Qatar National Vision 2030 is pushing everybody to create, to be innovative in order to support this Vision and raise the country’s standards. The chance for us to develop this economy, the diversification of the economy, is huge. And I can tell you now in every sector, such as education, healthcare, technology and industrial sectors, we are working to grow the country, so we are not going to have to rely on the oil and gas sector but eventually we will have a wide band of income generating resources from which we can benefit. That is why we, at CBQ, think probably now is the right time to expand our vision, and see where we can go and invest in the international market.

You may have noticed the trend of the government to invest in real estate and infrastructure, whether locally or internationally. That gives us a feeling that this moment of diversification and the whole strategy of Qatar is on the right track. His Highness the Emir is determined to keep his promise to every citizen, for the country, and for the next generation. That is why they are investing so much, especially in education, and we know for a fact that this is the main point where you can build up the country: good education and also good health care.  It makes me personally feel secure, because I know the next generation will enjoy all the positive things that we are building today.

Doha has undoubtedly become the sports capital of the Middle East, propelling itself forward with an unrivalled dedication to hosting dozens of major sporting events, including the 2022 FIFA World Cup. Qatari banks are undoubtedly benefitting from the knock-on effect of the state's heavy investment in infrastructure and preparations. To what extent is this encouraging for the sector, yet challenging to finance Qatar’s mega infrastructure projects?

Clearly, much of the initial economic impetus will come from large Government infrastructure investment. Over time this type of investment will translate into a broader and more diverse Qatari economy: a larger and wealthier private and retail banking market; increased opportunities in the services, retail and trading sectors; strong growth in the small and medium enterprise segment. And with our strong domestic network and franchises in all areas of banking this provides a wide range of growth opportunity for us. The main challenge will be to ensure that the growth is profitable for our shareholders. For this to happen we need to ensure that we continue to grow in a controlled and balanced manner, and avoid some of the negatives that are invariably associated with operating in a high growth market.

The Qatari economy and its banking system, as well as the GCC region’s economies, are anticipated to grow strongly in the medium term. The private sector is expected to increasingly lead the growth of the non-hydrocarbon sector, particularly in industry and small businesses. As the second largest bank in Qatar with one of the biggest shares of private sector lending, CBQ is very well positioned to benefit from this growth.

With increasing technology, competition, and digitalization of the industry in 2015, leaders who can balance innovation and customer experience with the pressure of regulatory compliance will differentiate their brand and win. How can the Qatari banking sector stand forth to differentiate their brands by innovating new client experiences and leverage better targeting and segmentation? Which of Commercial Bank’s services would you like to highlight?

As a bank, we are continually looking at ways to innovate and improve our customers’ experience. We pride ourselves on our customer service levels. An example of this is our Retail Banking offering from Personal through to Private Banking where we have a strong digitalization strategy and have a fantastic Internet and Mobile offer which competes with any available in the market.

The bank was established in 1975, so this would be your fortieth anniversary. That makes 40 years of excellence and the bank has become one of the leading banks in Qatar.

Would you please highlight for the readers the genesis and development of Commercial Bank of Qatar, leading it to its prominent position today?

The first private bank in Qatar, CBQ’s long-term success can be attributed to several factors, beginning with the ambitious aims and vision of the Bank’s Founding Members, including our current Vice-Chairman and Managing Director, Mr. Hussain Ibrahim Alfardan. Since then, CBQ’s success has mirrored Qatar’s extraordinary economic growth. We are proud to be a Qatari bank and wholly committed to Qatar and its people under the leadership of His Highness Sheikh Tamim bin Hamad Al Thani, Emir of the State of Qatar. One of the many ways we express our commitment to Qatar is by actively supporting the Qatar National Vision 2030. You can already see our contribution in Qatar’s physical landscape, as numerous large infrastructure and development projects have been financed through CBQ.

CBQ has not enjoyed success simply by being ‘in the right place at the right time’. Our successful regional expansion strategy has built a strong regional presence with 34.89% shareholding in National Bank of Oman, and 40% shareholding in United Arab Bank in the United Arab Emirates. Building on the successful execution of the Bank’s regional expansion strategy to date, in July 2013 we acquired a majority stake in Alternatifank in Turkey. These strategic alliances enable CBQ to offer integrated services across the region, including cross border services for corporate banking and capital markets; support on trade services, private banking services and syndicated loans across all four markets. We have strong links with these entities and mutually develop business. For the future we will, for example, continue to develop our International business in CBQ with a particular focus in MENA as well as concentrating on trade routes such as Asia / Middle East.

We started with a paid up capital of 10 million riyals but we have always been determined to make CBQ recognized as one of the strongest pillars of the economy of Qatar. In summary, CBQ’s success has been achieved through our own multi-faceted strategy over the years based on regional expansion, innovation, trustworthiness and strong corporate values.

Commercial Bank sponsors a wide range of events with a particular focus on championing human endeavor across sports, education, culture and arts. Would you expand on these CSR projects and events, and why these values are important to you as a financial institution?

We want to create an identity for Qatar to be known around the world as a sports hub. Why do you think Qatar is investing so heavily in this area?It is to tell the world we are here, and ready for anything. We are ready because of our experience and our success managing the Asian Games and other international sporting events. Other than making Qatar known as a sports destination, there will be a positive outcome for international investors to come and invest in infrastructure projects. Of course, as well as an opportunity for us to get to know these international investors and provide them with all the services they require.

CBQ is dedicated to supporting Qatar’s community and social infrastructure through Corporate Social Responsibility programs and sponsorship of various events. Title sponsorship of the Commercial Bank Qatar Masters and the Grand Prix of Qatar Moto GP reflects the bank’s promotion of excellence in sports and its keen interest in enhancing Qatar’s international sporting reputation. CBQ also supports many notable charities that contribute significantly to Qatar’s social infrastructure.

We believe it is our role to support Qatar in a holistic manner and our commitment lies with the overall community. We are proud to be a home-grown Qatari bank and are wholly committed to serving Qatar and its people under the wise leadership of HH the Emir Sheikh Tamim bin Hamad Al Thani.

Commercial Bank of Qatar is a fundamental company listed on the Qatar Exchange with key shareholders that are blue chips in the Qatar investment, corporate and high net worth community. How has the Morgan Stanley Country Index upgrade of Qatar Exchange from frontier to emerging market status together with that of Commercial Bank, highlighted the intrinsic connection between the success of Qatar Exchange and the strength of its national banking sector?

The Morgan Stanley Capital International (MSCI) upgrade is expected to result in huge inflows of foreign funds into the Qatari companies that have qualified to be included in the Emerging Market Index. 50% of these qualifying companies are in financial services (including CBQ) and so the upgrade means a clear boost for Qatar’s financial sector. More widely, the MSCI upgrade is international recognition of Qatar’s maturing economy and equity market.     

Facing increasing competition and a saturated local market, financial institutions recognized the need to diversify through internationalization, with international impact further highlighted by Commercial Bank’s participation in projects and structured finance initiatives across the GCC. In what ways is your diversified product offering appealing to a broad range of customers? How does Commercial Bank approach this challenging internationalization strategy?

We continuously innovate and introduce new products and target these products to each category of our client base.All customers are becoming more international and they expect international standards of service. In Retail, we tailor products to our customer needs and they expect international standards. In Wholesale, we continue to provide our clients with products as they become more international, such as cash management and trade services.

We were the first bank to provide an ATM nationally, we were the first bank to provide credit cards and we are now the number one digital bank in Qatar. We have made it easy for everybody to enjoy our services, because we believed from day one, that we will not grow with the old technology and without the advancements the banking industry in the world is witnessing. We don’t want to be in the back seat, we always want to lead. It is not in terms of capital and growth however that we compete; it is in the quality of services that we provide and our innovative approach. Our investment is in the satisfaction of our customers.

You have been quoted saying that indeed, “The world is changing,” but that “Qatar is changing faster.” How do you envision Commercial Bank adapting and refining itself over the next 10 years?

We constantly scan the markets and opportunities in which we operate. We adapt and refine our proposition to meet client demands and expectations. We will continue to do this and invest in our people and products to deliver best in class services to our clients.In Qatar we are a firm number 2 and the oldest and largest private bank, this will remain the case. Internationally, we will continue to work with our Subsidiary in Turkey, and Associates in the UAE and Oman, as well as look for opportunities internationally, especially where we can service our clients both inbound into Qatar and our Qatari clients looking globally.

Lord Howell stated that the UK and Qatar shared a multitude of investor opportunities from infrastructure development projects related to the 2022 World Cup, to the augmentation of both countries’ key sectors. UK Trade and Investment have also prioritized Qatar by putting them on the ‘High Value Opportunities Programme’, seeking to support business-to-business engagement bilaterally. Which do you see as the greatest investment or partnership opportunities for British individuals or companies in Qatar today?

There is considerable opportunity in a number of areas and we see daily that British firms and individuals are taking the initiative from individuals we provide personal banking to, or our UK corporate clients coming to, or growing in, Qatar. There is continued opportunity in the natural resources side but considerable UK involvement in the newer areas such as real estate, infrastructure, education and healthcare.