While the rapid expansion of Islamic finance is a relatively recent phenomenon, Qatar Islamic Bank, the Gulf Arab state’s largest Shariah-compliant lender by assets, this year marks its 30th anniversary.
Established in 1982, QIB has long been at the forefront of the Islamic banking industry, extending its activities from Qatar and the Gulf to the Middle East, Asia, Europe, and North Africa.
The bank defines itself as “the benchmark Islamic bank in Qatar”, and experts agree. Global Finance this year named it Best Islamic Financial Institution in Qatar, recognising the bank’s contribution to the growth of Islamic banking both locally and internationally, while The Asset magazine awarded it Best Bank in Qatar. Last year it was named Best Islamic Bank in Qatar for 2011 at the Islamic Finance News (IFN) awards.
Despite the plaudits, QIB’s anniversary year does not find the bank resting on its laurels. Indeed, recently it has been undertaking a transformation programme in order to take full advantage of the promising growth opportunities in Qatar and beyond.
With paid-up capital of QR2,360 million ($648 million), and a well-distributed network of 30 branches, QIB holds a 36 percent share of the Islamic banking market in Qatar, and an approximate market share of 10 percent.
|“The bank continues to show significant growth, stable and well diversified revenue streams, and positive results,” |
Chairman Sheik Jassim Bin Hamad Bin Jassim Bin Jaber Al Thani
Along with offering a wide range of products and services for individuals, the bank is active in financing for businesses of all sizes, from major corporations to small and medium-sized enterprises, and micro enterprises, as well as participating in joint financing projects with other financial institutions.
One of the largest initiatives of national importance to which it has contributed is the Barzan Gas project, being implemented as a joint venture between Qatar Petroleum and ExxonMobil Qatar. QIB provided $500 million to finance the project, which is the biggest portion of the total Islamic tranche of $850 million.
More recently, in August, QIB signed a $380 million package for the Qatar Gas Transport Company (Nakilat) in partnership with Qatar International Islamic Bank (QIIB). QIB has also extended a $500 million Islamic financing package to Qtel.
The bank’s sound financial position and business strategy is reflected in its rating from international ratings agencies. In August, Fitch Ratings affirmed QIB’s long-term issuer default rating at ‘A’ with a stable outlook, and viability rating at ‘bbb’.
Standard & Poor’s, rating the bank for the first time, recently assigned its ‘A-’ long-term and ‘A-2’ short-term counterparty credit ratings to QIB with a stable outlook rating on the long-term. S&P hailed QIB’s leading position in the Qatari Islamic banking segment, and its business model and management.
Financial results for the nine months ended 30 September 2012 show QIB realised a net profit of QR1.13 billion ($310 million), a rise of 2 percent compared to same period last year. The bank’s total assets increased by 26.7 percent to stand at QR 66.8 billion ($18.3 billion), while customer deposits show 50 percent growth at QR39.9 billion ($10.9 billion).
Sheikh Jassim Bin Hamad Bin Jassim Bin Jaber Al Thani, QIB’s Chairman, says, “The bank continues to show significant growth, stable and well diversified revenue streams, and positive results.”
QIB has also recently been celebrating the hugely successful first tranche of its new $1.5 billion Islamic bonds (sukuk) programme, a $750 million 5-year sukuk priced at a profit rate of 2.5 percent – the lowest profit rate ever achieved by any GCC financial institution.
Marking QIB’s return to global debt markets after two years, the sukuk aroused enormous interest from international as well as regional investors, with strong participation from Asia and the MENA region, and also from Europe. With the final book reaching $6 billion, the issue was 8 times oversubscribed in a year when there has been no shortage of Middle East sukuk issues.
Sheikh Jassim says the sukuk programme will enable the bank to further contribute to Qatar’s economic growth both at home and internationally.