Interview: Bassel Gamal, group chief executive officer, QIB
Following the successful World Cup, what are the priorities for the next phase of Qatar’s development?
Following the 2022 World Cup, we are experiencing a transformative 2023. Slower credit growth is signalling a shift from rapid non-oil sector expansion, which was driven by extensive infrastructure investments tied to the event. The remarkable infrastructure built for the World Cup will find a new purpose, boosting the economy through international events. The tourism and hospitality sectors, along with upcoming events like the Asian Football Cup and Formula 1 Qatar Grand Prix, will enhance global attention.
While a temporary population decline is expected due to departing blue collar workers, skilled expatriates will drive sectors like technology and manufacturing. Sustainability is a core focus, with carbon footprint reduction and investments in education and research. As Qatar embarks on this crucial phase, its strategic vision, modern infrastructure and dynamic economy promise enduring growth and global influence, building upon the World Cup legacy.
How has the banking sector managed rising inflation and interest rates?
Qatar’s banking sector remains robust amid global inflation and rising interest rates, boosted by the country’s strong economy and the North Field expansion. This expansion involves funding sub-contractors and supporting downstream industry development, which are promising opportunities for banks. Qatar’s favourable liquefied natural gas market position shields it from high inflation, resulting in a lower consumer price inflation rate compared with the Arab world and Gulf Cooperation Council region. Self-sufficiency in dairy and vegetables helps counter imported inflation.
Limited credit growth driven by government repayments will intensify competition among banks to maintain low interest rates. Yet the retail banking sector shows promise, driven by new residential policies. Qatar’s banking sector remains resilient and poised to seize emerging opportunities for sustained economic growth.
What is your bank’s strategy for growth and development for the coming years?
Qatar Islamic Bank has devised a comprehensive growth and development strategy for the coming years, with customers at the centre. Our approach involves the strategic evolution of our business model, exploration of novel revenue streams and the seamless integration of environmental, social and governance principles into our operations. QIB recently formulated a sustainability strategy aligned with the aspirations of Qatar National Vision 2030, the sustainability criteria set forth by the Qatar Stock Exchange, and the United Nations Sustainable Development Goals. These guiding frameworks steer our future endeavours, emphasising sustainability in our financing activities, support for local communities and pioneering initiatives to mitigate our environmental footprint.
QIB’s dedication to Qatar’s long term vision includes rigorous ESG assessments for all business finance requests, leading to substantial investments in areas such as green buildings, pollution prevention, education, healthcare and small and medium-sized enterprise support. Furthermore, QIB actively engages in initiatives aimed at facilitating Qatar’s transition towards renewable energy and decarbonisation, underscoring our commitment to environmental stewardship. Concurrently, our pursuit of digitalisation serves a dual purpose, promoting financial inclusion while enhancing resource efficiency, thereby contributing to both the nation’s development goals and environmental sustainability.
What are some of the key highlights from QIB’s financial performance over the last year?
QIB achieved strong financial results in 2022, with a record-breaking net profit of QR4bn ($1.1bn) and total income of nearly QR9bn. Over the past five years, QIB has demonstrated substantial growth, with a 63% increase in net profit and a 30% surge in total assets. The bank achieved a return on equity in 2022 of 18.2%, a return on assets of 2.1% and an efficiency ratio of 17.4%, making it Qatar’s best-performing bank. QIB’s strategic investments in technology and digital banking have also improved revenue growth and efficiency. The bank maintained sound financial stability with a capital ratio of 19.9% and exemplary asset impairment management, remaining the largest Islamic and private bank in Qatar.
Speaking of digitalisation, can you expand on the bank’s investments on that front?
Since 2018, QIB has undergone a comprehensive digital transformation, resulting in increased sales and revenue, while shifting branch transactions to digital channels. In 2022, there was a 20% increase in retail mobile app users and a 48% rise in app-based transactions. Branch transactions have decreased by 44% since early 2020, and digital channels now contribute to almost 60% of the total sales volume for key retail products. On the corporate side, digital channels account for 94% of transfers and 60% of digital check clearing. QIB’s digital solutions offer 24/7 banking, a user-friendly interface and instant service fulfilment.
This focus on innovation and customer experience has made QIB the most customer-centric and efficient bank in Qatar. The firm leverages advanced technologies like optical character recognition, artificial intelligence and data science, setting new standards in digital banking in Qatar. Going forward, we will continue our investment in digitalisation, with a greater focus on strategic partnerships with fintech and other innovative players.
Earlier this year, the Qatar Central Bank unveiled the Qatar FinTech Strategy 2023, in line with the Qatar National Vision 2030 objective of fostering diversification and innovation in the financial sector. In this context, the Qatari banking sector is actively reshaping its services and operations to maintain competitiveness amid the ever-evolving technological landscape.