Interview: Sheikh Fahad Bin Mohammad Bin Jabor Al Thani, chairman, Doha Bank
Following the successful World Cup, how is Qatar moving forward with the next phase of its development and what are the priorities?
The success of the FIFA World Cup has raised Qatar’s profile as a destination for tourism and foreign direct investment and highlighted its potential as a host for international events. The country invested more than $200bn in infrastructure for the World Cup, which is now expected to result in positive economic multiplier effects. The increase in FDI is a crucial component of economic diversification.
In addition, the North Field Expansion to increase liquefied natural gas production will provide financial resources to diversify the economic fabric of Qatar. The legacy of advancements in transport — in particular improvements in the aviation sector — and in innovation, sustainability, digitisation and utility infrastructure will bring a major boost for the country’s long term competitiveness and international standing.
How strong is the banking sector in the face of rising inflation and interest rates?
The International Monetary Fund’s review in May 2023 indicated that the Qatar Central Bank had maintained price and financial stability. Furthermore, the IMF indicates that Qatar’s monetary policy has been broadly tightened, following the similar moves from the US Federal Reserve. This is consistent with Qatar’s currency peg to the US dollar. Monetary policy transmission has also been strengthened through more effective liquidity management.
The country’s banks remain well capitalised, have sufficient liquidity and are very profitable. The non-performing loans ratio has edged up amid monetary policy tightening. On the other hand, sound regulation that includes relatively high provisioning for NPLs helps mitigate any risk.
How best can banks support the next stage of Qatar’s economic journey?
The expansion of Qatar’s North Field project is expected to be a key driver of the economy. This provides an opportunity for banks to support infrastructure development. As analysts and commentators have noted, major project investments are likely to have beneficial multiplier effects for the economy and the banking system. These come through the positive knock-on effects that project investments have in other areas of the economy like the consumer sector. Also, the Qatar National Vision 2030 presents significant opportunities for banks. Recently, Qatari banks have populated their books with environmental, social and governance-related projects. The proportion of such projects on banks’ loan books is expected to rise, given the project priorities of the country.
What is your bank’s strategy for growth and development for the coming years?
Doha Bank has set a clear vision and mission. The bank’s focus remains on achieving its objectives through a well versed strategy, which encompasses eight strategic guiding principles. These principles help us to focus on growth and development in key business segments, such as customer experience enhancement, prudent risk management, revenue enhancement and cost optimisation opportunities.
Could you outline the highlights of the bank’s financial performance?
Doha Bank has a well established banking franchise with strong brand value, a diversified shareholder base, strong capital and liquidity management, healthy diversification of income and asset portfolio, digitisation focus, global footprint and a continued commitment to ESG.
Net profit for the first half of 2023 reached QAR 392m. This is after taking additional provisions for the first half of the year to support the bank’s financial position. In the first six months of 2023 net fee and commission income was up 7% on the same period in 2022. Our net loans and advances reached QAR 55.8bn in the first half of 2023, which was helped by a 2.2% year-on-year increase in lending to the private sector. Doha Bank’s customer deposits stood at QAR 44.1bn. Other highlights include a QAR 1bn year-on-year rise in securities investments and an impressive average return on shareholders’ equity of 5.8%.
What are some of the key operational areas where the bank is planning to increase investment?
Considering the rapid evolution of the technological landscape, automation, digitisation and innovation are at the heart of Doha Bank’s strategy. Doha Bank will continue embracing emerg- ing trends and technologies to build world class, customer-centric solutions. Our ongoing investment in technology — with a priority focus on digitisation across all banking channels — will further enhance the customer experience across all products and services.
Sustainability and ESG are becoming ever more important for the banking industry. How is your bank addressing these issues?
Doha Bank considers ESG and sustainability as a key component of its strategy. The bank has made exemplary progress in sustainability since we published our first corporate social responsibility report and launched our first green accounts in 2009. We offer a variety of green products including mortgages and car loans. Our engagement with ESG disclosure and various reporting frameworks including GRI and UNGC-COP has seen Doha Bank included in the FTSE4Good Index Series.
Most recently, in May this year Doha Bank published its inaugural Sustainable Finance Framework. This allows for the issuance of green, social and sustainability financing instruments. The proceeds raised will be dedicated to (re)financing eligible green and social assets.
We focus on collaboration to heighten our contribution to improving local and regional financial sectors. Our approach includes responsible lending to the commercial banking sector, sustainable products and a focus on energy efficiency, among other objectives. In the medium and long term, Doha Bank will ensure a culture of transformational growth and continuous improvement, with sustainability remaining at the top of our agenda in pursuing the four pillars of the Qatar National Vision 2030, by building a responsible business as well as helping Qatar to prosper.