The Business Year

Abdulla Mubarak Al-Khalifa

QATAR - Finance

Abdulla Mubarak Al-Khalifa

Group CEO, QNB

Bio

Abdulla Mubarak Al Khalifa joined QNB Group in 1996 and is currently the acting CEO at QNB Group. His most recent role was as executive general manager and chief business officer with responsibility for corporate, retail, assets and wealth management, treasury, and international banking. He has also held several other senior strategic positions across the group, roles that have given him extensive experience in corporate and project financing, strategic planning, sales and marketing, risk management, M&As, and customer relationship management. He holds a bachelor’s in business administration from Eastern Washington University.

“Qatar’s economy is expected to experience significant momentum and growth after the 2022 FIFA World Cup.“

What is the key for QNB to maintain the balance between traditional banking values with close attention to clients and the most innovative technological solutions?

We aim to foster our core value proposition as an international universal bank while leveraging innovation as a strategic enabler, for both corporate and personal clients. Changes in customer behavior lead to a shift from brick and mortar to more convenient and remote channels. This trend has accelerated our drive toward digitalization and automation, which ultimately impacts our business and operating model. Those trends are further exacerbated by the entry of new players, such as non-banks, non-financial institutions, fintechs, and bigtechs, and results in disruption through technological innovation and financial disintermediation. We, therefore, embarked on a group-wide innovation program with the objective to transform QNB into an innovative bank leveraging digital capabilities. We put our customers at the forefront of our business’ priority to create an enhanced value proposition that includes holistic customer centricity. We however recognize that there is a balance between standardized products and services that can be fully digitalized while more sophisticated and complex services still require personal interaction and human touch. We, therefore, aim to digitalize our offerings to 24/7 solutions that are scalable and capture presence on the ground, as we do in Qatar, Turkey, Egypt, and Indonesia. On the other hand, we provide personal interaction for advisory-related services for selected wholesale and investment banking as well as affluent, asset management, and private banking offerings. This helps us to reposition the traditional human interaction with our customers to focus on what matters the most for them: where we create and add value.

What does it mean for QNB to be the Official Middle East and Africa Supporter and Official Qatari Bank of FIFA World Cup 2022?

As part of QNB’s strategy, we aim to generate long-term profitable growth. As such, we do not limit ourselves to pursue growth opportunities that are organic or inorganic but actively pursue strategic partnerships and alliances on an ongoing basis. Besides numerous strategic partnerships that we capitalize upon, one of our highlights was the conclusion of our partnership with FIFA by becoming the official Middle East and Africa Supporter of the FIFA World Cup Qatar 2022. This partnership will strengthen QNB’s brand image and reputation globally. Furthermore, QNB, as the largest bank in the country, is determined to play a key role in supporting this unique event for the State of Qatar. We see ourselves as a patron of major sports events in Qatar as well as regional and global tournaments. With this in mind, our objective is to be a facilitator for all services around payments and financial transactions to provide a seamless and holistic customer and fan experience during the event.

The economy of Qatar is expected to undergo some uncertainty after the 2022 FIFA World Cup. Which sectors and projects do you think will be able to sustain Qatar’s momentum, and what will be the role of QNB in it?

Qatar’s economy is expected to experience significant momentum and growth after the 2022 FIFA World Cup. We expect to see a surge of business as this event will benefit the economy long beyond the closing match attracting FDI while, at the same time, developing domestic entrepreneurship. Qatar’s status as a global sports hub will be a driver for new business opportunities for the private sector, though we also expect to see strong growth in new projects beyond sport that will benefit the economy. A strengthening of regulatory frameworks is paving the way for public-private partnerships (PPP) projects, particularly in the education, healthcare, and tourism sectors. Qatar has one of the largest reserves of natural gas in the world and is the leading exporter of LNG. Qatar decided to increase its LNG production to maintain its leading position through the expansion of the North Field, the world’s largest non-associated gas field. This investment is expected to increase Qatar’s LNG production by 64% to 126 million tons per annum and remains the most important growth driver for the economy. QNB as the largest bank in the country provides the full range of universal banking services. As the leading incubator for private sector engagement, we act as a one-stop shop for SMEs. We provide a comprehensive value proposition for SMEs to enable a seamless service to support them throughout all lifecycle stages. Besides providing the classical range of financial services, we offer solutions from market insight and skills training to one-to-one consulting to help them manage and grow their business. Furthermore, our holistic and bespoke wholesale and institutional products and services range entails project finance, structured finance, trade finance, cash management as well as treasury solutions across all tenor and currencies. This enables us to actively participate and contribute across projects in all sectors and provide banking solutions along the entire supply chain.

What are some of the main strengths of Qatar’s banking sector that offset potential challenges?

Qatar’s banking system is healthy and robust while at the same time offering medium to long-term growth opportunities. Total assets grew by 29% over the last three years, as at November 2021, or 8.8% on a compounded annual growth rate (CAGR). Loans and deposits growth were also healthy and stable with 33% (CAGR 9.9%) and 21% (CAGR 6.7%), respectively, over the last three years, as at November 2021. This was mainly by the active support from the government throughout COVID-19 pandemic as well as a pickup in business activity following the external global shock. Banks are well capitalized with capital adequacy ratio of 18.8 % as at end 2020, well above Basel III guidelines. Asset quality also remains strong with non-performing loans (NPLs) at 2%, as at end 2020. Overall sector profitability is solid with returns on equity (ROE) of 13.7% in 2020, marked by high efficiency. Going forward, growth in domestic credit facilities and investments will support assets and loans growth over the medium term, while the asset quality will remain strong due to the improving economic environment and the large proportion of low-risk loans to the government. Furthermore, low provisioning requirements and efficient cost bases will continue to support banks’ strong profitability. Finally, strong supervision by the central bank and very prudent lending policies will ensure that the strong health of the Qatari banking sector will continue in the future. In summary, the sector is expected to remain resilient characterized by healthy growth, high asset quality, strong capitalization levels, and robust profitability.

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