CEO, Doha Bank
Group CEO, Masraf Al Rayan
What have been your main milestones and areas of focus?
R. SEETHARAMAN We have sustained our position as one of the pillars of the economy as far as the banking sector is concerned. We started in 1979 with a small amount of capital, QAR15 million. Looking back over the last 20 years, we have grown from a standalone branch in Qatar to becoming a global company in around 20 countries. We were the first bank to introduce mobile banking and SMS banking in Qatar. In 2004, we launched our mobile bank facility, and as a result, our retail market share went from 4% to 28% in a span of four years. We set up electronic branches, and a dedicated e-commerce portal called Doha Souk in 2004. We were the first company to issue a Tier-2 bond for capital expansion and debt paper. We were listed on the London Stock Exchange in 2006. We expanded first into Japan and then South Korea and India because these three are Qatar’s biggest trade partners.
ADEL MUSTAFAWI Masraf Al Rayan reported a net profit of QAR1.07 billion for the first half of 2019. The bank’s long-term strategy is to maintain healthy balance sheet and key ratios; our focus is to keep higher returns on assets and equities with low non-performing financing. At present, we are one of the few banks with non-performing financing and efficiency ratios less than the market average.
How do you see the banking sector evolving in the coming years?
RS The fundamental indicators of Qatar have always been strong. Ratings agencies were skeptical of Qatar’s ability to respond to these monetary and fiscal challenges but the country’s economic sustainability became visible over time. The short-term drain in liquidity was fully measured, managed, and controlled by regulators and the government. The government managed to pump liquidity into the market, and rating agencies believed there could be an outflow of non-resident deposits. It was contestable, because we saw outflows from nonresidents in Islamic banks across borders, and even our branch in Dubai was affected. Overnight, AED7 billion was taken out. Fortunately, local banks were there for support. We took that support and beefed up liquidity to get everything back on track in three months’ time. In fact, the balance sheet was stronger than before.
AM The Qatari banking sector has evolved smoothly over the years by remaining capitalized and profitable, despite the blockade since mid-2017. To date, the combined profit of eight listed Qatari banks grew by 5.52%, which proves our assertion above. The banks get their growth impetus from the highly resilient economic environment in which they operate. The economy has been continuously growing at a solid base in all these years, aided by infrastructure spending and higher oil prices. That was the reason why Moody’s Investor Service upgraded Qatari banks’ outlook to stable from negative in 2018. Moreover, in September 2019, ratings agencies re-affirmed that same outlook for the sector.
How do you work with the government to make sure the national vision is achieved?
RS Qatar National Vision 2030 is profound in terms of human, economic, and social development. Qatar’s financial strength is sustainable in the long term, especially given its oil and gas reserves. Non-hydrocarbons are also growing in real terms, and the government is reporting a fiscal surplus this year, which is a positive sign. Enriching the model in line with the Vision 2030, we will have balanced growth and a balanced economy. Financial services should perform better and better, even though there are changing dynamics in terms of business. Fintechs are coming up, and huge reforms have taken place in the last two years. The government is working on infrastructure, free zones, PPPs, bankruptcy laws, and a new investment law. Tourism is also picking up.
AM We play an important role in helping the government to achieve its economic growth goals, especially in realizing Qatar National Vision 2030. We are transforming the local economy by continuously financing the infrastructure and industrial sectors, as well as food security for the country. The bank also invests in human capital by hiring large numbers of Qatari nationals, while also providing green finance to local business communities. In fact, as of July 2019, 52.6% of our financing book was dedicated to the government’s borrowing requirements. This helps the government to achieve all four pillars of the national vision, and hence transform Qatar into an advanced society capable of achieving sustainable development.
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