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To what do you attribute your growth and success during 1Q2013?

Net profit for the first quarter of 2013 recorded an impressive QAR395 million, as compared to QAR390 million for the same period in 2012, showing an increase of 1.4%. Loans and advances grew by 14.9% to reach QAR34.4 billion as of March 31, 2013 from QAR30 billion last year. Total assets increased by QAR4.5 billion—growth of more than 8.4%, from QAR52.8 billion on March 31, 2012 to QAR57.2 billion as of March 31, 2013. Customer deposits increased to QAR33.2 billion from QAR31.4 billion for the same period last year, registering growth of 5.9%, evidencing the strong liquidity of the bank. Despite a drop in our interest income by 1.4% in 1Q2013 when compared to 1Q2012, our net interest margin remains at 3.12% in 1Q2013 and is better when compared to our competitors. Our fees and commission income had increased by 12.7% in 1Q2013 when compared to same period in 2012. Our earnings have also increased by 1.3% in 1Q2013 in the same timeframe. Our non-performing loan (NPL) ratio has come down from 3.41% in 1Q2012, to 2.81% in 1Q2013, on account of effective risk management. The bank has become extremely strong over the years with shareholders’ funds as of March 31, 2013, at QAR8.5 billion, registering an increase of 28.8% during the last 12 months. Through the strategic utilization of the shareholders’ funds by way of increasing our performance levels, the return on average equity (ROAE) is 21.2% as of March 31, 2013—one of the best in the industry. The bank, given the scale of operations, has achieved a very high return on average assets (ROAA) of 2.81% as of March 31, 2013, which is a clear demonstration of the effective utilization of shareholders’ funds and optimum asset allocation strategies.

What sets Doha Bank apart from other local and international banks in Qatar?

We are one of the most innovative banks in Qatar. Doha Bank has launched Al-Dana 2013, which is the 10th anniversary of its Al-Dana savings program. Keeping within the theme, we will award QAR10 million in cash, 10 Mercedes E-300 luxury cars, and 10 vacation packages to the winners of its lucky draws during 2013. Doha Bank and Visa announced the completion of their latest promotion, awarding 30 cash prizes to 30 lucky winners who used their Doha Bank Visa debit cards outside Qatar in foreign currency transactions at points of sale and at ATMs. As part of its commitment to its customers, Doha Bank also allowed customers to utilize their Doha Bank Dream Loyalty Points to purchase their tickets at designated outlets where Doha Bank has exclusively installed point of sale terminals with loyalty acceptance. In another significant development, Doha Bank extended its arrangements with Indiabulls Group to offer non-resident Indians (NRIs) exclusive deals on homes. Doha Bank has again set a new Guinness World Record for having built the world’s largest soccer ball, which is currently on display in the country. We also promote green banking as a means of sustainability.

What led to the formation of TADBEER Corporate Cash Management Solutions and what is its strategic goal?

TADBEER is an integrated cash management software platform addressing a full range of collections, payments, and liquidity management, as well as reporting services. Doha Bank’s cash management solutions also include an innovative service called “SecureDoc,” which is a door-to-door document and check collection service that will accept checks (including post-dated checks) for deposit into a client’s account. Similarly, the Bank’s “SecureCash” collection service helps large volume cash businesses, such as retail stores, with a door-to-door collection service for all cash deposits. These two collection services are available anywhere in Qatar. It is designed to help clients maximize the value of their banking relationship with Doha Bank without having to visit a branch or be constrained by time or geographic access. More importantly, it helps large and small corporations better manage their finances in real time, while benefitting from a slew of value-added services. This is one of the most critical benefits that will help such clients bridge the gap between operating locally and being able to function efficiently in a globalized market. The TADBEER product would be in line with the new global formula of brick-and-click banking. Currently launched in Doha, the strategic goal would be to enable clients to access Qatar from any part of the world, as it is a web-based interface.

How do your operations here in Qatar benefit from the global outreach of Doha Bank?

The representative offices in London, Frankfurt, Istanbul, Singapore, Shanghai, Seoul, Tokyo, and Sydney are the largest network of its kind in any GCC bank. They support the growing trade finance business of the bank in all operative units, as they cover all the major trading partners of the GCC. They also support wholesale banking activities, with a focus on the large infrastructure projects in the GCC. They also enable us to participate in cross-border deals and syndications.

How would you rate the popularity of Doha Bank’s banking solutions for SMEs?

We rate Doha Bank’s SME banking solutions in the market leader category. It is our diversified product base, covering all aspects of a customer’s requirements, that has earned us this position. We cater to each and every business need, whether it is local purchase requirements, import requirements, working capital financing, or CAPEX. Short-term procurement financing for local purchases is one of the attractive products for SMEs. Our fully fledged online banking platform for customers, as well as corporate credit card propositions, add value for SMEs. We have coverage of various business segments, including trading companies, contractors, manufacturing, and service-oriented sectors like schools, restaurants, boutiques, and clinics. In addition, we assist start-up companies primarily through our tie up with QDB. We finance eligible start-up companies through QDB’s Al Dhameem scheme up to QAR15 million. When Doha Bank started servicing SME customers in 2008-2009, the SME clientele were not extremely financially savvy, nor experienced enough to even have proper accounting in place. At this stage, we had an advisory role to play; helping them to grow professionally and acting as partners in their growth. To facilitate the process, some of the initiatives that we undertook included having accounting firms to conduct sessions for our SME clients on how to prepare their budgets, partnering with CNAQ in having workshops arranged for our customers on strategic planning, providing the venue for the pioneering event of Qatar Exchange in its efforts to list SMEs on the stock exchange, just to name a few. We continue to expand our market share, and our SME customers value their relationship with the bank—irrespective of the large number of new players in the market and the tight competition. We consider our customers our greatest asset, and we value the relationship and the goodwill they maintain with us

Is your customer base comprised of mainly corporate or retail clients?

We have a mix of both corporate and retail clients. Normally, retail is large in number for banks, and this is the case of Doha Bank. In terms client numbers, approximately 10% would be from corporate and government clients and 90% would be from retail. However, as far as our loan book is concerned, 25%-30% of our loan book pertains to retail and 70%-75% pertains to corporate and government clients.

How large are your operations here in Qatar in comparison with other markets?

At the end of December 2012, operations in Qatar contributed 94% of total assets. Counterparties domiciled in Qatar comprise 78% of the group’s total credit exposure and 62% of the group’s total unfunded facilities. We have 32 branches in Qatar, three international branches, eight representative offices, and 23 electronic branches. Our representative offices are in China, Germany, Japan, Singapore, South Korea, Turkey, Australia, and the UK. Being a Qatar-based bank, Qatar will continue to remain our largest market, even though we spread our business through our branches and representative offices.

What is your outlook for the Qatari banking sector in the short term?

In April, the IMF revised the economic growth rate for Qatar to 5.2% in 2013. The non-hydrocarbon sector is expected to grow by 9.6% in 2013. By the end of 2013, service activity is expected to contribute more than 60% of the total growth in Qatar’s economy. Construction activity is also expected to perform strongly this year. In 1Q2013, lending in the Qatari banking sector grew by almost 1.5% year to date. The retail and contract segments are the key sectors that have driven growth this year. Lending is expected to pick up in the contract financing, government, and SME sectors.

© The Business Year – October 2013