S&P Reaffirms QIB’s rating at ‘A-/A-2’ with a Stable Outlook


S&P Global Ratings (S&P) has reaffirmed Qatar Islamic Bank’s (QIB) long and short-term ratings at ‘A-/A-2’ with a Stable Outlook. The global rating agency has also upgraded QIB’s Stand-Alone Credit Profile (SACP) to ‘bbb’ (adequate) from ‘bbb-’ (moderate).

In its rating report issued today, S&P said: “QIB displayed good resilience to the economic shock in Qatar in 2020. We expect the Qatari economy will recover mildly in 2021-2022 after shrinking by 4.4% in 2020 due to the pandemic. Despite last year’s shock, we expect QIB’s asset-quality indicators will deteriorate only slightly.”

The global rating agency added: “This is underpinned by the bank’s conservative lending approach. We also expect NPFs coverage by provisions will remain very high over the next three years. Based on the bank’s resilience to the severe deterioration in its operating environment, we are revising our assessment of its risk position to adequate from moderate and the stand-alone credit profile (SACP) to ‘bbb’ from ‘bbb-‘.”

S&P also stated that they expect QIB’s capitalization to continue supporting the Bank’s credit profile, and that QIB’s risk-adjusted capital (RAC) ratio will stabilize at 13.0%-13.5%, compared with 13.4% at the end of 2020.

The rating report also confirmed that: “QIB will continue to enjoy a robust franchise in Qatar with manageable exposures to external risks in its funding profile. Our ratings on QIB also reflect our view of the bank’s robust corporate banking franchise, favorable position as Qatar’s largest Islamic bank and relatively conservative management.”

“The bank’s funding profile is dominated by core customer deposits (20% of which come from abroad with a good diversification by country). The bank has also actively tapped the Sukuk market over the past few years to lengthen the maturity profile of its liabilities. QIB’s stable funding ratio reached 118.8% at year-end 2020 and its liquidity remained adequate with about 9% of assets placed in liquid forms and another 17% mostly in Qatari government Sukuk and Qatar Central Bank Murabaha at the same date” as concluded in the report.

On QIB’s stable outlook, S&P said: “The stable outlook reflects our view that QIB’s business and financial profiles will remain broadly stable over the next 12-24 months despite the pressure on its operating environment.”

Commenting on the latest rating, Mr. Bassel Gamal, QIB’s Group Chief Executive Officer, said: “We are pleased with the reaffirmation of our rating and stable outlook by S&P, and with the upgrade of our Stand-Alone Credit Profile (SACP) to ‘bbb’ from ‘bbb-’. Despite the current global challenges, this confirms the strong financial position of Qatar, the banking sector outlook and QIB’s financial vigour, which has been steadily improving in line with our long-term strategies and objectives. It is a reaffirmation of QIB’s stability, sustainable business model, high asset quality and robust capital position.”

“We will remain committed to the highest work standards, and we will continue implementing our long-term business strategy with a continued focus to contribute to the growth of the local economy, while always being ready to navigate any potential challenges.” Mr. Bassel added.

QIB has recently announced the financial results for the year 2020. QIB has achieved net profit attributable to shareholders of QAR 3.065 Billion for the fiscal year 2020 compared to QAR 3.055 Billion for the year 2019, despite the impact of Covid-19 and the decline in oil prices. The Bank maintained the basic earnings per share at QAR 1.21. Total Assets of the Bank has increased by 6.6% compared to 2019 and now stands at QAR 174.4 Billion driven by a growth in the core banking activities. Financing activities registered a robust growth by 4.7% over 2019 to reach QAR 119.1 Billion. Customer Deposits of the Bank now stand at QAR 118.1 Billion registering a growth by 5.8% compared to December 2019.


Source: Qatar Islamic Bank