Moody’s confirms QIIB’s credit rating at “A2 / Prime-1”

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Doha: Moody’s rating agency announced that it had assigned QIIB an “A2” rating with a stable outlook, noting that QIIB enjoys many advantages that outweigh its financial strength and entitlement to it. high degree.

Regarding the rationale for its rating, Moody’s said, the rating reflects its position as one of Qatar’s leading Islamic financial institutions, particularly in the retail segment; and the quality, profitability, liquidity and capitalization of solid assets. Issuer ratings include a very high probability of support from the Qatari government (stable Aa3).

Moody’s has indicated that QIIB enjoys high asset quality which is supported by exposure to assets of the Government of Qatar and quasi-government entities, which are of relatively high credit quality and have historically demonstrated interest rates. zero faults.

In its analysis of QIIB, Moody’s indicated that the bank enjoys a strong funding profile supported by the privilege of having a significant market share in the retail sector of approximately 9.2% of total personal loans in Qatar, which also supports QIIB’s healthy margins and provides a solid base of low-cost deposits.

The rating agency noted that QIIB’s capital adequacy ratio under Basel III guidelines was high at 16.6% (as of September 2021), which is well above the regulatory limit of 10. , 5%, and expects QIIB’s capital position to remain strong. at levels above both the local and global medians.

Moody’s explained that one of the factors supporting QIIB’s strong capital is its strong profitability, which is supported by the net profit margin, which has remained stable at the 2.2% level in the first nine months of 2021.

Moody’s noted that QIIB enjoys a strong advantage in terms of Islamic deposits, as the bank has historically maintained the lowest ratio of net funding to customer deposits among its Qatari counterparts since 2011.

In addition, QIIB maintains high liquidity, so the bank’s liquid assets to total assets ratio remained strong at 32% in September 2021, which compares favorably to the Qatari banking sector average of 22%.

Commenting on Moody’s assertion of QIIB’s credit rating at “A2” with a stable outlook, Managing Director Dr Abdulbasit Ahmed Al Shaibei said, “We are pleased with this high rating from Moody’s for two main reasons. First, it reflects QIIB’s ability to keep pace with the strength of the prosperous Qatari economy and growth in its various sectors, especially the banking sector, and second, this memo confirms that we are moving in the right direction in the implementation of our interim and strategic strategy. plans.”

He said: “The Moody’s report and its many positive points which confirm the strength of QIIB indicate that the bank has been able to successfully cope with emergency and difficult situations in the market, especially with regard to the repercussions of the Covid-19 pandemic. QIIB quickly adapted its work to the needs of the market and the demands of its clients, which positively reflected in the improvement of the bank’s performance and various other indicators.

“In the area of ​​digital transformation, a broad strategy focused on the transition from traditional banking to digital has been implemented. The level of achievements in this regard during the past period has been high and the results outstanding, perhaps the most important of which has been the tangible improvement in operational efficiency, as well as the expansion of the customer base of the Bank.

“While continuously monitoring our customer satisfaction, which remains high, we are determined to further improve the level of service we provide to our customers. We will continue to improve our digital services, which technology can provide.

The CEO underlined: “We wish to strengthen our strategy – both locally and abroad with due diligence, while maintaining the vitality of the banking business and its ability to be flexible by taking advantage of the great opportunities offered by the Qatari economy in its various sectors. We will do this by focusing on the financing of high feasibility projects and at the same time contributing to the development of the economy and society as a whole.

“QIIB will continue to implement carefully considered plans with the aim of improving the various financial indicators of the bank, maintaining the highest credit ratings and actively engaging with the business sector in order to contribute to the growth of the Qatari economy, ”added Dr Al Shaibei. .

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