October 2019 - Doha Bank Qatardohabank.qa/wp-content/uploads/sites/12/DB-Investor...40 287 35 173 27 322 133 28 141 30 171 13 3 Qatar Economy Source: 1. IMF World Economic Outlook

October 2019Investor Presentation

1

Overview of Doha Bank

• Incorporated in 1979, Doha Bank is the third largest local conventional bank by assets in Qatar with a market share of approximately 7.2%(1)

and assets totaling QR106.7bn

• Doha Bank has a strong domestic franchise with the 2nd largest conventional retail footprint with 24 local branches, 7 e-branches including pay offices, and around 90 ATMs as at 30th September 2019

• Doha Bank has one of the largest international networks of the Qatari banks through branches located in UAE (Dubai and Abu Dhabi), Kuwait and India (Mumbai , Chennai & Kochi) and representative offices in Singapore, Turkey, Japan, China, United Kingdom, South Korea, Germany, Australia, Hong Kong, Canada, South Africa, Bangladesh, Sri Lanka and Nepal

• Doha Bank, leveraging its network, has a strong market presence in contract financing (29% market share), trade loans (11% market share) and real estate (12% market share) and has been fast growing (8% net loans CAGR since 2009)

• The bank operates principally through four business groups: Wholesale Banking, Retail Banking, International Banking and Treasury & Investments

• Doha Bank’s long-term local and foreign currency rating was assessed at A3 / BBB+ / A / A by Moody’s, S&P, Fitch and Capital Intelligence respectively

20

21

1 Qatar2 Dubai - UAE3 Abu Dhabi - UAE4 Kuwait City - Kuwait5 Mumbai - India6 Kochi - India7 Chennai - India8 London - UK9 Frankfurt - Germany10 Istanbul - Turkey11 Singapore12 Shanghai - China13 Seoul - S. Korea14 Tokyo - Japan15 Hong Kong - China16 Sydney - Australia17 Toronto - Canada18 Johannesburg - South Africa19 Dhaka - Bangladesh20 Colombo - Sri Lanka 21 Kathmandu - Nepal

Qatar Holding LLC(a subsidiary of QIA)

16.7%

OtherShareholders

83.3%

Source: Company information, Doha Bank estimates based on public information and QCB dataNote: 1. Measured as a percentage of the aggregate assets of the banking sector in Qatar as at 30 September 2019

Second largest conventional Retail

footprint

Largest internationalnetwork of representative

offices among Qatari banks

Strong position in select business linesincluding contract financing, trade finance, real estate and retail

Strong international footprintKey highlights

Diversified shareholder base and strong support

Source: QCB banks’ monthly statements and annual reports

2

Banking sector

Loan market size (QRbn) and Doha Bank market share (%) Qatari banking system – Total Loans Vs Deposits (QRbn)

Total Deposit Total Loans

• A leading franchise in real estate, contract financing and trade

• Well diversified loan portfolio

• Worldwide network of representative offices in key locations

• Strong and prominent brand recognition in Qatar

• First to introduce many innovative products and services in Qatar

• Many of the Board members belong to the ruling ‘Al Thani’ family

Comments:- Market Share

Government loans

Total loans

Services*

Real estate loans

Trade loans

Retail loansContract financing

996

832

940

810

911

823

844

727

753

650

653

601

2014 2015 2016 2017 2018 Q3-19

Doha Bank market share as of 30 September 2019

* Includes Non-Banking Financial Institution

Loan market size as of 30 September 2019

1.9%

302

4.9%

204

11.6%

154

6.7%

956

11.3%

133

6.6%

132

29.0%

38

40

287

35

173

27

322

133

28

141

30

171

13

3

Qatar Economy

Source: 1. IMF World Economic Outlook Database (October 2019) 2. British Petroleum Statistical Review of World Energy (June 2019)

3. Qatar Economic Outlook December 2018 4. Qatar monthly statistics - Planning and Statistics Authority (September 2019)

Government fiscal surplus/deficit (% of GDP)Stable economic situation

Sovereign rating: AA- (Stable) by Fitch / AA- (Stable) by S&P / Aa3 (Stable) by Moody’s

Gas reserves:Qatar has the 3rd largest reserves of natural gas in the world(2)

Oil reserves: 25.2bn barrels of proven oil reserves(2)

Current account balance:Surplus of 6.0% in 2019(1) and 4.1% in 2020(1) of nominal GDP

Forecasted real GDP growth: 2.0% in 2019(1) and 2.8% in 2020(1)

Population: 2.75 million as at 30 September 2019(4)

GDP per capita:With US$69,687 in 2019 Qatar is one of the wealthiest countries in the world(1)

Government fiscal position: Estimated surplus of 5.1% of GDP in 2019(3)

Government gross debt: QR371.5bn (53.2% of GDP) in 2019(1)

Significant future government & infrastructure spending:

Significant investments in the run up to hosting the 2022 FIFA World Cup and achieving the 2030 Qatar National Vision (e.g. gas projects, airport, rail, infrastructure, housing)

Currency: Pegged to the U.S. dollar since 1980

Qatar enjoys one of the highest GDP per capita at US$ 69,687 in 2019(1) and has a strong historic economic growth

2014/15 2015 2016 2017 2018 2019

15.0%

5.0%

-5.0%

-15.0%

-6.6%

Source: QCB annual reports & QCB Quarterly Statistic BulletinsNote: The above data until 2014/15 is for the fiscal year from 1 April – 31 March

Government revenues (QRbn)

Oil & Gas revenues** Miscellaneous Transferables revenues WTI Crude Oil Price ($/brl)

Source: Government revenues: QCB annual reports & WTI Crude oil Price: Bloomberg report - September 2019Note: * Preliminary data covers 9 months (1/4- 31/12/2015) where the period has been extended as

per Law No. (2) for the year 2015 for amending the fiscal year to a calendar year. ** Oil & Gas Revenue includes investment revenue transferred from Qatar Petroleum.

14.5%

-9.2%

-0.7%

5.1%2.2%

13/14 14/2015 2015* 2016 2017 2018

400

300

200

100

0

250

200

150

100

50

0

4.6%

4

Qatar Economy

Upcoming projects and economic development have attracted an influx of expatriate labor and benefited the economy

Mining and Quarrying Real EstateWholesale, Retail and other servicesManufacturing Public administrationTransportation and storageConstruction OthersFinancial and insurance activities

Infrastructure projects in Qatar

2022 FIFA World Cup

• FIFA World Cup Football Stadiums (2020)

• Msheireb Properties - Msheireb Downtown Doha (2020)

• Education City (2020)

• ASHGHAL - Expressway Programme (2021)

• QP - Bul Hanine Field Redevelopment Project (2021)

• UDC - Pearl Qatar (2022)

• Qatargas - North Field Gas Expansion (2022)

• ASHGHAL - Local Roads & Drainage Program (2022)

• QatarGas - Barzan Gas Development (2023)

• LREDC - Lusail Development (2025)

• NPP - Hamad Port (2025)

• Barwa Real Estate - Barwa Al Khor Development (2025)

• QFZA - Qatar Economic Zone (2025)

• QRAIL - Qatar Integrated Rail Project (2026)

• Kahramaa - Water Security Mega Reservoirs (2036)

• ‘2022 FIFA World Cup’ is expected to draw around half a million visitors, circa 19% of Qatar’s current population

3rd largest reserves and 2nd largest exporter of natural gas

Development of GDP composition 2014–2018*

Natural gas reserves (2018) Export of natural gas in 2018 (cubic meters bn)

2014 2018*

Others29.6%

UAE3.0%

Saudi Arabia3.0%

Turkmenistan9.9%

US6.0%

Qatar12.5%

Iran16.2%

Russia19.8%

#3

250

200

150

100

50

0

248

125 121

77

32

Russia Qatar Norway Canada Netherlands

#2

Infrastructure projects & events to benefit from theNational Vision 2030

Source: British Petroleum Statistical Review of World Energy (June 2019)

Source: Business Monitor International, research reports

52.5%

6.3% 8.5%

6.8%

6.0%

7.4%

4.0%

7.0%

15.0%9.2%

36.1%

5.4%

10.1%

6.7%

6.4%

2.1%5.9%

Source: QCB Quarterly Statistical Bulletin – June 2019Note: * Preliminary estimates

5

Financial Summary

Capital

Profitability (QR Mn) Assets and Liabilities (QR Mn)

Q3 2019 Q3 2018 YoY

Interest income 3,148 2,934 7.3%

Interest Expense (1,652) (1,331) 24.2%

Net interest income 1,496 1,603 -6.7%

Fees and commission 307 286 7.5%

Foreign exchange gain 85 89 -4.2%

Income from investment securities 191 (1) -

Net income from insurance activities (58) 7 -

Other income 59 46 28.7%

Staff Cost (363) (389) -6.7%

Non Staff cost (306) (357) -14.4%

Provision (592) (547) 8.5%

Net Profit 819 737 11.0%

Q3 2019 Q4 2018 Q3 2018 YTD YoY

Total Assets 106,746 96,132 90,367 11.0% 18.1%

Loans and Advances 65,003 59,844 59,215 8.6% 9.8%

Investments 27,765 20,727 20,286 34.0% 36.9%

Customer Deposits 58,897 55,785 52,165 5.6% 12.9%

Total Equity 13,455 12,733 13,050 5.7% 3.1%

Q3 2019 Q4 2018 Q3 2018

RWA (QR Mn) 79,068 77,173 76,058

CET 1 Ratio (%) 10.62% 10.66% 10.68%

T1 Ratio (%) 15.68% 15.84% 15.94%

Total Capital Ratio (%) 16.85% 17.01% 17.10%

6

Corporate banking

• A significant contributor to the total income of Doha Bank

• Evolved to be one of the core competencies of the bank and will be one of the major growth areas of the Bank

• Targets local and international companies

• Well diversified portfolio focused on private sector

Comments:

Real estate

Trade

Contract financing

Services

Loans (QRbn)Overview of the corporate banking loan book - September 2019

Source: Company information

Non-bankingfinancial institutions

2.8%

Services 14.8%

Trade 26.7%

Contracting 19.8%

Real estate 31.6%

Others 3.0%

Industry 1.3%

9.8 8.411.6 10.1

14.510.7

18.3

11.0

18.5

10.5

17.8

11.2

2014 2015 2016 2017 2018 Q3-19

CAGR (2014 – Q3-19) : 13%

8.8 9.4 9.711.6

13.415.0

2014 2015 2016 2017 2018 Q3-19

CAGR (2014 – Q3-19) : 12%

2014 2015 2016 2017 2018 Q3-19

CAGR (2014 – Q3-19) : 6%

3.3

6.16.8

6.4

8.4

7.3

2014 2015 2016 2017 2018 Q3-19

CAGR (2014 – Q3-19) : 22%


Total : QR56.3bn

7

Real Estate

Qatari market real estate loans (QRbn)Real estate market share development

Source: Company information and QCB data Source: QCB banks’ monthly statements and annual reports

11.6%

Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19

% of total September 2019 loans portfolio

40.451.0

76.285.6 85.4

95.7

125.7135.0

151.5 153.5147.3

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3-19

CAGR (2009 - Q3-19) : 15%

• Conservative regulatory environment with real estate lending limits well defined

• Loan portfolio is highly collateralized at circa 170%

Comments:

25%

Market Share

8

Contract Finance

Qatari market contract financing loans (QRbn)Contract financing market share development

Source: Company information and QCB data Source: QCB banks’ monthly statements and annual reports

Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19

13.0

18.416.2 18.2

23.3

32.0

38.937.0 38.4

40.5 40.1

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3-19

CAGR (2009 - Q3-19) : 12%

• Doha Bank’s high market share benefits from strong relations with key contractors through Doha Bank representative offices (eg. Turkey, South Korea, Japan, Germany)

• Doha bank is looking to reduce its market share in this segment

Comments:

• The contract financing sector is set to benefit from planned infrastructure spending in Qatar as well as the ‘2022 FIFA World Cup’

Comments:

29.0%

16%

Market Share % of total September 2019 loans portfolio

9

Qatar1978

Dubai2005

Istanbul2006

Singapore2006

Shanghai2007

Tokyo2007

Kuwait2008

London2008

South Korea2008

Abu Dhabi2011

Frankfurt2011

Sydney2012

Toronto2013

Hong Kong2013

Mumbai2014

Johannesburg2015

Kochi2016

Dhaka2016

Chennai2018

Colombo2018

Kathmandu2018

International Presence

Increasing international reach

International asset evolution (QRbn)Timeline of international expansion




• 2005: Doha Bank established a representative office in Dubai

• 2006: Representative offices in Singapore and Turkey commenced operations

• 2007: First full branch outside of Qatar – in Dubai (upgraded from a representative office to a branch). Representative offices were established in Japan and China

• 2008: Kuwait branch was established. Representative offices in the United Kingdom and South Korea were established

• 2011: Representative offices were established in Abu Dhabi and Germany

• 2012: A representative office was opened in Australia. Abu Dhabi representative office was upgraded to a full branch

• 2013: Representative offices were established in Hong Kong & Canada

• 2014: Opened a branch in Mumbai, India and first e-branch in Dubai

• 2015: Acquired 2 new branches in India (Mumbai & Kochi) from HSBC Oman and a representative office opened in South Africa

• 2016: Representative office was established in Bangladesh

• 2018: Commencement of Chennai Branch. Representative Office established in Sri Lanka and Nepal

14.216.0 16.5

14.8

11.911.6

2014 2015 2016 2017 2018 Q3-19

11% of total assets

10

Leading and innovative retail franchise


• Qatar Exchange Traded Fund (QETF)• Expansion of digital customer service

through what’s app, Hello Doha and FB messenger

• Doha Sooq—Ecommerce platform• Digital loan on-boarding• Whatsapp Chat service• Biometric authentication in Mobile

Banking

Innovative range of retail products Distribution channels: Innovative and increasing efficiency

Strong reputation for new and innovative products and strong brand quality

Second largest conventional retail footprint in Qatar

Transactional / Deposit accounts

• Doha Bank offers a wide range of accounts to its customers, including term deposit accounts, call accounts, payroll accounts and various accounts of different maturities & yields

• Doha Bank Offers New Debit Cards with contactless, secure online payment capability along with Doha Miles

• Doha Bank also offers special products for salary transfers

Loans • Personal and Vehicle loan products are available to customers, who transfer their salaries to the bank, for up to six years (Qataris) and four years (Expatriates)

• Mortgage loans are tailored to suit individual needs with competitive interest rates. Available for eligible customers in Qatar and other selected markets

Expatriate banking

• The division is focused on Qatar, UAE, Kuwait and India and offers cross-border remittances, wealth management and off-shore banking services

Credit cards • The Bank Offers an extensive range of credit cards including Contactless Cards

Private banking

• Offer privileged services such as Home Service, Real Estate Advisory, Global emergency cash access services, brokerage services

• Products include capital protected close-ended investments, Visa Infinite Credit Card, Mortgage Lending in UK and Kuwait, leveraging on local tie-ups

Branches • Second largest conventional retail in Qatar widespread throughout the country

• Full service branches in Abu Dhabi, Dubai, Kuwait and India

ATMs • Network of around 90 ATMs throughout the country• The Bank has many ATMs with multi functional capabilities

Internet banking

• Doha Bank has the award winning first bilingual website in Arabic and English amongst the banks in Qatar

• Doha Bank has launched the New online portal for customers with enhanced features including E- Statements and Activation of Credit & Debit Cards through Online & Mobile Banking

E-shopping portal

• Doha Sooq (e - commerce website) - first ‘online shopping mall’ offered by a Qatari bank

Mobile banking

• Grants access to bank account details and enables instant transfer of funds, paying registered utility and credit card bills, recharging pre-paid mobile or internet services and viewing current exchange rates along with in-app notifications

Conventional Bank Islamic Bank

60

QNB Doha Bank* QIB Rayan Ahli

31 3117 14

Source: Respective banks’ websiteNote: * Includes E-Branches & Pay offices

Doha Bank was the first to introduce many products & services in Qatar such as:

#2

CBQ

30

• Apple iWatch Banking Application and Tablet Banking

• Al Dana Savings Scheme• Co-branded credit cards and travel

cards• Gold bar sales• Green Banking (including ‘Green

Mortgage’ Home Loan Product and Green Car Loan)

1.00%

0.37%

1.52% 1.41%1.59%

0.81%1.38% 1.45%

678593

55120

417448

630

952

11

Credit Quality

Total Reserves* for loans & advances divided by impaired loansNPL evolution

Net impairment loss on loans and cost of risk*

3.61%3.98%

4.29%

5.05%5.84% 5.78% 5.83% 5.65%

2,2592,560 2,684

3,236

3,802 3,681 3,856 3,991

2017 Q1-18 Q2-18 Q3-18 2018 Q1-19 Q2-19 Q3-19

2017 Q1-18 Q2-18 Q3-18 2018 Q1-19 Q2-19 Q3-19 2017 Q1-18 Q2-18 Q3-18 2018 Q1-19 Q2-19 Q3-19NPL (QRmn) NPL %

Net Impairment loss on loans (QRms) Cost of Risk %

Total Reserves for loans & advances Total Reserves for loans & advances/impaired loans




186% 169% 171%150%

138%137% 136% 141%

4,190 4,323 4,5784,846

5,233 5,048 5,2635,640

* Includes expected credit losses for 2018 & 2019 (Note: 2017 includes risk reserves)

* Includes expected credit losses (ECL) as per IFRS 9 for 2018 and 2019

(0.7%)

1.3%

3.3%

5.3%

-250%

-200%

-150%

-100%

-50%

0%

50%

100%

150%

200%

(1.90%)

(0.90%)

0.10%

1.10%

2.10%

12

Credit quality in Doha Bank‘s core businesses and by geography

Corporate NPL ratio Contracting NPL ratioReal estate NPL ratio Retail NPL ratio

NPL per geographical location - September 2019

Qatar GCC India

2.4% 2.1%

28.5%

Consolidated

5.7%


2016 2017 2018 Q3-19 2016 2017 2018 Q3-19 2016 2017 2018 Q3-19 2016 2017 2018 Q3-19

• Real estate NPL% is almost nil

• GCC branches showing significantly high NPL%

• Corporate and Contracting NPL% increase mainly attributable to exposure from GCC branches

• Qatar operation’s NPL% remains low

Comments:

0.1% 0.1%0.2%0.2%

4.2%4.6%

8.1%

7.3%

3.8%

4.7%5.0%

4.8%

6.8%7.9%

11.6%

15.9%

13

High margin and high dividend yield

Cash dividend (QR per share)Net interest margin %

Attractive dividend yield

Source: Company information & Bank’s Annual Financial Statements

4.5

4.0

3.0 3.0

1.0

2013 2014 2015 2016 2017 2018

Source: Company informationSource: Company information

2011 2012 2013 2014 2015 2016 2017 2018

• Historically high dividend yield as compared to competitors

• 2018 Dividend reduced in order to enhance capital ratios

Comments:

7.0%

7.1%

2.6%

4.6% 4.1%

2.2% 3.5%

1.8%

2.8%

3.1%

8.5%

5.1% 7.7%

0.0%

3.8% 3.5%

2.8%

9.0%

7.8% 7.0%

8.4% 8.7%

4.5%

10.5%

Doha Bank QNB CBQ

3.0

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

2017 Q1-18 Q2-18 Q3-18 2018 Q1-19 Q2-19 Q3-19

2.50% 2.44% 2.41% 2.37% 2.24% 2.09% 2.00% 2.01%

14

Diversified loans and deposits


• Doha Bank has maintained a very well diversified loan mix

• Doha Bank consistently ensures it retains a diversified deposit and funding base to minimize concentration risks

• Qatar Central Bank (QCB) imposes certain credit concentration limits on regulated banks in Qatar and the Bank follows QCB’s credit concentration policy

• Those credit concentration limits impose restrictions such as single obligor limits as well as restrictions on real estate lending

Comments:

By sector – September 2019 By type – September 2019

Loans LoansDeposits Deposits

Total loans: QR65.0bn Total loans: QR65.0bnTotal deposits: QR58.9bn Total deposits: QR58.9bn

Industry 1.1%

Services 11.8%

Individuals 20.1%

Trade21.3%

Contract Financing 15.8%

Retail 12.3%

Non-banking financial institutions

2.3%

Government and related agencies

8.0% Government and related agencies

41.4%

Retail 12.3%

Corporate 79.7%

Government and related agencies

8.0%

Current and Call Deposits 18.4%

Term Deposits 77.6%

Savings Accounts 4.0%

Real estate 25.2%

Others 2.2%

Non-banking financial institutions

3.5%

Corporate 35.0%

15

Investment Book

Investment portfolio – split by type – September 2019 (%)Portfolio overview

Investment portfolio (QRmn)

• Conservative investment philosophy -Low hard limits for discretionary trading / investments

• Majority of portfolio in local sovereign fixed income

• State of Qatar portfolio repo-able with central bank to the extent liquidity is needed

• Conservative investments limits linked to Tier 1 capital as per QCB

• Investment portfolios are re-classified and re-measured post adoption of IFRS 9 with effect from 1 January 2018

9,856

12,198

14,706

17,513

27,765

20,727

2014 2015 2016 2017 2018 Q3-19

Source: Figures are sourced from Annual Reports and Quarterly Financials

Total (QR27,765mn)

Other debtsecurities21.4%

State of Qatar debt securities

76.3%

Mutual funds 0.2%Equities

2.1%

FVOCI (QR18,637mn) Amortised Cost (QR9,008mn)




70.2%


89.7%

Equities3.0%

Total liabilities and equity: QR106.7bn

Other borrowings 6.7%

Customer deposits 55.2%

Other liabilities5.1%

Equity12.6%

Due to banks 20.0%

16

Liquidity and Capitalization

Evolution of tier 1 and capital adequacy ratioFunding mix – September 2019

Loan to Deposit ratio (%) - September - 2019



14.7%15.4%

15.7%15.8%15.4%

17.4%

11.8%10.4% 10.6%10.7%10.4%

12.3%

2014 2015 2016 2017 2018 Q3-19

15.0% 15.7% 15.6% 16.8%17.0%17.5%

Tier 1 ratio CET 1 ratio % Total CAR

Source: Company informationNote: 2014 onwards based on Basel III

DB System CBQ Ahli Rayan QIB QNB

• Doha Bank has a diverse funding profile including a mixture of retail, wholesale, interbank, long term liabilities and shareholder funds

• The bank maintains holdings of QR21.2bn of State of Qatar bonds

Comments:

Debt securities 0.4%

110%120%

99%100%

119%120%113%

17

Doha Bank strategy – Clear path to future growth


• Maintain conservative and cautious approach to underwriting in particular with regards to contracting sector

• Continue improvement in risk management procedures and systems

• Doha Bank intends to further continue its targeted international expansion strategy

• Expand and further leverage the trade finance business through the network of representative offices, by further developing relations with companies doing business with countries where we have our presence

• Leverage on strong existing distribution channels to expand loan book, generate more revenues and improve efficiency

• Identify areas of potential operational and cost efficiency improvements

• Leverage on latest digital technologies to increase operational efficiency

• Further develop existing operations and position Doha Bank at the center of the infrastructure growth in the economies where we operate

• Doha Bank is positioned to capture the upcoming infrastructure growth in Qatar

Improvecredit quality

Furtherimprove

efficiency

Continue targeted international

expansion

Furtherconsolidate Qatari

position

Further develop International

branch network

18

Concluding remarks

Source: Company informationNote: 1. Ranked by assets, excluding Islamic banks

2. 2009 – Q3-19 CAGR of Doha Bank’s total assets

Strong regulatoryenvironment aligned

with internationalbanking standards

Backdrop of a strong macro-economic

environment

Proactive and supportive sovereign

Strong Bond Recognition

Strong investment grade credit ratings

Stable liquidity

Strong shareholder base

3rd largest conventional Qatari bank (1) with

strong retail footprint in Qatar

Highly experienced management team

Prime player in Qatari banking market,

growing at c.7% pa (2)

www.dohabank.com

Documents

October 2019 - Doha Bank Qatardohabank.qa/wp-content/uploads/sites/12/DB-Investor...40 287 35 173 27 322 133 28 141 30 171 13 3 Qatar Economy Source: 1. IMF World Economic Outlook