Qatar First Bank L.L.C. (Public), a leading Shari’ah compliant bank based in Qatar and listed on the Qatar Stock Exchange (QSE), has released its financial results for the half year ended 30 June 2016 recording revenue increase by 46% to QAR 353 million (US$ 97 million) and net profit to QAR 16.8 million (US$ 4.6 million).
Mr. Ziad Makkawi, Chief Executive Officer, QFB said: “I am pleased to report that we have achieved a revenue of QAR 353 million and net profit of QAR 16.8 million. As we look to the year ahead, we envision that the global economic backdrop will remain challenging specifically as the GCC region adjusts to lower oil prices and slowing economic growth. However, we will continue to push ahead with our expansion strategy into banking and adopt an opportunistic outlook to source viable investment opportunities and generate sound returns for our clients and shareholders.”
“The first half of 2016 saw the completion of a major milestone for the bank when we listed on the QSE on the 27th of April 2016, delivering on our promise to shareholders, who have supported the Bank since its inception.” He added.
The significant milestone marked the first listing of a Qatari entity licensed by the Qatar Financial Center (QFC) and the first listing for a private entity in 6 years. This remarkable achievement marked the next step in Qatar’s efforts to reactivate Qatar’s stock market and encourage the participation of the private sector in all aspects of the Qatari economy and in particular the banking sector.
In parallel with its listing on the QSE, QFB has simplified its structure to create greater efficiencies and increase overall effectiveness. The Bank introduced an action plan in 2016 focused on optimizing the Bank’s resources and raising its efficiency levels. Additionally, QFB has strengthened its international reach and developed deeper access to key markets by signing with leading players that complement and boost the offerings.
Makkawi added: “QFB is at the beginning of a new era. The introduction of our efficiency optimization plan and the commitment to our strategy resulted in a stronger team with a unique combination of knowledge and regional execution capabilities, as well as a healthier and more efficient balance sheet.”
Business Update
Despite regional financial markets continuing to operate at restrained levels, all of the Bank’s revenue-generating business lines have successfully positioned themselves to capture new business and solidify relationships with existing clients.
During 2016, the Alternative Investments department continues the implementation of its strategy, with the aim of strengthening the Bank’s position as a trusted advisor and gateway for investors who wish to invest in innovative, Shari’ah compliant, private equity and real estate investment opportunities in local, regional and global markets. Meanwhile, the private equity investments continued to grow in value recorded QAR 13 million in dividends from portfolio companies. English Home, QFB’s Turkey-based home textile chain, expanded its geographic footprint, increasing its number of stores in Turkey from 271 as of December 2015 to 293 as of June 2016, and internationally it expanded from 72 stores as of December 2015 to 89 as of June 2016. The Bank’s subsidiary, Al Wasita Emirates for Catering and Services, successfully increased its capital to AED 80 million, from existing shareholders, to further strengthen the company’s financial position and continue its expansion. QFB’s investment in Qatar’s Food Services Company continued to deliver good results with the company opening new stores across Qatar.
The Bank also continued to support the London-based luxury jeweller David Morris in its expansion plans. A flagship store in Rue St Honore in Paris is scheduled to open later this year, along with a new dedicated boutique in Qatar’s Pearl in partnership with the Bank’s local partners. Memorial Health Group continued to progress the construction of its new hospital in Bahçelievler – Istanbul. The new hospital will be among the largest private hospitals in Istanbul comprising 70,000 sqm and 300 beds. During the first half of the year, QFB announced the completion of its development in Leinster Square, London W2; the Bank’s second real estate development in London after Westbourne House project completed during 2015. Leinster Square is an exclusive development of five stunning 3 and 4 bedroom townhouses and six 3-bedroom lateral apartments, of which only two remain.
On the Corporate & Institutional Banking front, QFB’s team has been able to successfully maintain a growing portfolio offering clients a wide range of Shari’ah compliant financing products and liability solutions including Wakala, Murabaha, Ijara, Istisna’a and others. The Bank’s client base encompasses government, private and public entities belonging to a diverse set of economic sectors such as trading, manufacturing, healthcare, private equity, retail, real estate and contracting, etc. The team has not only been able to grow the Bank’s local asset and liability book, but has also successfully established footprints in the regional GCC market via lucrative syndicate deals. Currently, the Bank has grown its financing portfolio by more than 27% to QAR 1.4 billion. To further strengthen QFB’s position and expand the client base, the Bank’s team is heavily involved in product development and service improvement. Additionally, the team successfully added a new revenue stream by placing investment products with their corporate cleints; demonstrating the synergies between departments – a hallmark to QFB’s strategy.
On the Private Banking & Wealth Management front, QFB announced the development of a pioneering open Shari’ah compliant architecture private banking platform, supported by an exceptional international network of partners. By leveraging the in-house and international breadth of investment solutions across asset classes, the new platform empowers the team to opt for a client centric approach whereby the investment advice is personalized to the financial goals and risk profile of the client. Additionally, the team signed an agreement with the world’s second largest publicly traded commercial real estate brokerage firm and UK’s largest UK property advisor in order to offer shareholders and clients the ability to source real estate opportunities based on their specific requirements and budget. The private banking female and male relationship managers were able to generate fee income from HNWI and private family offices by placing the Bank’s range of structured products.
The Treasury & Investments department continued to focus on managing and optimising the Bank’s liquidity through the onshore and offshore interbank markets. Additionally, the team was actively involved in investing and managing the Bank’s Sukuk book. Moreover, the Bank has expanded the team, to cover Structured & Investment products, with the objective to extend the current range of innovative Shari’ah compliant offerings to clients, while focusing to meet the changing needs and wants of shareholders, private and institutional clients. The team provided clients with attractive investment opportunities such as an Ijara product in the aviation industry. Besides, the team has built its capabilities to also provide Liability hedging solutions, Islamic investment notes and an actively managed Money Market fund.
Makkawi added: “Despite challenging global economic conditions, regional market volatility and geopolitical tension, we continued implementing our strategy that streamlined the businesses to offer top-class Shari’ah compliant services including corporate & institutional banking, private banking & wealth management, as well as alternative investments with a focus on private equity and real estate. I would like to thank our board of directors, headed by Mr. Chairman Abdulla bin Fahad bin Ghorab Al Marri, for their continued support.”
“We will continue to invest in the coming years while focusing on achieving our objectives in a timely manner. I am now confident that QFB has all the ingredients to continue delivering on its promise to grow the business, expand its offerings, and provide a ‘Signature of Excellence’.” He added.
Reaping the awards
Reaping the benefits of its ambitious strategy and efficiency optimization plan, the Bank went on a winning streak of awards and recognitions that started in April, with QFB being exclusively named 2016’s ‘Best Up-and-Coming Islamic Financial Institution’ in Global Finance magazine’s ninth annual awards for the World’s Best Islamic Financial Institutions. The Bank won the prestigious award after Global Finance had extensive consultations with bankers, corporate finance executives and analysts throughout the world.
The sought-after title was shortly followed by QFB’s recognition as the ‘Best Shari’ah Alternative Investment Platform’ for 2016 by ‘Wealth & Finance’ in this year’s ‘Alternative Investment Awards’, marking its hard work and innovative efforts in helping shape the industry.
The 2016 Alternative Investment Awards honored the dedicated individuals and businesses that are making a positive impact in a constantly-evolving marketplace and shed a spotlight on the key players in the sector, following a comprehensive selection and judging process designed to single out the true market leaders of the year.
Additionally, The Asset, Asia’s leading financial publication for issuers and investors, honored QFB the awards of ‘Bank of the Year, Qatar’ and ‘Best Private Bank, Qatar’ at ‘The Asset Triple A Islamic Finance Awards 2016’.
Makkawi concluded: “As the global investment market continues to go through major challenges, 2016 remains to be a year of transformation for QFB.”
