Posted on April 14, 2018

Capital Intelligence (CI), the international credit rating agency, has affirmed Qatar Islamic Bank’s (QIB), Qatar’s leading Islamic Bank, Financial Strength Rating (FSR) at 'A' with a stable outlook, Long- and Short-Term Foreign Currency Ratings (FCRs) are affirmed at ‘A+’ and ‘A2’, respectively.

The FSR is supported by good overall capital adequacy including a strong and improved CET-1 ratio, generally good asset quality, and improved estimated net financing margin and operating profitability, which is underpinned by a low-cost base. QIB’s position as the leading Islamic bank in Qatar is also a supporting factor given the demonstrated preference amongst Qataris for personal banking on a Sharia’a-compliant basis. The CI reiterated, “Encouragingly, QIB now has a liquidity coverage ratio substantially in excess of both current and future regulatory requirements and a good net stable funding ratio, the two ratios to which banks in Qatar increasingly manage their liquidity.”

The CI reported cited ”As well as reflecting the Bank’s generally strong financial profile, these ratings are also supported by the robust growth potential of the economy and ongoing demonstrated government support for all Qatari banks. Based on the strength of the Qatari government balance sheet, the Support Rating is affirmed at ‘2’. The economy in Qatar has shaken off the initial negative impacts of the blockade and appears to have fully adjusted to the need to change supply chains and logistical arrangements. The general picture is of a return to normality. With oil prices appearing to having stabilized towards the exceeded government revenues have exceeded earlier expectations. The Qatari government has also announced a major expansion project for gas production. This will commence in 2019 and begin adding to output in 2022, reaching full capacity in 2024. This should allow strong growth in the private and non-hydrocarbon sectors of the economy to continue.”

Over the past 2 weeks, major rating agencies have affirmed the Bank’s positive ratings for long-term credit ratings and financial strength ratings.Earlier this month, S&P affirmed QIB’s issuer credit rating at ‘A-‘, followed by Fitch who affirmed QIB’s Long Term IDR at ‘A’.