Investor Presentation August 2015

Transcription

1 Investor Presentation August 2015

2 Overview of Doha Bank Key highlights Strong international footprint Incorporated in 1979, Doha Bank is the third largest local conventional bank by assets in Qatar with a market share of approximately 7.7% (1) and assets totalling QR82.7bn. Doha Bank has a strong domestic franchise with the 2nd largest retail footprint with 31 local branches, 21 e-branches including pay offices, 2 mobile units and over 125 ATMs as at 30 June 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 and Kochi) and representative offices in United Kingdom, Germany, Turkey, Singapore, China, South Korea, Japan, Hong Kong, Australia, South Africa, UAE (Sharjah) and Canada. Doha Bank, leveraging its network, has a strong market presence in contract financing (27% market share), trade loans (14% market share) and real estate (11% market share) and has been fast growing (14.6% net loans CAGR since 2007) Diversified shareholder base and strong support Qatar Holding LLC (a subsidiary of QIA) 16.7% The bank operates principally through four business groups: Wholesale Banking, Retail Banking, International Banking and Treasury & Investments. Doha Bank s long term rating was upgraded to A+ from A by Fitch with stable outlook. Other Shareholders 83.3% Doha Bank s long-term local and foreign currency rating was assessed at A2 / A- / A by Moody s, S&P and Capital Intelligence respectively. Second largest retail footprint Largest international network of representative offices among Qatari banks Source Company information, Doha Bank estimates based on public information and QCB data Note: 1. Measured as a percentage of the aggregate assets of the banking sector in Qatar as at 30 June 2015 Strong position in select business lines including contract financing, trade finance, real estate and retail 1

3 Significant player in a fast-growing banking sector June Net Loans (QRbn) June Total Deposits (QRbn) QNB QNB QIB 76.6 QIB 84.8 CBQ 72.6 CBQ 64.1 Rayan Doha Bank #3 position* Rayan Doha Bank #3 position* Ahli 22.3 Ahli Conventional Bank Islamic Bank Conventional Bank Islamic Bank Source Company information * Among conventional banks Source Company information * Among conventional banks Qatari banking system Total Loans (QRbn) Qatari banking system Total Deposits (QRbn) Q CAGR: 27.4% Q2-15 CAGR: 23.7% Source QCB banks monthly statements and annual reports Source QCB banks monthly statements and annual reports 2

4 Qatar has strong historic and planned economic growth... Qatar is one of the fastest growing economies globally and enjoys one of the highest GDP per capita, at US$93,965 in 2014 (1) Sound and attractive economic situation Government fiscal surplus (% of GDP) Sovereign rating: AA / Aa2 (S&P / Moody s), both stable Gas reserves: Qatar has the 3 rd largest reserves of natural gas in the world (2) Oil reserves: 25.7bn barrels of proven oil reserves (2) 20.0% 15.0% 10.0% 5.0% 0.0% 15.6% 13.1% QR115bn 8.6% 10.9% 11.4% 9.8% 7.2% 2.1% * Current account balance: It is expected to be at 26.1% & 5.3% of nominal GDP in 2014 (3) & 2015 (3) respectively Source QCB annual reports (2010 & 2013) and QCB Statistical Bulletin *Preliminary estimates Forecasted real GDP growth: c.6.1% in 2014 (3) & 7.3% in 2015 (3) GDP growth to benefit from the National Vision 2030 for Qatar under which a substantial infrastructure spend will be taking place Population: 2.34 million as at 30 June 2015 (4) GDP per capita: Government fiscal position Government gross debt: Significant future government & infrastructure spending: With US$93,965 in 2014 Qatar is one of the wealthiest countries in the world (1) Healthy surpluses registered in recent years QR billion (23.3% of GDP) over the first 12 months of FY 2014/15 (3) Significant investments in the run up to hosting the 2022 FIFA World Cup and achieving the 2030 Qatar National Vision (e.g. gas projects, airport, rail, infrastructure, housing) Currency: Pegged to the U.S. dollar since 1980 Strong government revenues Oil & gas revenues vs. total revenues (QRbn) * Oil & gas rev enues Inv estment rev enues Other rev enues WTI Crude Oil Price ($/brl) Notes: 1. IMF World Economic Outlook Database as (April 2015) 2. British Petroleum Statistical Review of World Energy (June 2015) 3. Qatar Economic Outlook (June 2015) 4. Ministry of Development Planning & Statistics Source QCB annual reports (2010 & 2013), QCB Statistical Bulletin and Bloomberg as of 30 June 2015 * Preliminary Estimates 3

5 with large planned expenditure to diversify the economy benefiting the banking sector 3 rd largest reserves and 2 nd largest exporter of natural gas Development of GDP composition UAE 3.3% Others 29.1% Saudi Arabia 4.4% US 5.2% Natural gas reserves (2014) Iran 18.2% Qatar Turkmenistan 13.1% 9.3% Russia 17.4% # Export of natural gas (cubic metres bn) # Russia Qatar NorwayCanada Netherlands % 12.8% 1.2% 6.8% 3.1% 3.6% 8.7% 5.4% 5.8% 60.4% 10.0% 7.3% 14.2% Oil and gas Finance, insurance & real estate Manufacturing Building & construction Electricity & water Agriculture & fishing 3.6% 0.5% 0.1% 5.6% 50.5% Trade, restaurants & hotels Transport & communications Services Source British Petroleum Statistical Review of World Energy (June 2015) Source QCB annual reports, QCB Statistical Bulletins Infrastructure projects & events to benefit from the National Vision 2030 Infrastructure projects in Qatar and the GCC 2022 FIFA World Cup Dubailand: Mudon Phase 2 Dubai (2016) New Orbital Highway & Truck Route - Qatar (2017) EW Treatment and Injection Plant - KOC - Kuwait (2017) Lusail Development: Golf City - Qatar (2018) Doha Metro: Gold Line - Tunneling Works - Qatar (2018) Lusail Light Rail: Phase 2 - Qatar (2018) ASHGHAL - Expressway Programme Qatar (2018) QDREIC - Lusail Development Qatar (2019) ASHGHAL - Local Roads & Drainage Program Qatar (2019) Renaissance City - UAE (2020) Clean Fuels Project - KNPC - Kuwait (2020) DWC: Al Maktoum International Airport Expansion - UAE (2021) MBR City: Dubai Creek Harbour - UAE (2025) QRAIL - QIRP: Passenger & Freight Rail - Qatar (2030) 2022 FIFA World Cup is expected to draw around half a million visitors, almost a quarter of Qatar s current population The government plans to build 9 new stadiums and expand 3 existing stadiums by 2019 for a total cost of US$4bn The government has also allocated US$20bn towards the development of the tourism sector Upcoming projects and economic development have attracted an influx of expatriate labor and benefited the economy Source Business Monitor International, research reports 4

6 Leading franchise of Doha Bank and entrenched position Loan market size (QRbn) and Doha Bank market share (%) Comments A leading franchise in real estate, contract financing, trade and retail loans 123 Opportunity for increased participation in the public sector Well diversified loan portfolio 7.9% Total loans 2% Government loans 6% Services Worldwide network of representative offices in key locations 119 Growing network of branches and strong presence in the GCC 36 27% Contract financing 60 14% Trade loans Doha Bank market share as of 30 June 2015 Loan market size as of 30 June % Real estate loans 9% Retail loans Strong and prominent brand recognition in Qatar Doha Bank excels in innovating new products and services and providing the right products to the right customers Many of the Board members belong to the ruling Al Thani family 5

7 Strong corporate banking franchise Overview of the corporate banking loan book - June 2015 Comments Non-banking financial institutions 5.6% Industry 7.1% Others 1.2% 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 Services 12.1% Real estate 29.2% Targets local and international companies and ultra high net-worth clients Trade 21.1% Contracting 23.7% Well diversified portfolio focused on private sector Will look to increase lending to the public sector Source Company information Total: QR40.6bn Loans (QRbn) Real estate Contract financing Trade Services CAGR 2010-Q2 2015: 24% CAGR 2010-Q2 2015: 23% CAGR 2010-Q2 2015: 8% CAGR 2010-Q2 2015: 28% Source Company information 6

8 Conservative approach to the fast growing real estate sector Real estate market share development 14.0% 21.6% 13.0% 12.0% 11.4% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 % of total June 2015 loans portfolio Source Company information and QCB data Qatari market real estate loans (QRbn) Loans portfolio is circa 85% of completed real estate projects vs. 15% of greenfield / under construction Conservative regulatory environment with real estate lending limits well defined Q1-15 CAGR: 34.5% Loan portfolio is highly collateralized at circa 170% Source QCB data 7

9 Leading market position in the contract financing sector based on strong relationships Contract financing market share development Comments 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 22.0% 17.6% 26.7% Doha Bank s high market share benefits from strong relations with key contractors through Doha Bank representative offices (eg.turkey, South Korea, Japan, Germany) 20.0% Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 % of total June 2015 loans portfolio Source Company information and QCB data Qatari market contract financing loans (QRbn) Comments Q2-15 CAGR: 28.4% The Qatari contract financing sector has been growing steadily over the past yearsyears (CAGR of 28.4% in 2005 Q2-15 period) The contract financing sector is set to benefit from planned infrastructure spending in Qatar as well as the 2022 FIFA World Cup 0 Source QCB banks monthly statements and annual reports 8

10 Leading international franchise on the back of a targeted network of branches and representative offices around the world Timeline of international expansion Increasing international reach 2004: Doha Bank established 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 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 International asset evolution (QRbn) 2013: Representative offices were established in Hong Kong, UAE (Sharjah) & Canada 2014: Opened a branch in Mumbai, India 2015: Acquired 2 new branches in India (Mumbai & Kochi) from HSBC Oman and a representative office opened in South Africa Q2-15 CAGR: 33.3% % of total assets

11 Leading and innovative retail franchise Second largest retail footprint in Qatar Doha Bank has a large retail book with the highest percentage of retail loans to total loans QNB 79 25% 21.1% 22.4% 20% 18.5% Doha bank QIB #2* 15% 10% 5% 11.4% 9.5% 6.7% 5.8% CBQ 29 0% Doha Bank QIB Ahli CBQ QNB Rayan Khaliji Ahli 16 % of retail loans to total loans portfolio as at 31 Dec 2014 Source Annual Reports Rayan Source Banks websites Distribution channels: innovative and increasing efficiency Branches Second largest retail footprint in Qatar widespread throughout the country Full service branches in Abu Dhabi, Dubai, Kuwait and India Strong reputation for new and innovative products and strong brand quality Doha Bank was the first to introduce many products & services in Qatar such as: Tablet Banking Al Asriya [Ladies Banking Package] Al Dana Savings Scheme Online money transfer through credit card Mobile e-remittance for Payroll card holders Co-branded credit cards and travel cards Gold bar sales Green Banking ATMs Internet banking E-shopping portal Mobile banking Network of over 125 ATMs throughout the country with a further increase planned The Bank has replaced a number of existing ATMs with multi functional capabilities First e-branch opened in Dubai during 2014 Doha Bank had the first bilingual website in Arabic and English out of all banks in Qatar Doha Bank won ebanking 2014 Excellence Award from the Middle East Excellence Awards Institute in recognition of its achievements in revolutionizing the egovernment systems and eservices in the region Doha Sooq (e-commerce website) was the first online shopping mall offered by a Bank in Qatar. Grants access to bank account details and enables instant transfer of funds, paying registered utility and credit card bills, recharging pre-paid mobile or broadband services and viewing current exchange rates Mobile banking application for iphone, Blackberry and Android is available for free download Source Company information Source Company information 10

12 Retail Business has innovative range of products Innovative range of retail products Asset quality Retail business (NPL ratio) Transactional & deposit accounts Doha Bank offers a wide range of transactional & deposit accounts to its customers, including term deposit accounts, savings certificates, call accounts, payroll accounts & various accounts of different maturities & yields 7.3% Personal loans Doha Bank offers a suite of personal loan products to retail customers made for a period of up to six years for Qatari nationals and four years for expatriates who transfer their monthly salaries to the Bank 3.9% 2.9% 3.3% 4.1% 3.6% Vehicle loans Expatriate banking Credit cards Private banking Repayment periods extending to six years for Qatari nationals and four years for expatriates The division is focused on Qatar, Abu Dhabi, Dubai, Kuwait and India and offers cross-border remittances, wealth management and off-shore banking services The Bank offers an extensive range of credit cards The number of cards has grown to c.64,000 from c.47,000 in December 2013 Offer privileged services such as Home Service, Real Estate Advisory, Global emergency cash access services, brokerage services etc Offer exclusive products such as capital protected close ended investment products, Visa Infinite Credit Cards, mortgage lending in UK, Egypt, UAE, and Kuwait, leveraging on local tie-ups Source Company information Comments Innovative range of products Doha Bank was first to introduce many loans and deposits related products in Qatar Strong base of Qatari clients, many of whom are wealthy individuals Retail mortgage loans Available for properties in Qatar as well as selected external market for eligible customers. Loans are tailored to suit individual needs coupled with competitive interest rates Source Company information 11

13 Strong credit quality NPL evolution Loan loss provision balance and coverage ratio 3.9% 3.3% 1,086 1, % % 3.1% 1,273 1, % 1, % 1, % % % 1, % 119.8% 1,775 1, % including risk reserve NPL (QRmn) NPL % Loan loss provision balance (QRmn) Coverage ratio % Net impairment loss on loans and cost of risk Comments 1.19% % % % % % 69 NPL ratio has decreased during 2015 primarily due to QR111m write off in Q Specific provision coverage has built up to a historic high and is now 120% Cost of risk low due to significant recoveries during H1-15 Net impairment loss on loans (QRmn) Cost of Risk % 12

14 Credit quality in Doha Bank core businesses Retail NPL ratio Real estate NPL ratio Corporate NPL ratio 7.3% 3.9% 2.9% 3.3% 4.1% 3.6% 2.6% 2.5% 4.3% 3.9% 4.3% 3.9% 3.3% 1.6% 1.4% 1.0% 1.4% 1.3% Comments Retail NPL ratio relatively low compared to historic highs Real estate NPL continues to be low due to conservative approach to underwriting Corporate NPL ratio continues to decrease 13

15 Historically stable financial performance and strong earning growth High net interest margin % - June 2015 Historical earnings growth 2.61% 2.66% 2.43% 2.32% 2.11% 1.95% 1, CAGR: 6.6% 1,305 1,241 1,313 1,359 DB QNB Ahli CBQ Rayan QIB Net income (QRmn) Cost / income Comments 34.5% 33.5% 34.5% 35.2% 35.7% 36.2% Historically strong profitability with higher NIM vs. competitors Growth in earnings in every year Relatively stable cost / income ratio 14

16 ...with attractive returns and high dividend yield... Return on shareholders equity June 2015 Cash dividend paid (QR) 18.4% 20.1% 18.9% 16.8% % 13.0% Doha Bank QNB Rayan Ahli QIB CBQ Attractive dividend yield Comments 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 11.9% 10.6% 9.7% 7.7% 9.0% 7.9% 7.6% 7.1% 7.8% 7.0% 8.5% 4.7% 7.0% 5.1% 4.6% 4.4% 4.1% 2.7% 2.7% 2.3% 2.6% 3.5% 2.1% 2.8% Doha Bank QNB CBQ High return on shareholders equity maintained amongst competitors Shareholders consistently rewarded with high cash dividend High dividend yield vs. competitors throughout the cycle 15

17 Diversified loans and deposits and limited concentration By sector June 2015 By type June 2015 Loans Deposits Loans Deposits Government and related agencies 7.2% Services 8.9% Industry 5.2% Non-banking financial institutions 4.1% Other 1.0% Real estate 21.6% Individual 22.0% Non-banking financial institutions 5.8% Government and related agencies 36.2% Retail 18.8% Government and related agencies 7.2% Current and call deposits 23.9% Savings accounts 4.6% Term deposits 71.5% Trade 15.6% Contract financing 17.6% Retail 18.8% Corporate 36.0% Corporate 74.0% Total loans: QR53.1bn Total deposits: QR51.7bn Total loans: QR53.1bn Total deposits: QR51.7bn Comments 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 The QCB imposes certain credit concentration limits on regulated banks in Qatar and the Bank follows the QCB s credit concentration policy Those credit concentration limits impose restrictions such as single obligor limits as well as restrictions on real estate lending 16

18 ...and a conservative investment philosophy Portfolio overview Investment Portfolio Split by Type June 2015(%) 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 QCB has previously introduced more conservative investments limits Overall yield of fixed income investment portfolio is c. 3.6% Equities 10.1% Other debt securities 25.1% Total (QR10,684mn) Mutual funds 0.7% State of Qatar debt securities 64.1% Investment portfolio - Evolution by classification (1) QRmn 11,704 10,684 9,581 9,453 7,577 6,082 5,253 5,217 5,037 4,124 3,192 2,866 4,385 4,544 5,622 5,292 5,336 2,351 Av ailable for Sale Held to Maturity Other debt securities 35% Available for Sale (QR5,336mn) Equities 20% Mutual funds 1% State of Qatar debt securities 44% Held to Maturity (QR5,253mn) Other debt securities 15% State of Qatar debt securities 85% Note: 1. Figures are sourced from Annual & Quarterly Reports 17

19 Well managed liquidity and solid capitalization Funding mix June 2015 Evolution of Tier 1 and capital adequacy ratio Debt securities 3.1% Other liabilities 2.6% Other borrowings 2.1% 13.6% 13.2% 13.6% 15.9% 15.0% 16.0% 14.3% 14.7% 15.7% Due to banks 13.9% Equity 15.8% Customer deposits 62.5% 11.0% 10.7% 10.9% Total liabilities and equity: QR82.7bn Source Note: Tier 1 ratio % CAR Company information 2014 onwards based on Basel III Equity Evolution (QRbn) Comments Q2 - CAGR: 18.7% 13.1 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 QR6.8bn of State of Qatar bonds which it could repo with the QCB at any time The bank successfully raised Additional Tier 1 Capital amounting to QR2bn each in Q and Q respectively The bank has successfully raised QR1.6bn of capital via rights issue in Q Doha Bank has a well diversified funding position and stable capital ratios 18

20 Doha Bank strategy clear path to future growth Maintain strong credit quality Maintain conservative and cautious approach to underwriting in particular with regards to contracting sector Continue improvement in risk management procedures and systems Further improve efficiency 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 Continue targeted international expansion 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 Qatar, UAE, Kuwait and India Amalgamation formalities to acquire 2 new branches in India (Mumbai & Kochi) from HSBC Oman S.A.O.G were completed Further develop regional branch network Further develop existing operations in the UAE, Kuwait and India and position Doha Bank at the centre of the infrastructure growth of the GCC economies Further consolidate Qatari position With a further strengthened capital position, Doha Bank is best positioned to capture the upcoming infrastructure growth in Qatar Source Company information 19

21 Concluding remarks 3 rd largest conventional Qatari bank (1) with 2 nd largest retail footprint in Qatar Prime player in Qatari banking market, growing at c. 20% pa (2) Strong regulatory environment aligned with international banking standards Backdrop of high growth macro-economic environment Proactive and supportive sovereign High NIM and ROAE Solid capitalization metrics with strong investment grade credit ratings Strong asset quality Strong shareholder base Highly experienced management team Source Company information Notes 1. Ranked by assets, excluding Islamic banks CAGR of Doha Bank s total assets 20

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