Investor Presentation February 2017
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 7.1% (1) and assets totalling QR90.4bn Doha Bank has a strong domestic franchise with the 2 nd largest retail footprint with 29 local branches, 16 e-branches including pay offices, 1 active mobile unit and 120 ATMs as at 31 December 2016 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), Canada and Bangladesh Doha Bank, leveraging its network, has a strong market presence in contract financing (27% market share), trade loans (13% market share) and real estate (11% market share) and has been fast growing (13% net loans CAGR since 2007) 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 A2 / A- / A+ / A by Moody s, S&P, Fitch and Capital Intelligence respectively Diversified shareholder base and strong support Other Shareholders 83.3% Qatar Holding LLC (a subsidiary of QIA) 16.7% Large retail footprint Largest international network of representative offices among Qatari banks Strong position in select business lines including contract financing, trade finance, real estate and retail 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 31 December 2016 1
Significant player in a fast-growing banking sector December - 2016 Net Loans (QRbn) December - 2016 Total Deposits (QRbn) QNB 520.4 QNB 506.7 QIB 98.2 QIB 95.4 CBQ 77.8 CBQ 70.9 Rayan 67.6 Rayan 58.0 Doha Bank 59.2 #3 position* Doha Bank 55.7 #3 position* Ahli 26.9 Ahli 25.0 0 20 40 60 80 100 550 0 20 40 60 80 100 550 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) 900.0 800.0 700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 844 753 653 578 510 404 314 243 270 161 103 2006 2007 2008 2009 2010 2006 2016 CAGR: 24% 800.0 700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 727 650 601 548 458 364 307 247 212 167 120 2006 2007 2008 2009 2010 2006 2016 CAGR: 20% Source QCB banks monthly statements and annual reports Source QCB banks monthly statements and annual reports 2
Qatar has strong historic and planned economic growth... Qatar enjoys one of the highest GDP per capita at US$ 60,733 in 2016 (1) and has strong historic economic growth Stable economic situation Government fiscal surplus/deficit (% of GDP) Sovereign rating: AA (Stable) by S&P / AA (Stable) by Fitch / Aa2 (Negative) by Moody s 18.0% 8.0% 6.9% 11.4% 16.0% 13.7% 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) Current account balance: Forecasted real GDP growth: Deficit of 1.8% of nominal GDP in 2016 (1) 2.6% in 2016 (1) and 3.4% in 2017 (1) Population: 2.60 million as at 31 December 2016 (4) GDP per capita: Government fiscal position: Government gross debt: Significant future government & infrastructure spending: With US$60,733 in 2016 Qatar is one of the wealthiest countries in the world (1) Estimated deficit of 7.8% of GDP in 2016 (3) The Qatar budget 2017 committed to reduce Qatar s planned deficit by 38.9% from QR46.5bn in 2016 to QR28.4bn in 2017 QR 312.7 billion (54.9% of GDP) in 2016 (1) Significant investments in the run up to hosting the 2022 FIFA World Cup and achieving the 2030 Qatar National Vision (e.g. gas projects, airport, rail, infrastructure, housing) Currency: Pegged to the U.S. dollar since 1980 Notes: 1. IMF World Economic Outlook Database (October 2016) 2. British Petroleum Statistical Review of World Energy (June 2016) 3. Ministry of Development Planning & Statistics (June 2016) 4. Population statistics of Ministry of Development Planning & Statistics (December 2016) -2.0% -0.8% -12.0% -7.8% 2011/12 2012/13 2013/14 2014/15 2015* 2016** Notes: The above data until 2014/15 is for the fiscal year from 1 April 31 March * Preliminary date covers 9 months (1/4/2015-31/12/2015) where the period has been extended for the year 2015 for amending the fiscal year to a calendar year. ** Estimates as per Ministry of Development Planning and Statistics -- June 2016 Source: QCB annual reports (2011 & 2015) and Qatar MDPS (2016) Government revenues (QRbn) 400 140 350 120 49 300 61 100 250 65 98 200 42 42 112 80 26 60 150 23 36 195 40 100 178 155 164 50 97 20 0 0 2010/11 2011/12 2012/13 2013/14 2014/15* Oil & gas revenues Investment Other revenues WTI Crude Oil Price ($/brl) * Preliminary Data Note: The above data untill 2015 is for the fiscal year from 1 April - 31 March Source: QCB annual reports 3
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 2011 2015* UAE 3.3% Others 28.6% Saudi Arabia 4.5% US 5.6% Natural gas reserves (2015) Iran 18.2% Qatar Turkmenistan 13.1% 9.4% Russia 17.3% #3 250 200 150 100 50 0 Export of natural gas in 2015 (cubic metres bn) 207.5 #2 126.1 115.5 74.3 41.8 Russia Qatar NorwayCanada Netherlands 2011 2015* 4.4% 5.5% 3.9% 7.4% 5.6% 6.4% 2.3% 5.3% 8.2% 4.7% 58.8% 2.9% 9.5% 8.8% Mining and Quarrying Manufacturing Construction Wholesale, Retail and other services Transportation and storage Financial and insurance activities 8.4% 38.6% 9.6% 9.7% Real Estate Public administration Others Source: British Petroleum Statistical Review of World Energy (June 2016) Source: QCB annual report - December 2015 * Preliminary estimates Infrastructure projects & events to benefit from the National Vision 2030 Infrastructure projects in Qatar and the GCC KA-CARE - Renewable Energy Program (2017) JDURC - Heart of Jeddah Development (2017) MMRTC - Mecca Metro (2017) Dubai Holding / Emaar Properties JV - Dubai land: Bawadi (2017) QRAIL - QIRP: Passenger & Freight Rail (2017) Miral - Yas Island: South Yas Development (2017) SEZAD - Northern and Central Industrial Zone-Oman (2017) Saudi Aramco / Sabic JV - Jubail Oil-To-Chemical Complex (2018) ADNOC - Hail and Ghasha Sour Gas Development (2018) ADNOC - Bab Sour Gas Project (2018) KACARE - Sustainable City (2019) Saudi Aramco - Yanbu Integrated Refinery & Petrochemicals Complex (2019) Aldar Properties - Lulu Island (2019) KAPP - Kuwait National Rail Road (2019) 2022 FIFA World Cup 2022 FIFA World Cup is expected to draw around half a million visitors, circa 20% of Qatar s current population The government plans to build 9 new stadiums and expand 3 existing stadiums by 2020 for a total cost of US$4bn The government has allocated QAR 42bn in the 2017 Budget towards transportation and infrastructure projects Upcoming projects and economic development have attracted an influx of expatriate labor and benefited the economy Source: Business Monitor International, research reports 4
Leading franchise of Doha Bank and entrenched position Loan market size (QRbn) and Doha Bank market share(%) Comments 844 A leading franchise in real estate, contract financing, trade and retail loans 315 135 Opportunity for increased participation in the public sector Well diversified loan portfolio 7.3% Total loans 1.6% Government loans 10.8% Real estate loans Worldwide network of representative offices in key locations Growing network of branches and strong presence in the GCC 125 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 7 2 121 5.4% Services Many of the Board members belong to the ruling Al Thani family 40 26.5% Contract financing 13.4% Trade loans 9.0% Retail loans Doha Bank market share as of 31 December 2016 Loan market size as of 31 December 2016 5
Strong corporate banking franchise Overview of the corporate banking loan book - December 2016 Comments Non banking financial institutions 3.8% Industry 3.7% Services 14.8% Others 1.5% Real estate 31.7% 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 and ultra high net-worth clients Trade 21.1% Contracting 23.4% Well diversified portfolio focused on private sector Total: QR45.8bn Loans (QRbn) Real estate Contract financing Trade Services 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 5.9 6.9 11.6 9.2 9.8 CAGR 2011 2016: 20% 14.5 12.0 10.0 8.0 6.0 4.0 2.0 0.0 10.7 10.1 8.4 7.6 5.5 4.7 CAGR 2011 2016: 18% 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 CAGR 2011 2016: 14% 8.8 9.4 9.7 6.6 6.7 5.1 8.0 6.0 4.0 2.0 0.0 6.1 3.3 3.3 2.0 2.0 CAGR 2011 2016: 28% 6.8 6
Conservative approach to the fast growing real estate sector Real estate market share development Comments 14.0% 13.0% 23.6% 12.0% 10.80% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 % of total December 2016 loans portfolio and QCB data Conservative regulatory environment with real estate lending limits well defined NPL percentage for the Real Estate book is only 0.1% Loan portfolio is highly collateralized at circa 170% Qatari market real estate loans (QRbn) 160 140 120 100 80 60 40 20 0 135.0 125.7 95.7 76.2 85.6 85.4 51.0 40.4 33.3 19.8 10.6 2006 2007 2008 2009 2010 2006 2016 CAGR: 29% Source: QCB banks monthly statements and annual reports 7
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% 17.4% 26.50% 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-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 % of total December 2016 loans portfolio and QCB data Qatari market contract financing loans (QRbn) Comments 40 30 20 10 5.1 8.2 11.5 2006 2016 CAGR: 23% 18.4 18.2 16.2 13.0 23.3 32.0 38.9 40.4 The Qatari contract financing sector has been growing steadily over the past years (CAGR of 23% in 2006 2016 period) The contract financing sector is set to benefit from planned infrastructure spending in Qatar as well as the 2022 FIFA World Cup 0 2006 2007 2008 2009 2010 Source: QCB banks monthly statements and annual reports 8
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 were established 2011: Representative offices were established in Abu Dhabi and Germany Bangladesh 2016 International asset evolution (QRbn) 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, UAE (Sharjah) & Canada 2014: Opened a branch in Mumbai, India and first e-branch in Dubai 20 16 12 8 7.5 8.1 12.4 14.2 2011 2016 CAGR: 17% 16.0 16.5 18% of total assets 2015: Acquired 2 new branches in India (Mumbai & Kochi) from HSBC Oman and a representative office opened in South Africa 2016: A representative office established in Bangladesh 4 0 9
Leading and innovative retail franchise Second largest conventional retail footprint in Qatar Innovative range of retail products QNB Doha Bank QIB CBQ 29 29 28 #2 66 Transactional / Deposit accounts Doha Bank offers a wide range of accounts to its customers, including term deposit accounts, savings certificates, call accounts, payroll accounts and various accounts of different maturities & yields 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 Ahli 15 Expatriate banking The division is focused on Qatar, UAE, Kuwait and India and offers cross-border remittances, wealth management and offshore banking services Rayan 13 0 15 30 45 60 75 Conventional Bank Source: Banks websites & Annual reports Islamic Bank 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: Biometric authentication in Mobile Banking Apple iwatch Banking Application and 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 Credit cards The Bank offers an extensive range of credit 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, Egypt, UAE, and Kuwait, leveraging on local tie-ups 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 ATMs Network of 120 ATMs throughout the country The Bank has many ATMs with multi functional capabilities Internet banking E-shopping portal Doha Bank has the award winning first bilingual website in Arabic and English out of all banks in Qatar 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 Source Company information Source Company information 10
Strong credit quality NPL evolution 3.32% 3.01% 3.10% 3.26% 3.27% 2,400 2.81% 1,881 2,012 2,000 1,560 1,600 1,273 1,200 1,055 974 800 400 0 NPL (QRmn) NPL % Loan loss provision balance and coverage ratio 2,900 2,800 114% 110% 2,400 97% 2,300 87% 2,070 1,775 1,900 74% 1,800 1,400 1,230 1,300 786 845 900 800 400 300 120% 2,409 (100) (200) Loan loss provision balance (QRmn) Coverage ratio % 188% 120.0% including 120.0% risk reserve 100.0% 100.0% 80.0% 80.0% 60.0% 60.0% 40.0% 40.0% 20.0% 20.0% 0.0% 0.0% Net impairment loss on loans and cost of risk Comments 660 610 560 510 460 410 360 310 260 210 160 110 60 10 0.85% 0.94% 0.98% 0.84% 0.59% 0.60% 480 439 318 313 271 190 Net impairment loss on loans (QRmn) Cost of Risk % Stable NPL ratio Specific provision coverage is 120% which represents a historical high 11
Credit quality in Doha Bank core businesses Real Estate NPL ratio Corporate NPL ratio Retail NPL ratio Contracting NPL ratio 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1.4% 1.0% 1.1% 0.1% 2013 2014 2015 2016 6.0% 6.0% 5.0% 5.0% 4.0% 4.0% 3.0% 3.0% 2.0% 2.0% 1.0% 1.0% 0.0% 3.2% 3.0% 2.8% 4.2% 2013 2014 2015 2016 10.0% 6.0% 8.0% 5.0% 4.0% 6.0% 3.0% 4.0% 2.0% 2.0% 1.0% 0.0% 3.3% 4.2% 4.1% 3.8% 2013 2014 2015 2016 7.0% 7.0% 6.0% 6.0% 5.0% 5.0% 4.0% 6.8% 6.6% 6.3% 6.1% 2013 2014 2015 2016 Comments Real estate NPL % is almost nil Contracting NPL % continues to be elevated 12
High Margin and high dividend yield High net interest margin % - December 2016 Cash dividend (QR per share) 2.96% 4.5 4.5 4.5 4.0 2.43% 3.0 3.0 2.13% 2.01% 2.04% 1.71% DB QNB Ahli CBQ Rayan QIB Attractive dividend yield Comments 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 9.0% 8.7% 8.4% 7.8% 7.0% 7.0% 8.5% 7.7% 7.1% 5.1% 4.6% 4.1% 3.5% 2.6% 2.8% 2.2% 1.8% 0.0% ۲۰۱۱ 2011 ۲۰۱۲ 2012 ۲۰۱۳ 2013 ۲۰۱٤ 2014 ۲۰۱٥2015 ۲۰۱٦2016 Doha Bank QNB CBQ Second highest Net Interest Margin amongst competitors Shareholders have been rewarded consistently with high dividend payout over the years High dividend yield vs. competitors throughout the cycle Dividends have been scaled back over the last two years in order to align capital requirements to Basel III & Bank s Annual / Financial Reports 13
Diversified loans and deposits and limited concentration By sector - December 2016 By type - December 2016 Loans Deposits Loans Deposits Industry 2.7% Government and related agencies 8.0% Services 11.0% Trade 15.7% Non-banking financial institutions 2.8% Others 1.2% Real estate 23.6% Contract Financing 17.4% Retail 17.6% Individual 18.3% Non-banking financial institutions 3.0% Corporate 40.0% Government and related agencies 38.7% Retail 17.6% Government and related agencies 8.0% Corporate 74.4% Current and call deposits 18.0% Savings accounts 4.1% Term deposits 77.9% Total loans: QR59.2bn Total deposits: QR55.7bn Total loans: QR59.2bn Total deposits: QR55.7bn 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 14
...and a conservative investment philosophy Portfolio overview Investment Portfolio by type - December 2016 (%) 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 Other debt securities 24.9% Total (QR14,706mn) Mutual funds 0.4% State of Qatar debt securities 67.8% Equities 6.9% Investment portfolio - Evolution by Classification QRmn Available for Sale (QR8,309mn) Held to Maturity (QR6,392mn) 16,000 12,000 8,000 4,000 11,704 9,581 9,856 7,577 6,082 5,037 3,192 4,527 4,385 4,544 5,622 5,292 12,198 5,724 6,457 14,706 6,392 8,309 Other debt securities 27.6% Mutual funds 0.7% Equities 12.3% Other debt securities 21.4% 0 Available for Sale Held to Maturity State of Qatar debt securities 59.4% State of Qatar debt securities 78.6% 15
Well managed liquidity and solid capitalization Funding mix December 2016 Evolution of Tier 1 and capital adequacy ratio Debt securities 2.0% Due to banks 13.6% Equity 14.8% Other liabilities 2.4% Other borrowings 5.5% Customer deposits 61.7% Total liabilities and equity: QR90.4bn Equity Evolution (QRbn) 13.2% 13.6% 15.9% 15.0% 15.7% 15.6% 14.3% 14.7% 10.9% 10.9% 11.2% 10.7% 10.7% 11.8% 15.4% 15.4% 10.4% 10.4% Note: 2014 onwards based on Basel III Comments CET 1 ratio Tier 1 ratio % Total CAR 7.1 7.6 2011 2016 CAGR: 14% 11.3 11.3 13.2 13.4 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 QR10bn of State of Qatar bonds which it could repo with the QCB at any time Doha Bank has a well diversified funding position and a sound capital base with strong capital ratios 16
Doha Bank strategy clear path to future growth Maintain 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 Doha Bank established its 13th Representative Office in Bangladesh 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 stable capital adequacy ratios, Doha Bank is positioned to capture the upcoming infrastructure growth in Qatar 17
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. 15% pa (2) Strong regulatory environment aligned with international banking standards Backdrop of a strong macro-economic environment Proactive and supportive sovereign High NIM and ROAE Solid capitalization metrics with strong investment grade credit ratings Strong and stable asset quality Strong shareholder base Highly experienced management team Notes: 1. Ranked by assets, excluding Islamic banks 2. 2006-2016 CAGR of Doha Bank s total assets 18