Investor Presentation July 2018
Overview of Doha Bank Key highlights Incorporated in 1979, Doha Bank is the third largest local conventional bank by assets in Qatar with a market share of approximately 6.4% (1) and assets totaling QR89.2bn Doha Bank has a strong domestic franchise with the 2 nd largest retail footprint with 27 local branches, 9 e-branches including pay offices, 1 active mobile unit and around 110 ATMs as at 30 th June 2018 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 United Kingdom, Germany, Turkey, Singapore, China, South Korea, Japan, Hong Kong, Australia, South Africa, Canada, Sri Lanka, Nepal and Bangladesh Doha Bank, leveraging its network, has a strong market presence in contract financing (27% market share), trade loans (17% market share) and real estate (12% market share) and has been fast growing (9% net loans CAGR since 2008) 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 Strong international footprint 1 Qatar 2 Dubai - UAE 3 Abu Dhabi - UAE 4 Kuwait City - Kuwait 5 Mumbai - India 6 Kochi - India 7 Chennai - India 8 London - UK 9 Frankfurt - Germany 10 Istanbul - Turkey 11 Singapore 12 Shanghai - China 13 Seoul - S. Korea 14 Tokyo - Japan 15 Hong Kong - China 16 Sydney - Australia 17 Toronto - Canada 18 Johannesburg - South Africa 19 Dhaka - Bangladesh 20 Colombo - Sri Lanka 21 Kathmandu - Nepal Diversified shareholder base and strong support Other Shareholders 83.3% 20 21 Qatar Holding LLC (a subsidiary of QIA) 16.7% Second largest 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, 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 2018 1
Significant player in a fast growing banking sector Net Loans (QRbn) - June -2018 Total Deposits (QRbn) - June -2018 QNB 604.0 QNB 613.8 QIB 100.3 QIB 98.9 CBQ 87.2 CBQ 75.1 Rayan 72.7 Rayan 62.7 Doha Bank 57.9 #3 position* Doha Bank 51.6 #3 position* Ahli 28.3 Ahli 22.6 0 50 100 620 Conventional Bank Islamic Bank Note: *Among conventional banks Qatari banking system Total Loans (QRbn) 0 50 100 620 Conventional Bank Islamic Bank Note: *Among conventional banks Qatari banking system Total Deposits (QRbn) 243 270 314 653 578 510 404 CAGR (2008 - Q2 2018) : 13% 753 844 911 930 212 247 307 CAGR (2008 - Q2 2018) : 14% 458 364 601 548 650 727 823 818 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2-18 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2-18 QCB banks monthly statements and annual reports QCB banks monthly statements and annual reports 2
Qatar has strong historic and planned economic growth... Stable economic situation Government fiscal surplus/deficit (% of GDP) Sovereign rating: Gas reserves: AA- (Stable) by Fitch / AA- (Negative) by S&P / Aa3 (Stable) by Moody s Qatar has the 3 rd largest reserves of natural gas in the world (2) Oil reserves: 25.2bn barrels of proven oil reserves (2) Current account balance: Surplus of 1.3% in 2017 (1) and 2.5% in 2018 (1) of nominal GDP Forecasted real GDP growth: 2.1% in 2017 (1) and 2.6% in 2018 (1) Population: 2.58 million as at 30 June 2018 (4) 15.0% 5.0% -5.0% -15.0% Note: 13.7% -1.9% -1.1% -6.0% -9.2% 2014/15 2015 2016** 2017** 2018*** QCB annual reports & QCB Quarterly Statistic Bulletins The above data until 2014/15 is for the fiscal year from 1 April 31 March ** Estimates as per IMF 2018 Article IV Mission with Qatar March 2018 *** Qatar Budget 2018 GDP per capita: With US$66,202 in 2018 Qatar is one of the wealthiest countries in the world (1) Government fiscal position: Estimated deficit of 1.1 % of GDP in 2018 (3) Government gross debt: QR370.36bn (55.35% of GDP) in 2018 (1) Significant future government & infrastructure spending: Significant investments in the run up to hosting the 2022 FIFA World Cup and achieving the 2030 Qatar National Vision (e.g. gas projects, airport, rail, infrastructure, housing) Currency: Pegged to the U.S. dollar since 1980 Government revenues (QRbn) 400 27 300 40 200 322 13 30 28 100 287 171 141 133 0 2013/14 2014/15 2015* 2016 2017 250 200 150 100 50 0 Oil & Gas revenues** Miscellaneous Transferables revenues WTI Crude Oil Price ($/brl) 1. IMF World Economic Outlook Database (April 2018) 2. British Petroleum Statistical Review of World Energy (June 2018) 3. Qatar Budget 2018 4. Population statistics of Ministry of Development Planning & Statistics (June 2018) Government revenues: QCB annual reports & WTI Crude oil Price: Bloomberg report - March 2018 Note: * 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. Qatar enjoys one of the highest GDP per capita at US$ 66,202 in 2018 (1) and has strong historic economic growth 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 Natural gas reserves (2016) Export of natural gas in 2017 (cubic meters bn) Iran Others 17.20% 250 29.90% 231.0 200 #2 UAE 3.10% Saudi Arabia 4.20% US 4.50% Turkmenistan 10.10% Development of GDP composition 2013 2017* 6.3% 8.6% 5.1% 8.4% 4.0% 32.7% 5.4% 7.1% 2.0% 5.9% 55.7% 9.1% 5.4% 3.1% 10.2% 9.2% 9.3% 12.5% Mining and Quarrying Manufacturing Construction Qatar 12.90% Russia 18.10% British Petroleum Statistical Review of World Energy (June 2018) #3 2013 2017* QCB Quarterly Statistical Bulletin April 2018 Note: * Preliminary estimates Wholesale, Retail and other services Transportation and storage Financial and insurance activities 150 121.8 114.9 100 80.7 44.1 50 0 Russia Qatar Norway Canada Netherlands Real Estate Public administration Others Infrastructure projects & events to benefit from the National Vision 2030 Infrastructure projects in Qatar QF - Education City (2019) NDIA - Hamad International Airport (2020) ASHGHAL - Expressway Programme (2020) FIFA World Cup Football Stadiums (2020) UDC - Pearl Qatar (2020) Msheireb Properties - Msheireb Downtown Doha (2020) QP - Bul Hanine Field Redevelopment Project (2021) LREDC - Lusail Development (2022) QatarGas - Barzan Gas Development (2023) NPP - Hamad Port (2025) Barwa Real Estate - Barwa Al Khor Development (2025) Manateq - Qatar Economic Zone (2025) QRAIL - Qatar Integrated Rail Project (2026) Kahramaa - Water Security Mega Reservoirs (2026) 2022 FIFA World Cup 2022 FIFA World Cup is expected to draw around half a million visitors, circa 20% of Qatar s current population In the 2018 Qatar Budget, the funds allocated to the sports sector and projects related to the 2022 FIFA World Cup amounted to QR11.2bn Business Monitor International, research reports Upcoming projects and economic development have attracted an influx of expatriate labor and benefited the economy 4
Leading franchise of Doha Bank and entrenched position Loan market size (QRbn) and Doha Bank market share (%) 930 348 150 153 129 77 40 6.7% 0.9% 12.2% 5.4% 6.4% 16.6% 27.0% Total loans * Includes Non-Banking Financial Institution Government loans Real estate loans Services* Retail loans Trade loans Contract financing Doha Bank market share as of 30 June 2018 Loan market size as of 30 June 2018 Comments: 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 Excels in providing the right products to the right customers 5
Strong corporate banking franchise Overview of the corporate banking loan book - June 2018 Loans (QRbn) Non-banking financial institutions 3.3% Services 12.7% Contracting 21.1% Industry 1.3% Others 0.5% Real estate 35.9% Real estate CAGR (2013 Q2 2018) : 17% 11.6 9.8 9.2 14.5 18.3 18.3 Contract financing 10.7 11.0 10.8 10.1 8.4 7.6 CAGR (2013 Q2 2018) : 8% Trade 25.2% Total : QR51.1bn 2013 2014 2015 2016 2017 Q2-18 2013 2014 2015 2016 2017 Q2-18 Trade Services Comments: 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 11.6 9.4 9.7 8.8 6.7 CAGR (2013 Q2 2018) : 16% 12.9 3.3 3.3 6.1 6.8 6.5 6.4 CAGR (2013 Q2 2018) : 16% 2013 2014 2015 2016 2017 Q2-18 2013 2014 2015 2016 2017 Q2-18 6
Conservative approach to the fast growing real estate sector Real estate market share development Qatari market real estate loans (QRbn) 29.3% 12.2% CAGR (2008- Q2 2018) : 17% 85.6 85.4 76.2 95.7 125.7 135.0 147.3 149.6 33.3 40.4 51.0 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Market Share % of total June 2018 loans portfolio 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2-18 and QCB data QCB banks monthly statements and annual reports Comments: Conservative regulatory environment with real estate lending limits well defined Loan portfolio is highly collateralized at circa 170% NPL percentage for the Real Estate book is only 0.04% 7
Leading market position in the contract financing sector based on strong relationships Contract financing market share development Qatari market contract financing loans (QRbn) 17.2% 27.0% CAGR (2008- Q2 2018) : 14% 32.0 40.5 38.9 40.1 39.8 11.5 13.0 18.4 16.2 18.2 23.3 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Market Share % of total June 2018 loans portfolio 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2-18 and QCB data QCB banks monthly statements and annual reports Comments: Comments: 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 not looking to further grow market share in this segment The Qatari contract financing sector growth has been flat over the recent years The contract financing sector is set to benefit from planned infrastructure spending in Qatar as well as the 2022 FIFA World Cup 8
2018 2018 Leading international franchise on the back of a targeted network of branches and representative offices around the world 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 International asset evolution (QRbn) 12.4 14.2 Increasing international reach Kathmandu 2018 Colombo Chennai 16.0 16.5 2013 2014 2015 2016 2017 Q2-18 14.8 13% of total assets 11.9 9
Leading and innovative retail franchise Innovative range of retail products Transactional / Deposit accounts Loans Expatriate banking Credit cards Private banking 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 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 The division is focused on Qatar, UAE, Kuwait and India and offers cross-border remittances, wealth management and off-shore banking services The Bank offers an extensive range of credit cards 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 Second largest conventional retail footprint in Qatar 65 #2 37 29 QNB* Doha Bank* QIB CBQ Ahli Rayan Conventional Bank Islamic Bank Banks websites & Annual reports Note: * Includes E-Branches & Pay offices 28 15 13 Distribution channels: Innovative and increasing efficiency Branches ATMs Internet banking E-shopping portal Mobile banking 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: Expansion of digital customer service Al Asriya (Ladies Banking Package) through WhatsApp, Hello Doha and Al Dana Savings Scheme FB messenger Online money transfer through credit Doha Sooq Ecommerce platform card Multi product Relationship Rewards Co-branded credit cards and travel Rewarding for multiple products cards owned by customer. Gold bar sales WhatsApp Chat service Green Banking (including Green Biometric authentication in Mobile Mortgage Home Loan Product) Banking Qatar Exchange Traded Fund (QETF) Apple iwatch Banking Application and Tablet Banking Second largest retail footprint in Qatar widespread throughout the country Full service branches in Abu Dhabi, Dubai, Kuwait and India Network of around110 ATMs throughout the country The Bank has many ATMs with multi functional capabilities Doha Bank has the award winning first bilingual website in Arabic and English amongst the banks in Qatar Doha Sooq (e - commerce website) - first online shopping mall offered by a Qatari bank 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 10
Credit Quality NPL evolution Total Reserves* for loans & advances divided by impaired loans 3.01% 1,273 3.10% 1,560 3.26% 1,881 3.27% 2,012 3.61% 2,259 4.30% 2,684 172% 2,191 187% 179% 188% 3,781 3,362 2,915 186% 171% 4,578 4,190 2013 2014 2015 2016 2017 Q2-18 NPL (QRmn) NPL % Net impairment loss on loans and cost of risk* 2013 2014 2015 2016 2017 Q2-18* Total Reserves for loans & advances Total Reserves for loans & advances/impaired loans * Includes expected credit loss as at Q2-18 (Note: 2013 to 2017 include risk reserves) 1.52% 0.85% 0.98% 0.60% 0.84% 1.00% 439 480 593 448 318 313 2013 2014 2015 2016 2017 Q2-18 Net Impairment loss on loans (QRms) Cost of Risk % * Includes expected credit loss (ECL) as per IFRS 9 as at Q2-2018 11
Credit quality in Doha Bank s core businesses and by geography Real estate NPL ratio Corporate NPL ratio Retail NPL ratio Contracting NPL ratio 11.0% 4.2% 4.6% 4.9% 4.1% 3.8% 4.7% 5.1% 6.6% 6.8% 7.9% 1.1% 3.0% 0.1% 0.1% 0.04% 2015 2016 2017 Q2-18 2015 2016 2017 Q2-18 2015 2016 2017 Q2-18 2015 2016 2017 Q2-18 NPL per geographical location - June 2018 Comments: 27.1% Real estate NPL % is almost nil Contracting NPL % continues to be elevated GCC branches showing significantly high NPL% Qatar operation s NPL remain low 2.2% 1.3% 4.3% Qatar GCC India Consolidated 12
High margin and high dividend yield High net interest margin % - June 2018 Cash dividend (QR per share) 2.42% 2.37% 2.29% 2.20% 2.18% 2.07% 4.5 4.5 4.0 3.0 3.0 3.0 DB QNB Rayan Ahli QIB CBQ 2012 2013 2014 2015 2016 2017 Attractive dividend yield 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 10.5% 9.0% 8.4% 8.7% 7.8% 7.0% 8.5% 7.0% 7.7% 7.1% 5.1% 4.6% 4.1% 3.5% 3.5% 2.6% 2.2% 1.8% 2.8% 2.8% 0.0% 2011 2012 2013 2014 2015 2016 2017 Doha Bank QNB CBQ & Bank s Annual Financial Statements Comments: Highest Net Interest Margin amongst competitors Shareholders have been rewarded consistently with high dividend payout over the years Highest dividend yield vs. competitors throughout the cycle 13
Diversified loans and deposits By sector June 2018 By type June 2018 Loans Deposits Loans Deposits Industry Non-banking financial 1.1% institutions Others Non-banking 2.7% 0.5% financial institutions Government and 4.5% related agencies 5.0% Individuals Government and Services Real estate 18.9% 10.4% related agencies 29.3% 51.5% Retail 13.2% Government and related agencies 5.0% Savings Accounts 4.4% Current and Call Deposits 19.1% Retail 13.2% Contract Financing 17.2% Trade 20.6% Corporate 25.1% Corporate 81.8% Term Deposits 76.5% Total loans: QR57.9bn Total deposits: QR51.6bn Total loans: QR57.9bn Total deposits: QR51.6bn 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 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 14
Investment Book Portfolio overview Investment portfolio split by type June 2018 (%) 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 Other debt securities 24.0% Total (QR19,764mn) Equities 2.9% Mutual funds 0.4% State of Qatar debt securities 72.7% Investment portfolio - evolution by classification (QRmn) 20,000 17,153 19,764 FVOCI (QR14,337mn) Amortised Cost (QR5,276mn) 16,000 12,000 8,000 11,704 6,082 9,856 4,527 12,198 5,724 14,706 6,392 5,694 11,819 5,276 14,337 Other debt securities 26.2% Equities 3.5% Mutual funds 0.2% Other debt securities 18.3% 4,000 5,622 5,292 6,457 8,309-2013 2014 2015 2016 2017 Q2-18* Available for sale/ Fair Value Through Other Comprehensive Income (FVOCI)* Held to Maturity/ Amortisation Cost* State of Qatar debt securities 70.1% State of Qatar debt securities 81.7% Figures are sourced from Annual Reports and Quarterly Financials *As per IFRS 9 classification 15
Liquidity and Capitalization Funding mix June 2018 Other liabilities 2.3% Other borrowings 5.8% Due to banks 19.1% Equity 14.1% Debt securities 0.8% Customer deposits 57.9% Evolution of tier 1 and capital adequacy ratio 15.9% 15.0% 15.7% 15.6% 17.5% 16.6% 14.3% 11.2% 14.7% 11.8% 17.4% 15.4% 15.4% 15.5% 12.3% 10.4% 10.4% 10.3% 2013 2014 2015 2016 2017 Q2-18 Total liabilities and equity: QR89.2bn Tier 1 ratio CET 1 ratio % Total CAR Note: 2014 onwards based on Basel III Loan to Deposit ratio (%) - June - 2018 112.2% 98.4% 101.4% 116.0% 116.1% 125.3% Comments: 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 QR14.4bn of State of Qatar bonds which it could repo with the QCB at any time Q2 2018 capital adequacy ratios are post ECL adjustment DB QNB QIB Rayan CBQ Ahli 16
Doha Bank strategy Clear path to future growth Improve 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 Leverage on latest digital technologies to increase operational efficiency 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 countries where we have our presence Further develop international branch network Further develop existing operations and position Doha Bank at the center of the infrastructure growth in the economies where we operate Further consolidate Qatari position Doha Bank is positioned to capture the upcoming infrastructure growth in Qatar 17
Concluding remarks 3 rd largest conventional Qatari bank (1) with 2nd largest retail footprint in Qatar Prime player in Qatari banking market, growing at c.8% 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 Strong investment grade credit ratings Strong and stable liquidity Strong shareholder base Highly experienced management team Note: 1. Ranked by assets, excluding Islamic banks 2. 2008 - Q2-2018 CAGR of Doha Bank s Total Assets 18