Investor Presentation April 2017
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 7.1% (1) and assets totalling QR90.7bn Doha Bank has a strong domestic franchise with the 2 nd largest retail footprint with 30 local branches, 15 e-branches including pay offices, 1 active mobile unit and over 120 ATMs as at 31 March 2017 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 & 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 (14% 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 Strong international footprint 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, 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 March 2017 1
Significant player in a fast growing banking sector March - 2017 Net Loans (QRbn) March - 2017 Total Deposits (QRbn) QNB 535.8 QNB 540.9 QIB 99.5 QIB 103.9 CBQ 82.0 CBQ 71.9 Rayan 67.5 Rayan 63.1 Doha Bank 59.5 #3 position* Doha Bank 54.0 #3 position* Ahli 26.6 Ahli 22.1 0 10 30 50 70 90 110 550 Conventional Bank Islamic Bank Note: *Among conventional banks Qatari banking system Total Loans (QRbn) 0 20 40 60 80 100 120 550 Conventional Bank Islamic Bank Note: *Among conventional banks Qatari banking system Total Deposits (QRbn) 900.0 800.0 700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 844 855 753 653 578 510 404 314 243 270 161 2007 2008 2009 2010 2011 CAGR 2007 - Q1 2017: 20% 800.0 700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 727 753 650 601 548 458 364 307 247 212 167 2007 2008 2009 2010 2011 CAGR 2007 - Q1 2017: 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: AA (Stable) by Fitch / AA (Negative) by S&P / Aa2 (Negative) by Moody s Qatar has the 3 Gas reserves: rd largest reserves of natural gas in the world (2) Oil reserves: 25.7bn barrels of proven oil reserves (2) 18.0% 8.0% -2.0% -12.0% 16.0% 11.4% 13.7% 6.9% -0.8% -7.8% 2011/12 2012/13 2013/14 2014/15 2015* 2016** Current account balance: Deficit of 2.2% of nominal GDP in 2016 (1) Forecasted real GDP growth: 2.7% in 2016 (1) and 3.4% in 2017 (1) Population: 2.66 million as at 31 March 2017 (4) GDP per capita: Government fiscal position: With US$64,447 in 2017 Qatar is one of the wealthiest countries in the world (1) Estimated deficit of 7.8% of GDP in 2016 (3) The Qatar budget 2017 committed to reduce Qatar s planned deficit by 38.9% from QR46.5bn in 2016 to QR28.4bn in 2017 Government gross debt: QR271.5bn (47.6% of GDP) in 2016 (1) Significant future government & infrastructure spending: Significant investments in the run up to hosting the 2022 FIFA World Cup and achieving the 2030 Qatar National Vision (e.g. gas projects, airport, rail, infrastructure, housing) Currency: Pegged to the U.S. dollar since 1980 QCB annual reports (2011-2015) & Qatar MDPS (June 2016) Note: The above data until 2014/15 is for the fiscal year from 1 April 31 March * Preliminary date covers 9 months (1/4/2015-31/12/2015) where the period has been extended for the year 2015 for amending the fiscal year to a calendar year. ** Estimates as per Ministry of Development Planning and Statistics June 2016 Government revenues (QRbn) 400 140 350 120 49 300 61 100 250 65 98 200 42 42 112 80 100 150 23 36 155 26 178 195 60 40 50 0 97 164 20 0 2010/11 2011/12 2012/13 2013/14 2014/15* Oil & gas revenues Investment revenues Other revenues WTI Crude Oil Price ($/brl) 1. IMF World Economic Outlook Database (April 2017) 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 (March 2017) Note: QCB annual reports The above data untill 2015 is for the fiscal year from 1 April - 31 March * Preliminary Data Qatar enjoys one of the highest GDP per capita at US$ 64,477 in 2017 (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 UAE 3.3% Saudi Arabia 4.5% Natural gas reserves (2015) Export of natural gas in 2015 (cubic meters bn) Iran Others 18.2% 1 250 28.6% 6 207.5 200 #2 Russia 150 126.1 115.5 17.3% 100 74.3 50 41.8 US Qatar 5.6% Turkmenistan 13.1% #3 0 9.4% Russia Qatar Norway Canada Netherlands British Petroleum Statistical Review of World Energy (June 2016) Development of GDP composition 2011 2015* 2011 2015* 4.4% 5.5% 8.4% 3.9% 7.4% 5.6% 6.4% 2.3% 38.6% 5.3% 8.2% 4.7% 58.8% 2.9% 9.5% 8.8% 9.6% 9.7% Mining and Quarrying Manufacturing Construction QCB annual report - December 2015 Note: * Preliminary estimates Wholesale, Retail and other services Transportation and srorage Financial and insurance activities Real Estate Public administration Others Infrastructure projects & events to benefit from the National Vision 2030 Infrastructure projects in Qatar and the GCC ASHGHAL - Local Roads & Drainage Program (2019) KNPC - New Refinery Project (2019) NDIA - Hamad International Airport (2020) Barakah One - Barakah Nuclear Power Plant (2020) LREDC - Lusail Development (2022) KNPC - Clean Fuels Project (2022) Dubai Holding / Emaar Properties - MBR City (2025) QRAIL - Qatar Integrated Rail Project (2026) Dubai Holding - Dubailand (2030) Dubai South - Mixed Use Development (2030) Aldar - Yas Island Development (2030) Ministry of Housing - Saudi Housing Project (2031) Emaar - King Abdullah Economic City (2034) KA-CARE - Nuclear Power Reactor (2040) 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 has allocated QR42bn in the 2017 Budget towards transportation and infrastructure projects. 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 (%) 855 320 137 135 122 69 40 7.2% 1.0% 11.1% 5.9% 8.7% 14.2% 26.8% Total loans Government loans Real estate loans Services Retail loans Trade loans Contract financing Doha Bank market share as of 31 March 2017 Loan market size as of 31 March 2017 Comments: A leading franchise in real estate, contract financing, trade and retail loans Opportunity for increased participation in the public sector Well diversified loan portfolio Worldwide network of representative offices in key locations Growing network of branches and strong presence in the GCC 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 - March 2017 Loans (QRbn) Non banking financial institutions 3.5% Industry 4.0% Services 16.5% Trade 20.3% Others 1.5% Total: QR 48.0bn Real estate 31.8% Contracting 22.4% 16.0 12.0 8.0 4.0 0.0 Real estate 14.5 15.3 11.6 9.2 9.8 6.9 CAGR 2012 - Q1 2017: 20% 12.0 8.0 4.0 0.0 Contract financing 10.1 10.7 10.8 8.4 7.6 5.5 CAGR 2012 - Q1 2017: 17% 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 12.0 8.0 4.0 0.0 CAGR 2012 - Q1 2017: 10% 9.4 8.8 6.6 6.7 9.7 9.7 10.0 8.0 6.0 4.0 2.0 0.0 7.9 6.8 6.1 3.3 3.3 2.0 CAGR 2012 - Q1 2017: 39% 6
Conservative approach to the fast growing real estate sector Real estate market share development Qatari market real estate loans (QRbn) 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 24.7% 11.1% 11.1% Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 % of total March 2017 loans portfolio 180 160 140 120 100 80 60 40 20 0 135.0 137.5 125.7 95.7 76.2 85.6 85.4 51.0 33.3 40.4 19.8 2007 2008 2009 2010 2011 CAGR 2007 - Q1 2017: 23% 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 0.1% 7
Leading market position in the contract financing sector based on strong relationships Contract financing market share development Qatari market contract financing loans (QRbn) 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 22.0% 17.4% 26.8% 40 30 20 10 8.2 11.5 13.0 CAGR 2007 - Q1 2017: 19% 23.3 18.4 18.2 16.2 32.0 38.9 40.4 40.1 20.0% Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 % of total March 2017 loans portfolio 0 2007 2008 2009 2010 2011 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) The Qatari contract financing sector has been growing steadily over the past years The contract financing sector is set to benefit from planned infrastructure spending in Qatar as well as the 2022 FIFA World Cup 8
Leading international franchise on the back of a targeted network of branches and representative offices around the world Timeline of international expansion 2004: 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, UAE (Sharjah) & 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: A representative office established in Bangladesh 24 20 16 International asset evolution (QRbn) 18.9 16.0 16.5 14.2 12.4 CAGR 2012 - Q1 2017: 22% 12 8.1 8 4 0 Increasing international reach 21% of total assets Bangladesh 2016 9
Leading and innovative retail franchise Innovative range of retail products Transactional / Deposit accounts Loans Expatriate banking Credit cards Private banking 80 60 40 20 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, Egypt, UAE, and Kuwait, leveraging on local tie-ups Second largest conventional retail footprint in Qatar 66 #2 45 29 28 0 QNB Doha Bank CBQ QIB Conventional Bank Banks websites & Annual reports Note: Includes E-Branches & Pay offices 15 13 Ahli Islamic Bank Rayan 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: 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 Second largest retail footprint in Qatar widespread throughout the country Full service branches in Abu Dhabi, Dubai, Kuwait and India Network of over120 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 out of all 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
Strong credit quality NPL evolution Loan loss provision balance and coverage ratio 2.81% 3.01% 3.10% 3.26% 3.27% 2,012 1,881 1,560 2.99% 1,848 87% 97% 114% 1,775 110% 2,070 120% 126% 2,409 2,321 200% including risk reserve 974 1,273 845 1,230 NPL (QRmn) NPL % Loan loss provision balance (QRmn) Coverage ratio % Net impairment loss on loans and cost of risk 0.59% 190 0.85% 0.98% 318 439 0.60% 313 0.84% 480 0.36% 53 Comments: Stable NPL ratio Specific provision coverage is 126% which represents a historical high NPL ratio has improved during Q1-17 primarily due to QR194mn write off Cost of risk low due to significant recoveries during Q1-17 Net impairment loss on loans (QRmn) Cost of Risk % 11
Credit quality in Doha Bank core businesses Real estate NPL ratio Corporate NPL ratio Retail NPL ratio Contracting NPL ratio 2.8% 3.0% 4.2% 3.5% 4.2% 4.1% 3.8% 3.2% 6.3% 6.6% 6.8% 6.9% 1.4% 1.1% 0.1% 0.1% 2014 2015 2016 Q1-17 2014 2015 2016 Q1-17 2014 2015 2016 Q1-17 2014 2015 2016 Q1-17 Comments: Real estate NPL % is almost nil Corporate and Retail NPL has improved Contracting NPL % continues to be elevated 12
High margin and high dividend yield High net interest margin % - March 2017 Cash dividend (QR per share) 4.5 4.5 4.5 2.34% 2.38% 2.17% 4.0 3.0 3.0 2.03% 1.98% 1.94% DB QNB Ahli Rayan CBQ QIB 2011 2012 2013 2014 2015 2016 Attractive dividend yield 10.0% 9.0% 8.7% 8.4% 7.8% 7.0% 8.0% 7.0% 8.5% 7.7% 7.1% 6.0% 5.1% 4.6% 4.1% 4.0% 3.5% 2.6% 2.8% 2.2% 1.8% 2.0% 0.0% 0.0% 2011 2012 2013 2014 2015 2016 Doha Bank QNB CBQ & Bank s Annual Financial Statements Comments: Second 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 Dividends have been sclaed back over the last two years in order to align capital requirements to Basel III 13
Diversified loans and deposits and limited concentration By sector March 2017 By type March 2017 Loans Deposits Loans Deposits Government and related agencies 5.1% Services 12.9% Industry 3.1% Non-banking financial institutions 2.7% Others 1.2% Real estate 24.7% Individuals 20.2% Non-banking financial institutions 8.1% Government and related agencies 28.7% Retail 17.2% Government and related agencies 5.1% Current and Call Deposits 17.4% Savings Accounts 4.6% Trade 15.7% Contract Financing 17.4% Retail 17.2% Corporate 43.0% Corporate 77.7% Term Deposits 78.0% Total loans: QR59.5bn Total deposits: QR54.0bn Total loans: QR59.5bn Total deposits: QR54.0bn 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 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 split by type March 2017 (%) 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 28.9% Equities 6.1% Total (QR15,142mn) Mutual funds 0.4% State of Qatar debt securities 64.6% Investment portfolio - evolution by classification (1) (QRmn) Available for Sale (QR8,891mn) Held to Maturity (QR6,215mn) 16,000 12,000 8,000 4,000 9,581 5,037 4,544 11,704 9,856 6,082 4,527 5,622 5,292 12,198 5,724 6,457 14,706 15,142 6,392 6,215 8,309 8,891 Other debt securities 34.0% Mutual funds 0.8% Equities 10.3% Other debt securities 21.3% 0 Available for sale Held to Maturity 1. Figures are sourced from Annual Reports & Quarterly Financials State of Qatar debt securities 54.9% State of Qatar debt securities 78.7% 15
Well managed liquidity and solid capitalization Funding mix March 2017 Evolution of tier 1 and capital adequacy ratio Other liabilities 2.2% Other borrowings 5.6% 13.6% 15.9% 15.0% 15.7% 15.6% 15.0% 14.3% 14.7% 15.4% 15.4% 14.8% Due to banks 18.4% Customer deposits 59.5% 10.9% 10.9% 11.2% 11.8% 10.4% 10.4% 10.1% Equity 14.3% Total liabilities and equity: QR90.7bn Tier 1 ratio CET 1 ratio % Total CAR Note: 2014 onwards based on Basel III Equity evolution (QRbn) 7.6 11.3 11.3 CAGR 2012 - Q1 2017: 14% 13.2 13.4 13.0 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 QR9.8bn 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 2nd largest retail footprint in Qatar Prime player in Qatari banking market, growing at c.12% 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 Note: 1. Ranked by assets, excluding Islamic banks 2. 2007-Q1 2017 CAGR of Doha Bank s total assets 18