Investor Presentation July 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 7.0% (1) and assets totalling QR91.8bn Doha Bank has a strong domestic franchise with the 2 nd largest retail footprint with 31 local branches, 15 e-branches including pay offices, 1 active mobile unit and over 120 ATMs as at 30 June 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 (26% market share), trade loans (14% market share) and real estate (12% 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 as on 30 June 2017 Strong international footprint Diversified shareholder base and strong support Other Shareholders 83.3% 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 2017 1
Significant player in a fast growing banking sector June - 2017 Net Loans (QRbn) June - 2017 Total Deposits (QRbn) QNB 552.2 QNB 562.1 QIB 109.7 QIB 96.9 CBQ 83.6 CBQ 74.4 Rayan 68.0 Rayan 61.2 Doha Bank 59.2 #3 position* Doha Bank 56.0 #3 position* Ahli 26.9 Ahli 22.1 0 50 100 570 Conventional Bank Islamic Bank Note: *Among conventional banks Qatari banking system Total Loans (QRbn) 0 50 100 570 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 0.0 877 844 753 653 578 510 404 314 243 270 161 2007 2008 2009 2010 2011 CAGR (2007 - Q2 2017) : 20% 800.0 700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 771 727 650 601 548 458 364 307 247 212 167 2007 2008 2009 2010 2011 CAGR (2007 - Q2 2017) : 17% 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 Sovereign rating: Gas reserves: Aa (Negative watch) by Fitch / AA- (Negative watch) by S&P / Aa3 (Negative) 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: Deficit of 2.2% in 2016 (1) and Surplus of 0.7% in 2017 (1) of nominal GDP Forecasted real GDP growth: 2.7% in 2016 (1) and 3.4% in 2017 (1) Population: 2.55 million as at 30 June 2017 (4) GDP per capita: Government fiscal position: With US$64,447 in 2017 Qatar is one of the wealthiest countries in the world (1) Estimated deficit of 7.7% of GDP in 2017 (3) The Qatar budget 2017 committed to reduce Qatar s planned deficit by 38.9% from QR46.5bn in 2016 to QR28.4bn in 2017 Government gross debt: QR271.6bn (47.6% of GDP) in 2016 (1) Significant future government & infrastructure spending: Significant investments in the run up to hosting the 2022 FIFA World Cup and achieving the 2030 Qatar National Vision (e.g. gas projects, airport, rail, infrastructure, housing) Currency: Pegged to the U.S. dollar since 1980 1. IMF World Economic Outlook Database (April 2017) 2. British Petroleum Statistical Review of World Energy (June 2017) 3. IMF 2016 Article IV Consultation with Qatar (April 2017) 4. Population statistics of Ministry of Development Planning & Statistics (June 2017) Government fiscal surplus/deficit (% of GDP) 16.0% 6.0% -4.0% -14.0% 6.9% 11.4% 16.0% 13.7% -0.8% -9.0% -7.7% 2011/12 2012/13 2013/14 2014/15 2015* 2016** 2017** QCB annual reports (2011-2015) & Qatar MDPS (June 2016) Note: The above data until 2014/15 is for the fiscal year from 1 April 31 March * Preliminary date covers 9 months (1/4/2015-31/12/2015) where the period has been extended for the year 2015 for amending the fiscal year to a calendar year. ** Estimates as per IMF 2016 Article IV Consultation with Qatar (April 2017) Government revenues (QRbn) 400 140 350 300 49 61 120 100 250 98 66 112 200 42 42 80 150 23 26 60 100 36 195 40 155 178 164 50 97 20 0 0 2010/11 2011/12 2012/13 2013/14 2014/15 Oil & gas revenues Investment revenues Other revenues WTI Crude Oil Price ($/brl) Government revenues: QCB annual reports & WTI Crude oil Price: Bloomberg report - June 2017 Note: The above data until 2014/15 is for the fiscal year from 1 April 31 March 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 (2016) Export of natural gas in 2016 (cubic meters bn) Iran Others 18.0% 250 1 29.8% 204.8 200 #2 Russia 150 124.5 116.1 17.3% 100 82.5 53.1 a 50 Q US Qatar 4.7% Turkmenistan 13.0% #3 0 9.4% Russia Qatar Norway Canada Netherlands British Petroleum Statistical Review of World Energy (June 2017) Development of GDP composition 2012 2016* 4.7% 5.8% 9.5% 3.6% % 8.7% 5.4% 2.1% 5.3% 4.6% 10.5% % Mining and Quarrying Manufacturing Construction 2012 2016* 58.0% QCB Quarterly Statistical Bulletin April 2017 Note: * Preliminary estimates 7.7% Wholesale, Retail and other services Transportation and srorage Financial and insurance activities 30.3% 9.6% % 99.0% 3.3% % 10.0% % 11.9% 1 Real Estate Public administration Others Infrastructure projects & events to benefit from the National Vision 2030 Infrastructure projects in Qatar ASHGHAL - Local Roads & Drainage Program (2019) 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) RasGas - Barzan Gas Development (2023) NPP - Hamad Port (2025) Barwa Real Estate - Barwa Al Khor Development (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 The government has allocated QR42bn in the 2017 Budget towards transportation and infrastructure projects. Business Monitor International, MEED and other 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 (%) 877 333 139 137 123 73 40 7.0% 0.9% 11.7% 5.7% 8.2% 14.0% 26.1% Total loans Government loans Real estate loans Services Retail loans Trade loans Contract financing Doha Bank market share as of 30 June 2017 Loan market size as of 30 June 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 - June 2017 Loans (QRbn) Non banking financial institutions 3.3% Industry 2.8% Services 16.0% Trade 21.0% Others 1.7% Real estate 33.7% Contracting 21.5% Total: QR48.4bn 18.0 15.0 12.0 9.0 6.0 3.0 0.0 Real estate 16.3 14.5 CAGR (2012 Q2 2017) : 21% 11.6 9.2 9.8 6.9 12.0 8.0 4.0 0.0 Contract financing 10.1 10.7 10.4 8.4 7.6 5.5 CAGR (2012 Q2 2017) : 15% 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 Q2 2017) : 10% 9.4 8.8 6.6 6.7 9.7 10.2 10.0 8.0 6.0 4.0 2.0 0.0 7.7 6.8 6.1 3.3 3.3 2.0 CAGR (2012 Q2 2017) : 36% 6
Conservative approach to the fast growing real estate sector Real estate market share development Qatari market real estate loans (QRbn) 14.0% 26.6% 13.0% 11.7% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 % of total June 2017 loans portfolio 180 160 140 120 100 80 60 40 20 0 135.0 139.2 125.7 95.7 76.2 85.6 85.4 51.0 33.3 40.4 19.8 2007 2008 2009 2010 2011 CAGR (2007 Q2 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 0.04% 7
Leading market position in the contract financing sector based on strong relationships Contract financing market share development Qatari market contract financing loans (QRbn) 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 22.0% 17% 26.1% 40 30 20 10 8.2 11.5 13.0 CAGR (2007 Q2 2017) : 18% 23.3 18.4 18.2 16.2 32.0 38.9 40.5 40.0 20.0% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 0 2007 2008 2009 2010 2011 % of total June 2017 loans portfolio 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 International asset evolution (QRbn) CAGR (2012 Q2-2017) : 18% 20 16.0 16.5 14.2 16 12.4 12 8.1 8 4 0 Increasing international reach 17.1 19% 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 67 #2 46 29 28 0 QNB* Doha Bank* CBQ QIB Conventional Bank Banks websites & Annual reports Note: * Includes E-Branches & Pay offices 15 14 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: Doha Bank My Book Qatar Application 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 over 120 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
Strong credit quality NPL evolution 3.01% 3.10% 3.26% 3.27% 3.11% 2.81% 2,012 1,881 1,909 1,560 Loan loss provision balance and coverage ratio 120% 119% 114% 110% 97% 2,409 2,263 87% 2,070 1,775 190% 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% 0.85% 0.98% 439 0.60% 0.84% 480 0.44% Comments: Stable NPL ratio Specific provision coverage is 119% which is historically high 190 318 313 131 NPL ratio has improved primarily due to QR194mn write off Cost of risk is low due to significant recoveries 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 4.2% 3.6% 4.2% 4.1% 3.8% 3.6% 6.3% 6.6% 6.8% 7.2% 2.8% 3.0% 1.4% 1.1% 0.1% 0.04% 2014 2015 2016 Q2-17 2014 2015 2016 Q2-17 2014 2015 2016 Q2-17 2014 2015 2016 Q2-17 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 % - June 2017 Cash dividend (QR per share) 2.44% 2.41% 2.22% 2.08% 2.05% 2.04% 4.5 4.5 4.5 4.0 3.0 3.0 Doha Bank QNB Ahli QIB CBQ Rayan 2011 2012 2013 2014 2015 2016 Attractive dividend yield 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 9.0% 7.8% 7.0% 8.5% 7.1% 4.6% 4.1% 8.4% 8.7% 7.0% 7.7% 5.1% 3.5% 2.6% 2.8% 2.2% 1.8% 0.0% 2011 2012 2013 2014 2015 2016 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 Dividends have been scaled 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 June 2017 By type June 2017 Loans Deposits Loans Deposits Industry 2.2% Government and related agencies 4.7% Services 12.6% Non-banking financial institutions 2.6% Others 1.3% Real estate 26.6% Individuals 16.9% Non-banking financial institutions 6.8% Government and related agencies 41.0% Retail 16.5% Government and related agencies 4.7% Current and Call Deposits 16.1% Savings Accounts 3.9% Trade 16.5% Contract Financing 17.0% Retail 16.5% Corporate 35.3% Corporate 78.8% Term Deposits 80.0% Total loans: QR59.2bn Total deposits: QR56.0bn Total loans: QR59.2bn Total deposits: QR56.0bn 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 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
... And a conservative investment philosophy... Portfolio overview Investment portfolio split by type June 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 31.0% s Equities 4.6% s Total (QR16,107mn) Mutual funds 0.4% State of Qatar debt securities 64.0% S Investment portfolio - evolution by classification (1) (QRmn) 18,000 16,107 14,706 13,500 11,704 12,198 5,845 9,581 9,856 6,392 9,000 5,724 6,082 5,037 4,527 4,500 10,260 8,309 4,544 5,622 6,457 5,292 0 Available for Sale (QR10,260mn) Other debt securities 36.8% Mutual funds 0.6% Equities 7.1% Held to Maturity (QR5,845mn) Other debt securities 21.1% Available for sale Held to Maturity 1. Figures are sourced from Annual Reports & Quarterly Financials State of Qatar debt securities 55.5% State of Qatar debt securities 78.9% 15
Well managed liquidity and solid capitalization Funding mix June 2017 Other liabilities 2.1% Debt securities 0.4% Other borrowings 6.4% Evolution of tier 1 and capital adequacy ratio 13.6% 15.9% 15.0% 15.7% 15.6% 17.0% 16.8% 14.3% 14.7% 15.4% 15.4% Due to banks 14.2% 10.9% 10.9% 11.2% 11.8% 10.4% 10.4% 11.9% Customer deposits 61.0% Equity 15.9% Total liabilities and equity: QR91.8bn 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 Q2 2017) : 16% 13.2 13.4 14.6 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 QR10.3bn of State of Qatar bonds which it could repo with the QCB at any time Doha Bank recently completed 20% rights issue, raising QR1.29bn 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 Further develop regional 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 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 - Q2 2017 CAGR of Doha Bank s total assets 18