A difficult global and regional economic environment has made asset quality QIB’s resolute focus. The bank’s group CEO expects growth to come from new customers, including those that have never banked with an Islamic financial institution before.
Global Finance: QIB’s growth and profitability was sound in 2016. Are you expecting a similar picture in 2017, or will growth be more difficult given the economic challenges locally and regionally?
Bassel Gamal: We achieved net profit of 2,155 million riyal ($592 million) in 2016, an increase of 10%. We have increased substantially our market share, becoming the second largest bank in Qatar.
Being aware that local competition is increasing, and the challenging global and regional economic conditions are persisting, we stay committed to executing our business strategy while implementing strict credit criteria and continue focusing on cost optimization. Our focus will be more on the bottom line, efficiencies and asset quality, rather than asset size.
GF: Where will QIB’s growth come from? Gamal: Our strategy is built on our position as a leading Islamic bank with long-lasting customer relationships. The bank’s strategy is closely tied with Qatar’s National Vision 2030 and the government’s commitment to investments in the country’s infrastructure, the diversification of the economy and the development of a strong private sector.
Having introduced many products and services (credit cards, takaful), we are on a par with any commercial bank in terms of product suite. We strive to become a one-stop shop for all the financial needs of customers. We expect growth to be supported by cross-selling. We are taking initiatives to attract new customers, especially the younger generation and customers that might not have banked previously with an Islamic
GF: Are there still good growth prospects for Islamic banking regionally?
Gamal: Islamic banking has grown substantially in the Gulf Cooperation Council (GCC), and a growing number of new customers are becoming aware of Islamic banking products and services. We view this growth as beneficial and complementary to the growth we are experiencing in Qatar, where currently 27% of total financing and 28% of total deposits are shariah-compliant.
GF: Are you looking at regional or international expansion?
Gamal: Outside Qatar, we are interested in solidifying the position of our international entities and expanding cautiously, only if the right opportunity arises. We currently have a presence in the UK through our wholly owned subsidiary QIB (UK) and have opened a branch in Sudan.
We also have a presence in Lebanon through Arab Finance House and Malaysia through Asia Finance Bank.
GF: Can the government’s current level of infrastructure spending be maintained?
Gamal: Despite the drop in oil prices, large-scale projects set by the government will continue, especially those related to the country’s infrastructure, hospitality sector and sports linked to the 2022 Football World Cup. Qatar is spending about $500 million a weeks to host the World Cup.
The nonhydrocarbon sector will account for most of the economy’s growth. Real GDP growth will be supported by increased activity in the hydrocarbon sector. Sectors, including construction, manufacturing, electricity, water and services, will continue