TBY talks to Sheikh Faisal Bin AbdulAziz Bin Jassem Al-Thani, Chairman and Managing Director of Ahlibank, on growth segments, cyber security, and expectations for 2017.

Which segments currently offer the most potential for Ahlibank?

Retail banking continues to be a key focus area, as under the new capital rules there is an advantage over capital deployment. However, to be honest, the bulk of growth remains in the commercial banking side of our business. We are close with the business community and have been scoring high in terms of winning opportunities. Regarding the sectors in Qatar's economy which have the most potential for commercial growth, we have been selectively supporting the real estate sector before moving on to infrastructure. However, we always maintained close ties with commercial trade, capital expenditure, and related businesses to be our core segments going forward.

What new initiatives do you have to push the trade side of the business?

We have invested in the trade finance department to advise and train customers on how to operate across borders using their letters of credit rules and other tools. We work with the International Chamber of Commerce (ICC) and are active in terms of advising the business community of Qatar about the valuable role played by the ICC. The primary motive is to voice our opinion and advise on the new rules, which Qatar should and will play in cross-border trade. The ICC is an important element of this.

How have your e-payment channel products impacted operations?

It takes time for these products to take off. It is gradually growing, but we wish that it grew further and faster as there is competition on all sides. We have made investments in the local payment gateway, which is called Q-Pay, developed by the Qatar Central Bank (QCB). We made these investments and the Qatar Central Bank just upgraded it so we have a good pipeline in providing services to businesses to help them with their customer offerings, for which they need a bank. These businesses must also upgrade their websites in order to integrate this additional payment capability. They have now taken over and we have put in local and international names which they are happy with. We are leaders in this business, and we recognize considerable growth opportunities in the area.

What is Ahlibank doing to protect their customers through cyber security initiatives?

At the Cyber Security Convention that just took place we released two films, which dealt with internet security and “phishing” on the website and through WhatsApp. We are creating awareness not internally but also externally, and we continue to advise and send messages to customers to make them aware of it. We are the first if not only bank that went to request certification which is good to have in cyber security. All the banks are audited by the Qatar Central Bank (QCB), but there are bound to be gaps that need to be closed. We are working on ISO certification, so this is not a stagnant position we are in. We do not stop as the risk is too high. Those hackers are always trying to get one step forward, so we need to constantly match them in order to avoid being compromised.

What opportunities do you expect to come from your raising of USD500 million in international markets?

First of all, this is a debut debt issue for the bank. We lacked visibility in the international market and this was because we wanted to address the liabilities under the balance sheet and to strengthen our liability ladder. This liquidity is stable, but we wanted to have a mix of short-, medium-, and long-term funding because we need to match the asset side of the business. We also have to follow the Basel III rules to source stable funding requirements, so our issuance in the market was extremely successful, though it came at a cost. This improves our liquidity position and compliance with the regulators' ratios, which is why we went there. We have plans to do the same thing again and will announce it to the market when the time is right.

How has Qatar's FTSE upgrade affected Ahlibank?

A lot of the shareholders like to buy and hold rather than trade, hence our liquidity in the shares is limited in terms of where other banks are. It does add liquidity to the market in case our shares are traded more. As we grow and our shareholder base expands it will have a positive effect.

How do you see potential US Federal reserve rating increases impacting the bank?

It is bound to increase the cost of funding which is something that is bothering all the banks at the moment. The potential increase is also going to affect banks and the cost of liquidity has gone up and will have an impact. These particular medium-term loans that we have issued have stabilized it. We have seen in advance that things will go up and if we do our homework right and do medium fixed term funding then the benefit to the customer will come later. At the moment, we will pay for it but later on we will see that what we have done is right.

What strategies does Ahlibank have to increase its brand awareness?

We have been focusing on training our customer facing staff in the branches on how to create the right first impression. It starts with the first interaction with customers, as at the end of the day no matter how well gadgets work you still need people at the end of the line to help you, speak to you, and guide you. These staff members are the most important human capital for us.

What were the reasons behind the IPSOS brand recognition improvement of Ahlibank?

We invested in getting this and have been noticed. We have the technology, people training, results, participation, social responsibility, and recently received the Asian Banker recognition award. We are doing it the right way. It is a combination of things, but the fundamental is that first impression when you start dealing with the bank.

What is your outlook for Ahlibank and the banking sector in Qatar in 2017?

I look at 2017 with caution. If we continue looking at quality and select our opportunities and look at efficiencies in operations then we will be fine in 2017. The industry at large might not record the levels of the good days, but it is all about sustainability rather than big gains. That is what we are aiming for.