QAR765 MILLION NET PROFIT

Qatar 2019 | FINANCE | VIP INTERVIEW

TBY talks to Khalid Al-Subeai, Group CEO of Barwa Bank, on milestones, Islamic banking, and an upcoming merger.

What have been the main achievements and milestones for Barwa Bank in the past year?

Barwa Bank has been in the market for more than a decade, having developed from a start-up phase into a mature organization that has consistently gained market share while increasing its asset base, client portfolio, and product offerings. In the last financial year ending December 31, 2018, we are proud to have realized a net profit of QAR765 million and our total assets exceed QAR44 billion mark. The Government is Barwa Bank's largest shareholder, and, in line with the nation's ambitious economic diversification plans, we are focused on meeting requirements of the local economy, namely assisting Government-related entities, Corporates, SMEs, Private and Retail banking clients, with their ever evolving banking needs.

How is Barwa Bank innovating through its digital services?

As a young, innovative, and flexible financial institution, it is natural for us to be tech savvy. The Group's positive financial results come in line with its commitment to improve the products and services provided to customers and to benefit from the rapid development of technologies that provide the greatest flexibility and ease of transactions, while aiming to deliver distinguished Shari'ah compliant services equivalent to international standards. Our corporate internet banking enables secure access anywhere in the world. Its features include sophisticated access controls to restrict viewing of accounts and/or making and approving transactions, storing beneficiary details for future use and to save re-keying, making local and international payments, as well as applying for documentary credits and a full range of contractors' bonds. On another front, our SMS Banking is designed to keep customers up-to-date with their finances with instant alerts to their mobile phones. In addition, we have launched our all-new mobile banking application in the 1st quarter of this year that aims to simplify their banking transactions without any need to visit the branches. Customers can directly do account/card transactions, transfers, quick payment of bills and much more. The future of banking lies in mobile and online banking and providing our customers with such accessibility comes in line with our efforts to deliver a seamless banking experience through a range of secure and convenient channels.

Barwa Bank aspires to be one of world's leading Islamic financial services groups, and the most recommended Islamic bank in Qatar. What sets it apart as an Islamic bank?

Islamic finance has been growing at a tremendous pace over the past few years, and this trend is likely to continue. The understanding of Islamic finance is increasing rapidly, as does its link with innovation. Barwa Bank is driven by a dedicated pursuit of excellence and innovation in our product development and services offering, founded on a grand design that challenges traditional models and bridges Shari'ah compliant principles with modern standards of conventional banking. Our creative efforts have translated into an unmatched customer-centric experience for our clients and solid financial results for our shareholders, reaffirming Barwa Bank's status in Islamic banking services in Qatar and the region. Barwa Bank brings a wide range of market-leading solutions to banking clients in Qatar built on forward-thinking strategies. Earning our reputation as the country's most progressive Shari'ah compliant service provider, we offer a diverse spectrum of banking products, such as the Faseel High Profit savings account, which offers monthly profit, and the Thara'a savings account, which offers account holders the chance to benefit from monthly cash rewards. A first for Islamic banks in Qatar, the Thara'a savings account offers customers the opportunity to win several monthly cash prizes and a chance to win a grand prize of QAR1 million biannually as well.

How do you assess the impact of the blockade on Qatar's economy?

The blockade was unfortunate and unexpected; however, in the day-to-day lives of people, there has been an negligible impact only. A positive outcome of the blockade can be seen in the new sectors that have emerged up, covering food security, warehousing, ports and logistics. The blockade has enabled local SMEs to claim a larger role in agribusiness, F&B, basic commodities, light industries, and the medical sectors. Qatar has demonstrated to the world that it does not politicize trade, which has been a catalyst for FDI, tourism, foreign ownership, and the equity markets. Essentially, it has moved the wheel faster in terms of Qatar's strategy to diversify away from the hydrocarbon sector. On the financial side, the results speak for themselves. Qatar's banking system remained healthy with ample liquidity, high asset quality and strong capitalization, although external pressure prevails. Barwa Bank in particular had a solid financial performance in both 2017 and 2018. Today, we are very much prepared to support the public and private sector diversification initiatives, backed by Qatar's robust and dynamic economy. We continue to provide support to foreign companies based in Qatar and entities looking to do business in Qatar.

What are the most interesting investment opportunities in Qatar for international investors in the coming year?

First, the equity market is solid, with many state-owned and state-backed companies that are liquid and valued competitively. The Qatar stock market is among the highest yielding in the MSCI Emerging Markets Index. Moreover, hydrocarbons have fueled the development of Qatar and will continue to do so in the future. In addition, the contracting sector will benefit from the major infrastructure expenditure taking place in Qatar. Another sector that is poised for growth is services. These sectors can all benefit from the expertise of foreign partners, who will be warmly received and will have a successful venture in Qatar.

What value will Barwa Bank and ibq merger bring to Qatar's banking sector?

Our board of directors and shareholders have approved the merger between Barwa Bank and ibq. This is a positive sign for the Qatari market, where intense competition has affected profitability of the banks. The merger will rebalance the Qatari banking sector, as it will create a leading Shari'ah compliant financial institution with a solid financial position and robust liquidity. The combined assets of both banks are around QAR 80 billion, with shareholders' equity of about QAR 12 billion based on 31 December 2018 financial results. The merger will result in a large entity that will have a 6% share of Qatar's overall banking market and makes Barwa Bank and ibq more competitive to tap into big-ticket projects. Furthermore, the new entity will have a diverse financing and depositor's profile, diversifying risk and strengthening the business proposition of the combined entity, given the individual segmental strengths of Barwa Bank and ibq.