Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
UAE
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Earlier this month Fitch Ratings affirmed Qatar Islamic Bank's (QIB) ratings at Long-term Issuer Default (IDR) ‘A' with Stable Outlook, Short-term IDR ‘F1', Individual ‘C' and Support ‘1'. Fitch also affirmed the Support Rating Floor at ‘A'.
Fitch said that QIB's IDRs and Support Rating reflect the extremely high probability of support from the Qatari authorities, if needed; a view that has been reinforced by Qatar's support measures since the beginning of 2009 for the local banks. The Stable Outlook reflects Fitch's opinion that Qatar's credit fundamentals remain strong despite the global and regional downturn.
Meanwhile, Fitch said that the Individual Rating (or standalone strength) reflects QIB's leading Islamic franchise (around 50 percent share of Islamic assets and nine percent overall market share of system assets), high earnings power from core banking and healthy capital ratios.
The rating is constrained, however, by QIB's high exposure to real estate and retail sectors which could translate to sharply higher credit defaults/impairment charges in the next few reporting periods.
QIB was incorporated by an Emiri decree in 1982 as Qatar's first Islamic bank and is now the fourth largest commercial bank in the system. Listed on the Qatar Stock Exchange, the QIA owns a five percent stake, which is likely to be increased to ten percent by end-2009.
QIB operates under an Islamic banking licence issued by the Qatar Central Bank, which means that all of its banking operations must be fully compliant with Sharia law.
Fitch said that QIB's IDRs and Support Rating reflect the extremely high probability of support from the Qatari authorities, if needed; a view that has been reinforced by Qatar's support measures since the beginning of 2009 for the local banks. The Stable Outlook reflects Fitch's opinion that Qatar's credit fundamentals remain strong despite the global and regional downturn.
Meanwhile, Fitch said that the Individual Rating (or standalone strength) reflects QIB's leading Islamic franchise (around 50 percent share of Islamic assets and nine percent overall market share of system assets), high earnings power from core banking and healthy capital ratios.
The rating is constrained, however, by QIB's high exposure to real estate and retail sectors which could translate to sharply higher credit defaults/impairment charges in the next few reporting periods.
QIB was incorporated by an Emiri decree in 1982 as Qatar's first Islamic bank and is now the fourth largest commercial bank in the system. Listed on the Qatar Stock Exchange, the QIA owns a five percent stake, which is likely to be increased to ten percent by end-2009.
QIB operates under an Islamic banking licence issued by the Qatar Central Bank, which means that all of its banking operations must be fully compliant with Sharia law.
Pipe dreams
Posted by TALAL on 20 December 2009 at 18:19 UAE time
With all due respect the list in not only wrong but misleading as well. I agree with Paddy that you need to come up with more meaningful criteria for ranking Banks as this doesn't work at all. When new financial results are out next year at least 3 on the list may end up up the creek without a paddle.
Posted by TALAL on 20 December 2009 at 18:19 UAE time
With all due respect the list in not only wrong but misleading as well. I agree with Paddy that you need to come up with more meaningful criteria for ranking Banks as this doesn't work at all. When new financial results are out next year at least 3 on the list may end up up the creek without a paddle.
Agree with the list
Posted by SG, Kuwait, Kuwait on 9 December 2009 at 09:50 UAE time
I have been working in the corporate banking field for over 5 years now and the banks listed above are quite secure. Choosing randomly and checking the historic audited financials you will see that these banks have been taking adequate provisions over the years unlike banks like Commercial Bank of Kuwait that took extreme sudden provisions making them reporting losses in 3Q of 09 whereas KD100m for the same period the previous year; that goes to show the type of credit they run. As for all the questions Paddy is asking, well an article that answers all those questions might as well be a book cos you are asking for financial analyses of each bank which could easily need 100 pages or so (4 pages each minimum). This report is a morale booster but is based on financials issued by the best international auditors. and, by the way, i do not work in any of those top banks but i intend to.
Posted by SG, Kuwait, Kuwait on 9 December 2009 at 09:50 UAE time
I have been working in the corporate banking field for over 5 years now and the banks listed above are quite secure. Choosing randomly and checking the historic audited financials you will see that these banks have been taking adequate provisions over the years unlike banks like Commercial Bank of Kuwait that took extreme sudden provisions making them reporting losses in 3Q of 09 whereas KD100m for the same period the previous year; that goes to show the type of credit they run. As for all the questions Paddy is asking, well an article that answers all those questions might as well be a book cos you are asking for financial analyses of each bank which could easily need 100 pages or so (4 pages each minimum). This report is a morale booster but is based on financials issued by the best international auditors. and, by the way, i do not work in any of those top banks but i intend to.
Tangible evidence missing
Posted by Paddy, Dubai, UAE on 26 November 2009 at 00:04 UAE time
The report talks about the performance of each bank at a very high level without delving deep into the numbers. For example, what is the net NPL for each bank in comparison with their assets? What is the exposure ratio (total exposure to the risky sectors out of the total assets) of each bank to risky sectors like Credit Cards, Construction & Real Estate etc? What is the recovery position with respect to Credit Card advances? What is the exposure of each bank (especially UAE and Saudi banks) to the Saad and Algosaibi groups? Have they kept aside provisions against these troubled assets? What has each bank done differently to tide over the financial crisis? HAs there been any fresh capital infusion into any of these banks? What is the Capital Adequacy Ratio of these banks? The lack of transparency with regard to reporting in the Middle East financial sector means that the banks may not have fully reported their bad assets. Maybe the report is intended to be a morale booster to the general public and not exactly based on hard facts.
Posted by Paddy, Dubai, UAE on 26 November 2009 at 00:04 UAE time
The report talks about the performance of each bank at a very high level without delving deep into the numbers. For example, what is the net NPL for each bank in comparison with their assets? What is the exposure ratio (total exposure to the risky sectors out of the total assets) of each bank to risky sectors like Credit Cards, Construction & Real Estate etc? What is the recovery position with respect to Credit Card advances? What is the exposure of each bank (especially UAE and Saudi banks) to the Saad and Algosaibi groups? Have they kept aside provisions against these troubled assets? What has each bank done differently to tide over the financial crisis? HAs there been any fresh capital infusion into any of these banks? What is the Capital Adequacy Ratio of these banks? The lack of transparency with regard to reporting in the Middle East financial sector means that the banks may not have fully reported their bad assets. Maybe the report is intended to be a morale booster to the general public and not exactly based on hard facts.
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