MGR: Doha Bank continued the robust growth amidst these turbulent times with a 8.2% increase in profit in the first half of 2022, compared with the same period last year. Please give us an overview of the Bank; past, present, and key highlights.
DB: Founded in 1979, Doha Bank is one of Qatar’s top conventional banks. We proudly host fully operational branches in Qatar, the UAE (Dubai & Abu Dhabi), India (Mumbai, Chennai & Kochi), and Kuwait (Kuwait City), as well as 14 representative offices in key markets, including China, Singapore, Japan, the UK, Australia and South Africa. This makes us the largest provider of representative branches among Qatari banks and ensures a strong global footprint over five continents. We also maintain a brokerage and financial services associate in India, as well as the Sharq Insurance Company, our fully-owned subsidiary and one of Qatar’s top insurance providers.
Being a well-established banking franchise with strong brand values, a diversified shareholder base and strong capital and liquidity management, we maintain our strategy of healthy diversification within our income and asset portfolios. That, paired with a pointed focus on digitization and our commitment to ESG and Sustainable Business Practices have been crucial factors in our continued upward growth over the past year.
Key highlights from Doha Bank’s first-half performance include:
- Deposit growth YTD up +6.6%
- CASA ‘low-cost’ deposits have improved YTD 7.2%
- Loan Growth Q2 2022 1.2% from Q1 2022
- Net Fee & Commission Income growth 22.6% year on year
- Investment in securities growth USD 220 M year on year
- Net impairments down 18% year on year, while coverage improved from 56.7% in Q1 2022 to 62.3% in Q2 2022
MGR: Since establishing diplomatic relations with Qatar in 1972, the US has grown to be the country’s largest foreign direct investor and its single largest source of imports. Please explain Doha Bank’s existing relations with the US.
DB: The bank in years past has always been a supporter of US relations. In coordination with the US Embassy Qatar branch and in particular to visiting corporates and selected Chamber of Commerce visitors, the bank has always been on hand to making introductions to local corporate personalities, and more importantly presenting a banking solution for their local needs. We are committed, moving forward to providing the same.
MGR: What opportunities are there for US investors and corporations to do business in Qatar with Doha Bank?
DB: Doha Bank’s business banking model covers Retail Banking, Private Banking, Treasury & Investments, Wholesale Banking (including Trade Finance), International Banking and an Insurance subsidiary. As a reputed and established banker in Qatar, one can count on this comprehensive range of local and global financing and investment options to facilitate American and international investments and partnerships with highly reputable Qatari and Middle eastern businesses.
Our fully-fledged International Banking Group, complemented by our wide network of overseas offices, effectively deliver a full range of cross-border finance solutions to our overseas clientele.
Investors in the US would be well advised to consider opportunities in the ever-growing Qatari market. Qatar offers a stable and resilient economy, located at a strategic gateway between the east and west, with 2 billion people employed across 25 economies and 6 trillion dollars in combined GDP – all within a short 3,000 km stretch. This, combined with award-winning infrastructure, a young and highly educated talent pool, a supportive business environment and unparalleled lifestyle perks including living in the world’s safest country and benefiting from one of the world’s best healthcare systems, makes Qatar the perfect home in the Middle East for any business.
- 1st in Entrepreneurship in the Arab World
- 2nd in Global competitiveness in the Arab World
- 4th highest GDP per capita globally
- Up to 100% foreign ownership policies
- 0% personal income tax
- Qatari Riyal pegged to the USD
- #1 safest country globally
- Among the most resilient and advanced Banking and Financial sectors in the region
As per the World Bank Group, Qatar’s economic growth is projected to continue, with 4.9% GDP growth in 2022 and 4.5% in 2023. Qatar anticipates that natural gas will remain a key part of the global energy mix for decades to come and will play a central role in the global transition to a low carbon energy system. Qatari economic growth in the next decade will be supported by the North Field Expansion mega project (approx. USD 50bn investment), which will increase LNG production from 77m tons to 110m tons by 2027.
The Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund was founded by the State of Qatar in 2005 to strengthen the country’s economy by diversifying into new asset classes. In 2021, the QIA had an estimated $450 billion in assets; in line with increasing and strengthening its investments in the US market, the QIA plans to invest $35 billion into the country over the next five years, creating thousands of American jobs.
Qatar’s economic policies have also provided support for various sectors and bolstered their contribution to economic growth, thus strengthening and enhancing investor confidence in the national economy. The country’s Qatar National Vision 2030 aims to establish an advanced, knowledge based, and diversified economy, with reforms to foreign investment laws now allowing 100 % foreign ownership of businesses in most sectors.
Of particular significance is the legislation put in place by Qatar in 2020 to attract and encourage investment, including the law regulating the Public-Private Partnership (PPP), which established the appropriate legislative framework to improve governance, risk management, and enhance competition and innovation. This law provided investors with the opportunity to finance, develop, and operate projects in a variety of sectors, including food security, sports, tourism, health, education, and logistics.
In 2021, the Qatari cabinet approved 100% foreign ownership of registered companies except in specific areas. The approval of full foreign ownership of listed banks followed in August 2022. Qatar does not charge a personal income tax, and corporate tax is set at 10% for most businesses. Also, over last several years, reforms have been made in the labour market and private sector participation to improve equity and competitiveness.
Foreign investors can launch their business in Qatar through several vehicles e.g., limited liability companies, foreign companies’ branches, trade representative offices, commercial agencies, etc. Investors can also setup businesses in:
- Qatar Free Zones (according to Free Zones Law, limited liability companies, partnerships, or any other types of companies or entities, may be established in the free zones, whether natural or legal persons own any such entity, by either nationals, residents, or others; without complying with the restrictions prescribed by the relevant laws regarding non-Qatari capital percentage for companies) or
- Qatar Financial Center (the QFC has an independent legal, tax and regulatory framework that are based on international standards. However, undertaking any activity in the QFC according to a license issued pursuant to the QFC Law and the QFC regulations shall not be considered in violation of any criminal law or any other law applicable in Qatar)
In order to obtain permanent residency in Qatar for themselves and their families, a foreigner must rent or own property amounting to at least QAR 730,000 (US$ 200,000) and reside in the country for at least 90 days each year. For foreigners who own or rent property valued at QAR 3.7 M (US$ 1 M) or more, permanent residency is available with the benefits of free health care and education. Expats who wish to take out a mortgage can borrow up to US$ 0.823 Mn from a Qatari bank and typically only furnish a down payment of 30%.
Regarding the Banking and Financial sector, Qatar is ideally positioned to act as a commercial and operating hub for FinTech’s. The Qatar Central Bank (QCB), along with governmental agencies such as the Qatar Financial Center (QFC) are actively implementing strategies that allow sector players to benefit swiftly and efficiently from the many fintech initiatives on the horizon. The Qatar FinTech Hub, for example, brings together several FinTech entrepreneurs, industry experts, regulators, and investors to create a flourishing ecosystem that will bolster developments in the Qatari economy going forward.
Qatar and the US share a long history of commercial partnership and US firms will find many opportunities for export and investment in the Qatari economy, especially in infrastructure, healthcare, education, tourism, energy, information, and communications technology services
Gudni Stiholt Adalsteinsson
MGR: What is your final message to our readers in Washington DC and the US in general, regarding the future of Doha Bank and its relations with the US?
DB: US companies and their technology have been critical to Qatar’s efforts to drive sustainable economic diversification and improve the quality of life of its residents. Qatar and the US share a long history of commercial partnership and US firms will find many opportunities for export and investment in the Qatari economy, especially in infrastructure, healthcare, education, tourism, energy, information, and communications technology services.
With the country’s investment-friendly ecosystem, including the Qatar Financial Centre, Qatar Science & Technology Park, and Qatar Free Zones, the country is now well positioned to help American companies tap into Qatar’s domestic market, as well as the wider surrounding regions.
Considering the potential of US-Qatar Strategic relations and business opportunities, Doha Bank will continue its role as a partner bank to several US banks and businesses in the GCC. In addition, we will explore further prospects of creating and facilitating better business opportunities and partnerships in the US-Qatar and US-GCC corridors.