International Bank of Qatar Ideally Positioned to Benefit from Qatar’s Growth

By John Manning – john.manning@internationalbanker.com

With the performance of the Qatar economy exceeding growth expectations for 2013, the International Monetary Fund has expressed optimistic expectations for the country for the upcoming year. The IMF has recorded positive business sentiment across the country, from a variety of private-sector industries, through a series of analyses and surveys. There was a surge in profits for Qatar Exchange-listed firms in 2013 – reflecting growth in demand and momentum for the Gulf nation’s firms. This is in spite of the ongoing economic uncertainty persisting across the globe and in spite of regional political tensions. GDP growth was at a higher rate than expected for 2013 and was driven partly by growth in the non-hydrocarbons sector. This has been in line with government economic targets to diversify profitable industries outside of the historically dominant gas industry. 

Qatar is a frontier market. As the US Fed has tapered its quantitative-easing policy over the last year, the economies of many emerging markets, in general, have suffered. The reduction in US monetary stimulus has seen the value of the currencies of these markets plummet, and the commensurate “knock-on” consequences have ensued. Bucking this trend, however, are the so-called frontier markets – such as Qatar and the United Arab Emirates. Typically emerging markets are more developed than frontier markets and also include countries such as Jordan and Kenya. The MSCI Frontier Markets index has gained 25 percent, while the MSCI Emerging Markets Index has fallen 2.8 percent over the past year – which means these frontier markets have also performed considerably better than many developed markets. Looking at the frontier market of Qatar in particular, this performance presents a growth opportunity as well as a provision of the additional benefits of diversification, due to a relatively low correlation with many other asset classes and geographic regions, in effect leading to strong returns and lower risk – i.e., improved risk-adjusted returns that investors worldwide perpetually seek so fervently. The banking and financial-services sector has kept pace and, in some cases, driven the pace of development and growth through improved services and product-solution offerings – with International Bank of Qatar as a prime example of a leader in the industry and region. 

Airport Road Branch

International Bank of Qatar (ibq), originally titled the Ottoman Bank, is a successful, well-established private-sector bank. The bank was founded in 1956 and has gone through a number of successful ownership transitions since then. Renamed ibq in 2004, the prominent Qatar-based bank offers a full range of services, products and solutions spanning private, retail and corporate banking divisions. ibq has six branches and service centres and 34 ATMs conveniently located across the country. 

International Bank of Qatar is a rapidly developing commercial enterprise that has demonstrated a robust commitment to building long-lasting relationships with its customers. The Bank focusses on providing excellent levels of customer service with a view to making banking simple, convenient and tailored to customer demand and needs. Furthermore, ibq is 30 percent owned by the National Bank of Kuwait (NBK) – one of the most successful and highly rated banks in the Middle East, in addition to being the largest bank in Kuwait. NBK contributes to the management and strategic direction of ibq and has improved the bank’s workings and services considerably. This connection with NBK furthermore provides ibq with a significant competitive advantage. Association with NBK has provided ibq with an extensive international reach that covers numerous major financial centres within Europe, the US, the Middle East and Asia – giving customers improved resource access and a broad range of international services. The remaining 70 percent of the bank is privately owned. 

Further to the bank’s success commercially, ibq is actively involved in social-support projects that contribute directly to improving the well-being of the local community. ibq offers financial and practical support to various corporate social-responsibility projects focussed in particular on education, youth- development, sports, promotion of culture and women-empowerment. 

The bank puts premier customer service as a top priority and has won numerous awards in this regard, including: “Best Credit Card in Qatar” award from the Banker Middle East magazine, “Best Retail Bank in Qatar 2011” from Arabian Business, “Best Customer Service in the Middle East” award for four consecutive years (2008, 2009, 2010 and 2011) from the Banker Middle East magazine and “The fastest moving bank in the Middle East”, June 2009, in The Banker magazine’s “Top 1,000 World Bank Survey 2009″. 

International Bank of Qatar is especially successful and noted for its work and expertise in the area of private banking – winning many awards in this area, such as: “Best Private Bank for Privacy and Security in Qatar”, 2013, Euromoney magazine and “Best Private Banking Services in Qatar”, 2012, Euromoney magazine.

Jabra Ghandour

Most recently, on 20 April 2014, ibq was recognised with the “Private Bank of the Year-Qatar” award by the International Banker 2014 Banking Awards for the Middle East. These banking awards identify the leading organisations within the banking and financial industry that represent the benchmark of achievement, corporate governance, technological advancement and customer service that help to drive economic growth in the countries in which they operate. Commenting on this award for private banking, Jabra Ghandour, Managing Director of ibq, said: “We are truly honoured to be recognized as the ‘Private Bank of the Year in Qatar’. Winning this award underlines our firm commitment towards providing our customers with exemplary service and innovative products, and specially to cater for the evolving needs of our valued private banking clients.” 

Chaouki Daher, Deputy General Manager and Head of Private Banking at ibq, said: “This award is a new addition to the prestigious accolades ibq has received over the years, underlining the Bank’s excellent track record in serving ibq’s valued private banking clients. This Award would not have been possible without our customers’ loyalty and confidence over the past years, and the continued commitment, dedication, and quality service our team offers to our customers.”

Chaouki Daher

The private-banking services division of ibq focusses on investment and service principles centred on the core values of trust, integrity and confidentiality. International Bank of Qatar private banking focusses on serving client needs and goals with an individually tailored approach that is renowned for all-encompassing levels of commitment, dedication and a relationship-focused wealth-management approach. The services at ibq are designed to balance the day-to-day banking requirements with the long–term investment needs of ibq clients. 

Private banking has been developing significantly over the last five years as savvy investors, both locally and across the globe, have sought the best opportunities for their investments. Financial organisations worldwide are seeking opportunities in the Asian and Middle East’s growing private-banking markets to take advantage of the different and unique services and approaches offered in these regions. Wealthy individuals and groups are looking for unique solutions for their wealth management and also the cultural understanding and expertise that are on offer at institutions such as ibq and its Private Banking Division. Private banking across the globe is also adapting to take into account a growing demand for family-wealth planning that will take care of the next generation in the most efficient and return-generating way. Private-banking experts, such as those at ibq, are offering tailored advice to meet this growing demand. This customised approach is the key to success in private banking, in which wealthy individuals often have additional goals beyond financial activities – that can include philanthropic and cultural endeavours designed to provide meaning and identity from that individual’s wealth. Risk-diversification is also a key consideration alongside preservation of asset value when meeting the increasing private-banking needs that have stemmed from a growing middle- and upper-class population across the wider Middle East region. The key to future success in this area will be dependent upon the continued ability to prioritise achieving excellence in the client experience in combination with managing transformational change that is occurring for individuals across society as the global economy recovers and grows. 

Looking closely at the banking and finance sectors in Qatar, the outlook continues as it has over the last year as firmly positive. This is based on the expectation that bank lending will rise with accelerated investment spending, underpinned and driven by high fiscal surpluses. In addition, the growth in domestic-credit facilities and investments will be central to supporting asset growth over the medium term. 

Over the coming years, as the Qatar economy grows, a key consideration will also be around the economic and spending ramifications of the 2022 World Cup. The investment programme in the World Cup is expected to durably and significantly boost private-sector productivity over the coming years as the event approaches. 

Qatar-based firms have indicated that they are optimistic about the country’s economic outlook for the upcoming years. The Qatar government has expressed its targets towards aligning future expenditure commitments with expected revenues to effectively finance the country’s development. This medium-term planning will furthermore help in preparing for downside scenarios – for instance, lower gas and oil prices, or if inflation is higher than expected.