Qatar First Bank’s (QFB) total assets didn’t decline during 2016 despite the write-down of QFB’s investment book and closed at almost QR6 billion ($1.64 billion), mainly driven by the increase from financing assets, which increased by 33 per cent, said the bank’s chairman.

Abdulla Bin Fahad Bin Ghorab Al Marri  was speaking at the bank’s recent Annual General Meeting (AGM) to discuss the bank’s results and future outlook after releasing financials for the year ended December 31, 2016and announcing the launch of the second phase of the cost rationalisation plan.

The AGM was held at the Le Crillon Ballroom at La Cigale Hotel in Doha - Qatar.

 “The year 2016 saw several key economic events that contributed to the stagnation of the global economy. The depreciation of major currencies, the plunge in oil prices, and the many country-specific macroeconomic and extraordinary factors; have all furthered the slowdown of the global economy. Closer to home, the geo-political unrest continues to hamper the growth of the Mena economies. Qatar, despite being one of the best performing economies in the GCC, has faced several challenges,” Al Marri added.

“At QFB we were not immune to the prevailing global economic scene. We have recorded losses, the majority of which are unrealized, resulting mainly from the downward revision of the valuations of some of our private equity investments across several markets."
The investment portfolio continued to generate healthy dividends (QR13 million). QFB’s Sukuk book continued to generate positive returns close to QR30 million. Last but not least, the bank’s income from placement with financial institutions has tripled mainly from cash deployment in Shari’ah-compliant money market funds.

In line with QFB’s strategy, the bank will continue to seek exits on its existing investment portfolio book with the objective of maximizing value to shareholders and clients at opportune times; and to reinvest the proceeds in lucrative opportunities that will contribute positively to the bank’s returns, a statement said.

Al Marri said: “The major challenges in the global investment market and the downward revision of our private equity investments have resulted in clearly disappointing results. Aside from these results, we continued urging the executive management to execute our strategy and focus on the most lucrative areas. Our aim was to fully match the evolution of the wider region’s investment direction, as well as continue to act as the gateway for investors, while building on our successes in the private equity area.”

Ziad Makkawi, QFB’s CEO, said: “2016 witnessed several key economic events, marked by economic volatility and challenges across our target markets, which caused us to record losses, resulting mainly from the downward revision of fair value gains recorded in previous years.”

Makkawi continued: “Our strategy, going forward, focuses on our role as a trusted advisor, a gateway for investors who wish to tap into innovative, Shari’ah compliant, investment opportunities in local, regional and global markets. QFB will continue to diversify our portfolio, tapping into new and attractive geographical markets.

“The bank is well positioned to provide capital solutions to growing businesses in the region, utilizing our expertise and network. We look to partner with market leaders, private and institutional investors, attracting third party money with the objective to create value while following international best practice and the highest levels of corporate governance.”

QFB aims to continue building its distribution and placement capability. Investment opportunities and financial solutions are personalized to the goals and risk profile of both individual and corporate clients. To support this initiative, the bank has signed several agreements with internationally recognized players expanding the range of offerings to meet the changing needs of clients across several markets.

Alongside the distribution and placement capability, QFB will continue working with its strategic shareholders and clients, enabling the bank’s team to benefit from the wider network and from access to regional and international markets.

“2016 was a difficult and challenging year for QFB and our shareholders. However, the changes instituted are the necessary first steps in laying the foundations for a successful future,” Makkawi said.

“We recognize that there is still a considerable amount of work to be done, but we take comfort in the prospect of new business opportunities after refocusing our efforts on alternative investments. In particular, the combination of capabilities in private equity, real estate, and product structuring solutions; with dedicated origination and placement capacity; will create a business model that we hope to produce genuine growth and profitability for the bank.”

Al Marri concluded: “Looking ahead we envision that the global economic backdrop will remain challenging specifically as the GCC region adjusts to low oil prices and slowing economic growth. In spite of these challenges QFB will continue adopting an opportunistic outlook to source viable investment opportunities that surface in such market conditions in order to generate sound returns for the Bank, our clients and shareholders.” – TradeArabia News Service