Building bridges for global investors

Reading Time: 5 minutes
Andrew C Stevens, CEO of Commercial Bank of Qatar

Commercial Bank of Qatar (CBQ), one of the largest financial institutions in the GCC upholds a robust reputation as a lead financier of syndicated loans across the Middle East region, offering a range of comprehensive financial services for corporations and consumers in Qatar, UAE and Oman.

Inside Investor spoke to Andrew C Stevens, Group CEO, about the bank’s current success and vision forward.

With a well-developed network, the Commercial Bank of Qatar has steadily evolved into a successful local financial institution with global reach. The bank caters to all segments, from corporate customers, public institutions, small and medium businesses to salaried and self-employed individuals. It is what Stevens calls the “universal banking approach.”

“We strive to cater to our customers’ needs, and, in that respect, we have developed a universal banking model to serve our core market in Qatar efficiently,” Stevens said.

“Traditionally, we were focused on commercial banking; we diversified to retail at a later stage,” he added.

“Today, in terms of sheer balance sheet weight, the corporate banking segment still represents 70 per cent of our operations.”  He pointed out that the ratio is healthy for the bank and is not expected to change soon.

“The banking environment in some segments is oversaturated. Every bank has a retail proposition which makes this segment the most competitive of all segments in the market today. It remains to be seen if we expand further into retail, because we are very selective at identifying the right opportunities” Stevens said.

CBQ’s corporate offering is going from strength to strength, specifically through their involvement in large domestic transactions for both public and private institutions in Qatar. While the private sector touches both hydrocarbon and non-oil segments, government clients include entities such as Qatar Petroleum, Qatar Foundation, and other related institutions. Their largest deal in the last six months was the Barzan gas project, where CBQ acted as the lead arranger of the $2 billion financing transaction.

“Our business is organized in a way that allows us to concentrate equally on inbound investment as well as the domestic market. There are a multitude of foreign companies which either come to Qatar to setup a new business or office, or are already established here. We work with a vast network of correspondent banks which are directing their own domestic clients to us,” Stevens said.

The economic surge in Qatar and the subsequent interest from the global financial and business industry is generating further business for the bank. Given CBQ’s strong foothold in international capital markets, the bank receives a great number of referrals from its global correspondents, which direct general enquiries on Qatar directly to CBQ.

”We provide a very important bridge between those coming into the country and those that are already here. Subsequently, we can also assist investors in setting up operations in Qatar and facilitate their entry into the market by providing relevant financial services and opportunities to them,” Stevens said.

On the domestic front, prospects appear favorable for the foreseeable future as the Qatari government has recently announced a number of significant infrastructure projects and is also preparing for the upcoming Qatar 2022 FIFA World Cup. CBQ is primed to support this economic expansion, including projects related to new airports, seaports, gas sector development, or electricity generation and distribution.

“If a company approaches us with the need to raise funds for projects related to the 2022 World Cup or other developmental projects, we are happy to discuss it and be involved. This is very much part of our core business and enables us to fulfil our commitment towards the economic development of the nation,” Stevens said.

He added that he expects more announcements to be made by the government on projects related to the World Cup in the next six months, potentially with relation to the expansion of the airport as well as the planned rail transport system.

Stevens believes that the nation benefits from stable monetary policies and financial regulations that ensure steady economic growth and facilitate a consistent, healthy financial and business environment. While the 2008 recession caused chaos in developed markets across the globe, Qatar maintained its five per cent interest level in the face of the financial crisis, combating inflation. In 2011, the central bank began to modify its lending rates, reducing rates by 0.5 per cent, the first change in five years, which prompted an increase in private sector credit growth of about 20 per cent.

“It’s a very credible monetary policy, especially in light of continuing economic stress in the developed economies to date. The economy is quite resilient in Qatar, it is continuing to grow at double-digit rates, the inflation has been brought down, and the banks are well capitalised, enjoying the lowest non-performing loans ratio in the entire GCC,” Stevens said.

“There is a healthy balance between the cost of credit and the money supply and other factors around that. The banking system is strongly supported and supervised by the government, and the Ministry of Finance and the Qatar Central Bank are doing a great job, which in turn, facilitates all the growth, economic and infrastructure development that we are currently witnessing.” he added.

Simultaneously, the bank is broadening is regional footprint based on a focussed acquisition strategy. In 2005, CBQ acquired 35 per cent of the National Bank of Oman, and in 2008, it bought a 40 per cent stake in the United Arab Bank of Sharjah (UAB).

“Our strategy is to acquire important major stakes of neighbouring institutions, whether they are banks or financial institutions, as opposed to opening regional branches for commercial banking in the GCC,” Stevens said.

CBQ is implementing operational synergies with the acquired banks and works closely with them when major financing opportunities arise. This regional strategy has been in progress for seven years, and CBQ now has a strong footprint in three of the six GCC countries. In the UAE, the bank currently runs a 20 branch operation across all seven emirates through UAB, and in Oman, it has 65 branches in all the major cities and in the hinterland as well.

Internationally, CBQ cooperates with Hana Bank from Korea, with which it has signed an intrinsic bilateral trade and investment agreement. CBQ also maintains strong and long-lasting relationships with multinational financial institutions as its international correspondent banks. It has agreements with close to 60 banks for bilateral accounts, client exchange, and trade activities.

“Collectively, with our efforts on the domestics, regional and international front, in 2011, we achieved a ‘record net profit of 15 per cent over 2010 which allowed us to payout a cash dividend of 78 per cent to our shareholders at our Annual General Meeting. However, our success will not make us complacent, on the contrary, our forward strategy is to focus on growth sectors of the economy and diversify further into new lines of business while we continue to raise the bar on our existing portfolio,” Stevens said.

 

 

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

Reading Time: 5 minutes

Andrew C Stevens, CEO of Commercial Bank of Qatar

Commercial Bank of Qatar (CBQ), one of the largest financial institutions in the GCC upholds a robust reputation as a lead financier of syndicated loans across the Middle East region, offering a range of comprehensive financial services for corporations and consumers in Qatar, UAE and Oman.

Reading Time: 5 minutes

Andrew C Stevens, CEO of Commercial Bank of Qatar

Commercial Bank of Qatar (CBQ), one of the largest financial institutions in the GCC upholds a robust reputation as a lead financier of syndicated loans across the Middle East region, offering a range of comprehensive financial services for corporations and consumers in Qatar, UAE and Oman.

Inside Investor spoke to Andrew C Stevens, Group CEO, about the bank’s current success and vision forward.

With a well-developed network, the Commercial Bank of Qatar has steadily evolved into a successful local financial institution with global reach. The bank caters to all segments, from corporate customers, public institutions, small and medium businesses to salaried and self-employed individuals. It is what Stevens calls the “universal banking approach.”

“We strive to cater to our customers’ needs, and, in that respect, we have developed a universal banking model to serve our core market in Qatar efficiently,” Stevens said.

“Traditionally, we were focused on commercial banking; we diversified to retail at a later stage,” he added.

“Today, in terms of sheer balance sheet weight, the corporate banking segment still represents 70 per cent of our operations.”  He pointed out that the ratio is healthy for the bank and is not expected to change soon.

“The banking environment in some segments is oversaturated. Every bank has a retail proposition which makes this segment the most competitive of all segments in the market today. It remains to be seen if we expand further into retail, because we are very selective at identifying the right opportunities” Stevens said.

CBQ’s corporate offering is going from strength to strength, specifically through their involvement in large domestic transactions for both public and private institutions in Qatar. While the private sector touches both hydrocarbon and non-oil segments, government clients include entities such as Qatar Petroleum, Qatar Foundation, and other related institutions. Their largest deal in the last six months was the Barzan gas project, where CBQ acted as the lead arranger of the $2 billion financing transaction.

“Our business is organized in a way that allows us to concentrate equally on inbound investment as well as the domestic market. There are a multitude of foreign companies which either come to Qatar to setup a new business or office, or are already established here. We work with a vast network of correspondent banks which are directing their own domestic clients to us,” Stevens said.

The economic surge in Qatar and the subsequent interest from the global financial and business industry is generating further business for the bank. Given CBQ’s strong foothold in international capital markets, the bank receives a great number of referrals from its global correspondents, which direct general enquiries on Qatar directly to CBQ.

”We provide a very important bridge between those coming into the country and those that are already here. Subsequently, we can also assist investors in setting up operations in Qatar and facilitate their entry into the market by providing relevant financial services and opportunities to them,” Stevens said.

On the domestic front, prospects appear favorable for the foreseeable future as the Qatari government has recently announced a number of significant infrastructure projects and is also preparing for the upcoming Qatar 2022 FIFA World Cup. CBQ is primed to support this economic expansion, including projects related to new airports, seaports, gas sector development, or electricity generation and distribution.

“If a company approaches us with the need to raise funds for projects related to the 2022 World Cup or other developmental projects, we are happy to discuss it and be involved. This is very much part of our core business and enables us to fulfil our commitment towards the economic development of the nation,” Stevens said.

He added that he expects more announcements to be made by the government on projects related to the World Cup in the next six months, potentially with relation to the expansion of the airport as well as the planned rail transport system.

Stevens believes that the nation benefits from stable monetary policies and financial regulations that ensure steady economic growth and facilitate a consistent, healthy financial and business environment. While the 2008 recession caused chaos in developed markets across the globe, Qatar maintained its five per cent interest level in the face of the financial crisis, combating inflation. In 2011, the central bank began to modify its lending rates, reducing rates by 0.5 per cent, the first change in five years, which prompted an increase in private sector credit growth of about 20 per cent.

“It’s a very credible monetary policy, especially in light of continuing economic stress in the developed economies to date. The economy is quite resilient in Qatar, it is continuing to grow at double-digit rates, the inflation has been brought down, and the banks are well capitalised, enjoying the lowest non-performing loans ratio in the entire GCC,” Stevens said.

“There is a healthy balance between the cost of credit and the money supply and other factors around that. The banking system is strongly supported and supervised by the government, and the Ministry of Finance and the Qatar Central Bank are doing a great job, which in turn, facilitates all the growth, economic and infrastructure development that we are currently witnessing.” he added.

Simultaneously, the bank is broadening is regional footprint based on a focussed acquisition strategy. In 2005, CBQ acquired 35 per cent of the National Bank of Oman, and in 2008, it bought a 40 per cent stake in the United Arab Bank of Sharjah (UAB).

“Our strategy is to acquire important major stakes of neighbouring institutions, whether they are banks or financial institutions, as opposed to opening regional branches for commercial banking in the GCC,” Stevens said.

CBQ is implementing operational synergies with the acquired banks and works closely with them when major financing opportunities arise. This regional strategy has been in progress for seven years, and CBQ now has a strong footprint in three of the six GCC countries. In the UAE, the bank currently runs a 20 branch operation across all seven emirates through UAB, and in Oman, it has 65 branches in all the major cities and in the hinterland as well.

Internationally, CBQ cooperates with Hana Bank from Korea, with which it has signed an intrinsic bilateral trade and investment agreement. CBQ also maintains strong and long-lasting relationships with multinational financial institutions as its international correspondent banks. It has agreements with close to 60 banks for bilateral accounts, client exchange, and trade activities.

“Collectively, with our efforts on the domestics, regional and international front, in 2011, we achieved a ‘record net profit of 15 per cent over 2010 which allowed us to payout a cash dividend of 78 per cent to our shareholders at our Annual General Meeting. However, our success will not make us complacent, on the contrary, our forward strategy is to focus on growth sectors of the economy and diversify further into new lines of business while we continue to raise the bar on our existing portfolio,” Stevens said.

 

 

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid