Fitch upgrades QIIB rating to 'A' with stable outlook

Fitch Ratings upgraded its credit rating of QIIB to ‘A’ from ‘A-‘, which follows a similar rating action on Qatar’s sovereign on March 20 to ‘AA’ with a stable outlook.On the rationale behind upgrading the rating of QIIB, Fitch stated that it reflects the agency's view on the increased ability of support that the bank can get from the Qatari Government if needed.Additionally, the Qatari government demonstrates a strong propensity to support all local banks regardless of their size or ownership.In its previous report on QIIB in September last year, Fitch affirmed: "The bank exhibits financial strength, a strong market position, sufficient core capital, good asset quality, strong profitability, and stable funding."Fitch further added: "QIIB's profitability metrics are stronger than its direct peers due to profit margins and effective cost management. The bank primarily relies on customer deposits to finance its operations, which largely come from individuals. Therefore, the concentration in the deposit base is lower than its local peers."Additionally, QIIB's reliance on external funding is also lower than its counterparts. Moreover, the bank holds ample liquid assets supporting its financial position."Commenting on Fitch's upgrade of QIIB's rating, Chief Executive Officer, Dr Abdulbasit Ahmad al-Shaibei stated: "We are undoubtedly pleased with this upgrade, which we owe to our high resilience and the strong position of the Qatari economy. Qatar's economic strength propels the entire banking sector to further enhance its financial position."He affirmed: "This upgrade in QIIB's rating by Fitch aligns significantly with our efforts and plans to harmonise with the Qatar Central Bank’s Third Financial Sector Strategy. It also amplifies our desire to contribute to the advancement of our country and society, in line with the Qatar National Vision 2030.""QIIB adopts a market-focused strategy, and we are interconnected with various sectors. We have forged extensive partnerships with local businesses and continue to capitalise on the numerous growth opportunities offered by the national economy, enabling us to consistently achieve stable growth figures."He stated: "With every achievement and progress we make, we feel additional significant responsibilities resting on our shoulders. Sustaining growth, enhancing performance indicators, elevating competitiveness, and turning challenges into opportunities are continuously pursued goals. Our ambition never wanes as we strive for the best results and contribute to serving our nation and society."Dr al-Shaibei pointed out: "QIIB has made numerous strides in the recent past that could be pivotal in the bank's journey, including accomplishing a significant portion of its digital transformation plan, enhancing operational efficiency, and achieving growth rates considered among the best in the banking sector. The bank will continue to work with renewed vigour to achieve optimal results and indicators.”