Qatar First Bank L.L.C. (Public) “QFB”, a leading Shari’ah compliant bank based in Qatar, regulated by QFCRA and listed on the Qatar Stock Exchange (QSE), released its financial results for the three-months period ended 31 March 2020. This disclosure comes amid the current unprecedented conditions of the COVID-19 virus crisis, which has shown a negative impact on the financial results of many sectors and companies around the world, especially the financial and banking sector.
The bank core business, aside from COVID-19 negative impact, recorded a profit of QAR 12.3 million attributable to equity holders of the bank compared with a net profit of QAR 3.2 million of the same period of 2019. However, in line with the accounting standards and best practices in place by regional and international banks, and in view of the global macroeconomic conditions, one-time reserve provisions have been made in order to confront the risks of the COVID-19 crisis. This resulted in a recoded net loss of QAR 191.6 million arising from making these COVID-19 conservative provisions, which amounted to QAR 203.9 million.
Additionally, in line with Bank’s adopted strategy on cost efficiency, total expenses were decreased by 15% to QAR 22.9 million compared to same period of 2019. Setting aside COVID-19 negative impact, total income also increased by 7% to QAR 34.2 million as compared with the same period of 2019. Bank highlights for the quarter, income from structured products has increased by 27% as compared with the same period of 2019.
HE Sheikh. Faisal bin Thani Al-Thani, QFB Chairman, commented:
“Despite the bank’s good operational performance over the first quarter where the overall adopted strategy objectives were realized, the unexpected crisis of the COVID-19 had a significant negative impact on the announced results. It entailed one-off provisions in line with the best practices in place by regional and international banks, however, the good news the good operational results is a clear indication of the success of the new strategy and its profitability even in light of these unfavorable and unprecedented macroeconomic conditions. The success of the strategy invites us to adopt an optimistic outlook for the bank and its business model.”
Furthermore, fee income from structured products has increased by 27% as compared with the same period of 2019. QFB shall continue to harness the opportunities created through revised strategy where our key priority is sustainable organic growth of the bank’s customer base of high net worth Individuals, institutional investors and government related entities.
The bank is currently working on developing new products and exploring good investment opportunities. It also aims to enhance product portfolio and diversify investment options it offers to customers. It extremely exercise due diligence to assess, review and analyze any variables that arise from changing macroeconomic conditions in order to achieve discounted acquisitions of assets as good opportunities are usually availed in times of crisis.
In line with this new strategy, the bank announced earlier that it has successfully completed the $117 million off-market acquisition of 90 North office campus located in Bellevue, Washington. This acquisition was QFB’s 6th product offerings and 4th in the US real estate market offering investors access to international investment opportunities through Investment Management Platform. It was also a strong testimony of QFB’s key focus on its strategy of offering innovative financial solutions with greater returns to the bank’s clients of high net worth Individuals, institutional investors and government related entities. The product offered an investment in a stable mature market. This investment provided clients with ten years of strong, credit-backed contractual cash flows with minimal capital obligations and a best-in-class asset in a market characterized by large, market-leading companies such as Microsoft, T-Mobile, Nintendo, REI, Amazon, Google, Facebook, Oculus, Costco, AT&T, and Boeing.
QFB also made earlier a successful exit along with its investors through the sale of two Boeing 737-900ER aircrafts, which is its second sharia-compliant aviation deal. The two aircrafts were on a 7-year long-term sharia-compliant lease contract to Indonesia’s Lion Air. Interestingly, this is the first deal of its kind that the bank is undertaking in the field of aviation through the global investment management platform that the bank launched and attracts increased opportunities for its clients and investors. Noteworthy this investment product has achieved for its holders a cash dividend of 9% annually, whereby the profits are distributed every three months, while the internal return on investment of the product is about 12%.