Interview: Ali Ahmed Al Kuwari
As Qatari banks continue to expand their international presence, how can they better capitalise on opportunities within their existing network?
ALI AHMED AL KUWARI: Qatari banks may leverage the potential between their local and international businesses by adopting a global account management model. This will better serve multinational customers, deepen relationships with existing customers, provide enhanced crossselling opportunities and also introduce innovative offerings that better cater to customers’ needs. In short, these initiatives would increase the penetration of existing clients and better capture the latent opportunities currently available across networks.
What impact could the continuous growth of the population have on provisioning and non-performing loans (NPLs)? How can such risks be mitigated?
AL KUWARI: Qatari banks have a generally conservative approach to lending. This engenders a strong risk governance mentality, generates a clear definition of risk appetite, and promotes prudent risk management at consolidated and local levels. The overall risk management and credit process will continue to evolve as highlighted by the recent creation of the credit bureau and its introduction of a scorecard concept to facilitate and provide sophisticated customer data. Thus, we expect NPLs to continue to remain low in 2015-16.
What opportunities exist for local banks to take part in the government’s drive to enhance small and medium-sized enterprises (SMEs)?
AL KUWARI: The growth of the private sector and the nurturing of SMEs are both key pillars of Qatar National Vision 2030. This requires a shift from the public to the private sector, which is progressively taking place. The government consequently acts as an incubator to nurture the growth of this segment. The vision also aims to transform the State of Qatar into a service and knowledge-based economy, further promoting growth in sectors such as education, health care and trade.
The SME sector is a key growth driver for the Qatari corporate banking sector, and Qatari banks will continue to assist and promote SMEs to enhance their businesses’ competitiveness and sustainability.
Given the saturation in the local retail banking industry, what potential exists for sector players to look abroad to increase their customer base?
AL KUWARI: The local retail banking industry witnessed further sophistication in recent years, which resulted in innovative and attractive offers including mobile banking, card offerings, loyalty programmes and bancassurance products. Realising that different customer segments have different needs, Qatari banks developed dedicated offerings for these segments and also created sub-segments to better cater to specific customer requirements, such as those of women, students and expats. Qatar’s retail banking offerings are strong enough to be customised to other markets.
New potential markets would be considered from the following perspectives: the macroeconomic outlook; banking sector penetration and growth potential ( competitive attractiveness); and regulatory requirements for market entry. QNB Group, for instance, continues to witness robust expansion in several markets.
As an innovative international financial institution that operates in more than 26 countries and across three continents, QNB has a vision to become an icon in the Middle East and Africa by 2017. In line with this vision, QNB Group acquired a 19.4% stake in Ecobank Transnational, a leading pan-African bank that has a presence in 36 countries across the African continent. This strategic partnership is another fundamental step in QNB’s international expansion plans.
Importantly, this expanding global presence is supported by a strong financial performance and an impressive brand equity that has seen QNB become the most valuable banking brand in the Middle East and Africa in 2015, with a global ranking of 79th and a brand value of $2.6bn, according to Brand Finance magazine.
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