Abdulla al-Raisi was only promoted to the role of CEO of Commercial Bank of Qatar (CBQ) in July last year, but he has already overseen a significant increase in the bank’s profitability.

CBQ’s loan volumes were up during the first nine months of this year as Qatar’s economy continues to grow and its infrastructure projects get off the ground. The lender is also beginning to reap the rewards of its international expansion.

CBQ, along with its associates and subsidiaries, delivered a net profit of about QR1.6bn ($428m) for the first nine months of 2014, marking a 19 per cent increase compared with the same period last year.

Al-Raisi will be hoping the final three months of the year will continue to be profitable and help reverse the slight decline in income recorded last year, when net profit fell to QR1.6bn compared with about QR2bn in 2012.

Increased lending

Much of the growth seen in the first nine months has been driven by the bank’s increased lending and advances activities, which were up 9 per cent to QR70.7bn at the end of September, compared with QR64.9bn in the same period last year.

This rise in lending has mainly been generated by the government, construction, real estate and retail sectors, which are all seeing increasing activity as Qatar pushes forward with its infrastructure spending plans and implementing its Vision 2030 strategy. The latest forecasts by the Washington-based IMF see the country’s GDP growing by 7.7 per cent in 2015.

CBQ is playing a major role in supporting these developments, staying true to the founding principles of the bank when it was first established in 1974.

“Ever since our inception, a commitment was made by the shareholders to ensure we lead the development of this country,” says Al-Raisi. “In healthcare and infrastructure, you can find [CBQ’s] fingerprints. We have financed a lot of projects.”

Al-Raisi has witnessed first hand the role the bank has played in supporting Qatar’s economy, having joined CBQ in 1998 as a branch manager. Moving up through the ranks, he was appointed deputy CEO in 2007 before moving into his current position last year.

Delivering vision

“The role we have and the responsibility we have taken is to be in line with Qatar’s vision,” says Al-Raisi.

That vision includes investing billions of dollars in developing transport, education and healthcare infrastructure in order to improve the standard of living for Qataris and help diversify the economy away from hydrocarbons.

The government is also investing heavily in infrastructure related to the hosting of the 2022 Fifa World Cup.

Last year, CBQ provided QR1.2bn-worth of contract finance to support the Doha Metro project, covering the phase 1A Msheireb station and phase 1 tunnel package. It also provided contract finance facilities worth QR688m for two road projects: the Ashghal West Corridor package; and Al-Kheesa Road.

“Sports premises, infrastructure, rail and investment in petrochemicals and oil and gas; you name it, we are there,” says Al-Raisi.

Success story

When CBQ was set up in 1974, Qatar’s financial sector was still nascent, with the country mainly reliant on foreign banks. Indeed, CBQ was the first privately owned lender to be established in Qatar and there were concerns it would struggle to gain market share against the might of state-backed Qatar National Bank (QNB).

But with the initial help of the US’ Chase Manhattan Bank, CBQ began to build up its business. About 40 years later, the Qatari lender is a major financial institution that has helped pave the way for the growth of the local banking market. Today, international banks play a far more marginal role compared with the growing influence of the highly liquid local banks.  

Al-Raisi says Qatar’s infrastructure projects will mainly be funded by groups of local lenders. “We are financing them with other banks as well in order to distribute market share,” he says. “Those are big projects and one bank alone cannot handle them.”

Commenting on the contribution of international banks, Al-Raisi says: “It will not be as much as the local market contribution [rather] 20-30 per cent. This is my assumption.”

Strategic ties

Having been established with the help of a foreign bank, CBQ is now providing assistance itself to other regional banks. Back in 2005 and 2007, it signed strategic alliances with National Bank of Oman and the UAE’s United Arab Bank. Both lenders reported a more than 20 per cent improvement in profitability in the first nine months of 2014.

CBQ is looking to further expand internationally to help boost and diversify its revenues. Last July, it acquired a 74.2 per cent stake in Turkish bank Alternatifbank, which has delivered a 95 per cent increase in net profit so far this year to reach TL99m ($44.5m).

CBQ is eyeing other acquisition opportunities in the coming years. “Yes, we will look at expansion internationally,” says Al-Raisi. “If a good opportunity appears in the market, we will definitely look at it and study it; we have an appetite to expand.”

Asia and North Africa are both potential markets for the bank, he said, pending political stability in North Africa.

“The Far East is one of the options; we might end up having representative offices or branches there,” says Al-Raisi.

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