CBQ on the path towards a sustainable, green and digital future
Commercial Bank of Qatar (CBQ) has played a leading role in Qatar's economic and social development since it was established as the country's first private sector bank in 1974. In an interview, Sheikh Abdulla Bin Ali Bin Jabor Al Thani, chairman of CBQ, discusses the bank's achievements to date, how CBQ is driving its digital strategy and the resilience of Qatar's economy amid rising political, economic and social challenges.
Q: CBQ recently reported first quarter results. What were some of the key highlights and how do they relate to the performance objectives the bank has for 2022?
CBQ reported a good start to the year, with our financial performance for the first quarter of 2022 demonstrating the strong execution of our strategy. We reported a net profit of QAR 702 million (US$192.8 million) for the period, up 16.5% compared to the same period last year. The increase in net profit was mainly due to an increase in net interest income, driven by continued effective management of our cost of funding and an improvement in interest income.
CBQ has a strategic focus on best-in-class transaction banking and our low cost deposits increased by 10.9% year-on-year due to the strength of our cash management initiatives and digital products offered.
Q: In March, the bank’s shareholders approved increasing the non-Qatari ownership threshold in the bank’s capital to up to 100%. What is the significance of this development and what impact might it have?
Qatar has launched several initiatives aimed at attracting foreign capital across various economic and commercial sectors.
One of these initiatives is increasing the foreign ownership limits (FOL) in listed companies. Furthermore, shareholder approval to increase CBQ’s FOL to 100% is a step that will help to improve the attractiveness of the Qatar stock market and CBQ's shares as the 100% FOL is often a requirement for many investment funds to enter a market and invest.
Q: In the results announcement, the bank stated that it has “continued to invest in upscaling its digital service offering”. What examples can you give to demonstrate this continued investment in digital?
With Qatar hosting the 2022 FIFA World Cup, increased tourism activity is not only going to strengthen Qatar’s economy in the short term, but in the long-term it will boost Qatar’s international profile as a tourist destination.
Digital is a core part of our strategy and we continue to invest in our digital technology capabilities to provide the right products to the changing needs of the customer and enhance our customer communication to empower customers to self-serve without having to contact the bank.
Some of the recent retail banking digital innovations we have introduced include CB safe ID, CB video relationship manager and self-service card printing machines.
CB safe ID offers customers a digitally secure service to help them identify and authenticate genuine calls. Using the CB mobile app, customers are now able to identify legitimate calls from the bank and reduce the chances of a fraudster tricking them.
The launch of our CB video relationship manager service provides customers with a personalised and secure service without being physically present in a branch. The interactive video service enables staff to guide customers through complex transactions and documents to be shared and digitally signed. Another service from CBQ is our self-service card printing machines, which offer a 24x7 instant card printing experience for CBQ cardholders at multiple locations.
Q: Does the bank have a defined ESG strategy, and if so, what are its core pillars and can you give any practical examples of this strategy in action?
We view sustainability as an integral part of our corporate strategy and we have identified sustainability topics most material to our business and our stakeholders. These are sustainable financial and economic performance; risk management; support for SMEs; financial inclusion and accessibility; responsible procurement and supply chain management; exceptional client experience; customer privacy and data security; digital innovation; environmental impact of our operations; talent attraction, development and retention; diversity and inclusion; community investment; and governance and compliance.
If we consider the social aspect of ESG, the bank is one of the largest providers of loans to SMEs and sectors particularly affected by Covid-19 under Qatar’s National Response Guarantee programme. A significant share of the government’s allocation of QAR 5 billion (US$1.3 billion) has been spent on the programme.
In terms of our action on environmental issues, we recognise that reducing paper usage by transitioning to a paperless office is more environmentally and operationally sustainable, so we have set targets to reduce paper usage across the bank through digitisation initiatives in conjunction with a recycling programme.
Q: The Qatari economy looks to be demonstrating some strength and resilience, with a further boost expected later this year with the World Cup, how do you think this will affect the Qatari economy and CBQ?
Qatar’s GDP is forecast to rise from US$161 billion in 2021 to US$201 billion in 2025, and confidence in Qatar’s economy is also witnessing significant growth following the government’s legislative and regulatory efforts to attract businesses – factors which augur well for CBQ.
An important legacy of the World Cup is raising global awareness of Qatar as an investment and tourist destination. This is part of Qatar’s wider vision of leading in many areas such as sports, education, innovation, and tourism. The country recently hosted a successful F1 tournament held in Doha, which is an indicator of Qatar’s strong commitment to hosting world class sporting events. It is also a key element of sustainable development.
Q: Despite the strength and resilience, what are some of the regional and macro-risks the bank is keeping a close eye on this year?
Change is constant and the recent Covid-19 pandemic, Ukraine conflict, global supply chain disruption and pressure of global inflation teaches us to expect the unexpected.
We are now in a higher interest rate environment and this should benefit banks as long as the cost of funding is carefully managed.
To read other articles by Commercial Bank of Qatar in this series, see below: