Doha Bank Is ‘Well-Placed’ To Benefit From Qatar’s Contract Financing Growth

Doha Bank has been well-placed to benefit from Qatar’s “steadily growing” contract financing sector that saw its loan book touching QR19bn in June, said Group CEO, Dr R Seetharaman.

Currently, Qatar’s premier bank has about 30% market share in contract financing.

“We have strong expertise in the sector,” Seetharaman said in an interview with Gulf Times in Doha.

He said Doha Bank ‘s “high market share” in contract financing was driven by its “strong relationship” with key contractors through its representative offices, mainly in Turkey, South Korea, Japan and Germany.

Seetharaman said contract financing was set to maintain “good growth” in Qatar in view of the government’s focus on infrastructure upgrade. Over the next 10 years the government plans to build some 12 stadia with an outlay of $4bn. The government has also allocated $20bn towards the development of the tourism sector.

Between 2005 and 2012, contract financing grew at a compound annual growth rate (CAGR) of 27%, Seetharaman said.

Doha Bank , the Group CEO said, has a “fair share” in the loan book of the country’s banking, government, real estate, retail, service, and trade sector.

At the close of the first half, the bank had a 6.8% market share of the banking sector’s loan book, which stood at QR544bn. The government sector loan book touched QR231bn in H1 and Doha Bank had a 1% market share.

In the real estate segment, the bank’s share of the QR80bn loan book was 8.9% in June. And in the retail sector, Doha Bank accounted for 14.4% (of QR75bn) in June, Seetharaman said.

The country’s trade sector loan book totalled QR38bn in June, of which Doha Bank had 18.6% share. In the service sector, (worth QR78bn in H1), the bank’s share was 2.9%.

On Doha Bank ‘s performance in the corporate segment, Seetharaman said, “This is a significant contributor to our total income. The corporate segment has evolved to be one of the core competencies of the bank and will be a major growth area in future. In the segment, Doha Bank targets local and international companies and ultra high net-worth clients.”

He said Doha Bank has a much diversified portfolio that focuses on private sector and will opportunistically consider lending to the public sector.

The bank’s corporate loans are directed towards real estate, contract financing, services, trade and industry. The CAGR between 2010 and 2012 in real estate is 23.5%, followed by contract financing (21%), services (9.6%), trade (3.6%) and industry (2.8%).

Seetharaman said Doha Bank placed a great deal of emphasis on the country’s small and medium enterprises (SME).

“Our strategy is to continually grow in the SME business. Our full-fledged online banking platform for customers as well as corporate credit card propositions adds value to the SME businesses.

“We have coverage of various business segments including trading companies, contractors, manufacturing, service oriented sectors like schools, restaurants, boutiques, clinics in addition to assisting start-up companies primarily through our tie-up with the Qatar Development Bank.”

He said Doha Bank was actively encouraging greater use of online banking. By 2016, the bank’s target was that a majority of non-value-adding banking activities by retail and SME customers should be performed online with minimal manual interventions.

Saudi, India current focus of global expansion plan

Doha Bank intends to continue its targeted international expansion strategy, said Group CEO Dr R Seetharaman.

“Among the new markets targeted are Saudi Arabia and India,” he told Gulf Times.

“We want to be in these markets. Saudi market is attractive and large-scaled. By getting into India, a fast developing country, we can better target a strong expatriate community in Qatar,” he said.

Seetharaman also said Doha Bank would further develop regional branch network in the UAE and Kuwait and “position it at the centre of the infrastructure growth of the GCC economies”.

“We will expand and further leverage the trade finance business through the network of representative offices, by further developing relations with companies doing business with Qatar,” he said.

Source : Gulf Times