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Interview with Fahad al Khalifa, CEO, al khaliji

Despite 2016 being a challenging year for the Qatari economy and the GCC more broadly, there are reasons for optimism in 2017. The price of oil is stabilizing and looks set to increase modestly next year; new infrastructure development spurred on in part by FIFA World Cup 2022 will boost the construction and tourism sectors, as well as demand for residential and commercial real estate; and, prudential management of the country’s banks means many are entering the next year on a strong footing. Bonds & Loans speaks with Fahad Al Khalifa, CEO of al khaliji, one of the country’s leading financial institutions, about the outlook for the Qatari economy and the key factors shaping the bank’s strategy in 2017.

Jan 30, 2017 // 11:15AM

Can you give us a sense of your outlook on Qatar’s economy and the performance of the banking sector?

Given the current market conditions, the Qatari economy is positioned to withstand this critical phase, thanks to the strategic course of action toward economic diversification mapped out by the Qatar National Vision 2030. Fluctuating oil prices confirm the wisdom and timely decision to adopt such a comprehensive vision for development by the government and     highlights     the     importance of diversification in sustainable development and economic prosperity.

This has had a tangible impact on the focus and direction of key sectors within the country - among which the banking sector is both a driver and a key beneficiary.  Additionally, the rise of new growth sectors and a flock of foreign direct investments and hefty infrastructural investments have promoted Qatar’s transition from developing to developed market status. This makes the Qatari banking sector stable and resilient, with most of the financial institutions in the country demonstrating healthy outlooks.

Furthermore, the government is undertaking substantial investments in infrastructure, ahead of hosting the FIFA World Cup 2022 and other mega sporting events. This has contributed strong growth figures in the Banking and Finance Sector that exceed those of most countries in the region.

However, to take full advantage of the possibilities and continue its growth and resilience, it needs to adopt a number of policies and approaches such as looking into international expansion. Banks and Financial institutions in Qatar are aware of the new realties in the current landscape and have been increasingly tapping into large-scale infrastructural projects regionally and internationally, hedging against heavy dependence on the local market and economy.

Qatar has room to cater to a wide range of audiences and business sectors, which can contribute to diversifying the Qatari economy in the years ahead, in line with the Qatar National Vision 2030 and its focus on transforming the country from a hydrocarbon- dependent into a knowledge-based economy.

Where is al khaliji looking to expand its reach? Are there any new products, services or regions being targeted by the bank?

Our operations in Qatar, the UAE and France stem from our vision to bolster our identity not only as a Qatari and regional bank, but as a cross-border financial institution that meets the needs of our premium customer base whenever and wherever they are. This has created a synergy that supports our mindset for growth and the ultimate aim of our development strategy, which is to create and deliver long term sustainable shareholder value.

This is achieved by concentrating on key priorities - unwavering focus on specific markets with deep penetration in select industries and delivering leading products and expertise in focus areas to our preferred customers, such as services and trade in Mid-cap trade and services segments among others.

Going forward, we also see great potential in converging our corporate, premium and private banking segments, building on a strong base of affluent and HNW individuals who are, equally, large business owners heavily involved in trade and cross-border activity.

Furthermore, we are zooming in on the SME segment through our financing and commercial banking services and looking at adopting a bolder stance on our product and service development for startups.

How is al khaliji looking to differentiate itself from competitors?

al khaliji strives to excel in delivering on its vision of becoming the most highly rated and respected bank in Qatar by meeting the needs and expectations of both current and future generations of customers, employees, investors and business partners.

By aligning the bank’s core values and strategies with the Qatar National Vision 2030, al khaliji has achieved consistent success through the growth of its business while maximizing shareholder returns and actively contributing to the country’s economic growth and the development of the Qatari society.

When it comes to our offerings, our role is to exceed our customers’ expectations with an unrivalled level of service, making us the bank of choice for our premium and corporate clients. This means continuing to grant differentiated corporate and individual products and services tailored to client needs, coupled with exclusive privileges.

While our solid operations and strong capital base have been reflected in a Credit Rating of A+ from Fitch and A3 with a Stable outlook from Moody’s, our innovative products and services, customer-centric approach, focused strategy and continuous growth have translated into a slew of awards year after year.

The growth of our bank is also linked directly to the future of our society. We have committed ourselves to its well-being, throwing our weight behind environmental and social causes. We want to be perceived not only as a bank, but as a primary engine of improvement for our society. All these pillars contribute to differentiating our bank and helping us achieve consistent success since our launch in 2008.

Having won the highly regarded ‘Best Premium Banking in the Middle East’ Award, al khaliji will continue to invest significantly in technology that allows us to better align our objectives and operating models to be even more client-centric, towards achieving a truly personal, individualized experience for each and every one of our Premium Clients.

What is the bank’s lending strategy?

al khaliji is a young and dynamic Qatari bank, 47% owned by the State of Qatar. These attributes, coupled with the underlying strength and growth of the economy in Qatar means that our lending strategy is focused on Qatar. We take a partnership approach with all of our Qatari clients, working with them to assist them in achieving their business goals, as well as supporting the State of Qatar’s 2030 National Vision.

al khaliji’s Corporate Banking franchise has dedicated, industry focused Relationship Managers to support our clients in the Government and State Owned Companies sectors. We also work with the leading private sector names in Qatar. The teams work closely with our clients to fully understand their business strategy and needs before providing recommendations on a suitable financing solution. The recommendations and financing solutions cover trade and supply chain finance, working capital and term finance as well as on the means to access the international loan and bond markets. Although we provide finance to our clients, we take a much more holistic view of our relationship and work with them and provide recommendations that allows them to effectively manage their cash and excess liquidity.

We also continue to play a key role in financing directly and indirectly the Government’s key infrastructure projects in Qatar which is an integral element in our strategy and will remain so. We were also delighted that al khaliji was selected as a Joint Lead Manager on the State of Qatar’s recent highly successful $9bn bond issue.

A key element of the Government’s 2030 National Vision is to support and develop the private sector within Qatar. The bedrock of the private sector and a driver of economic growth is a strong and vibrant SME (Small and Mid-Sized Enterprises) sector. Recognizing the positive impact the SME sector can have upon an economy, the state of Qatar has been actively and successfully promoting the development of this sector for a number of years led by the Qatar Development Bank.

al khaliji’s Commercial Banking team working in partnership with Qatar Development Bank under the “Al Dhameen” funding program, has provided finance to many SME’s to support businesses growth.  Many of these SME’s will grow to become successful corporates in the future, underpinning our identity as the “next generation bank”. As a government owned bank we are also supporting the broader economic strategy to open up access to finance to these SME names.

Our award winning Private Banking franchise is one of the most respected within Qatar. Our dedicated Private Bankers work with High Net Worth (HNW) and Ultra High Net Worth (UNHW) Qatari clients to help them protect, manage and grow their wealth. We take the time to understand our client’s needs and risk appetite and stand ready to support them with financial solutions when required, including providing loans.

We are one of the strongest local banks in Qatar and recognize that as Qatar has grown, our clients’ requirements and investment needs have also grown. Our subsidiary, Al Khaliji France, with offices in Paris and the UAE, is an important part of the Group and our strategy. It provides a physical presence in Europe and the GCC that allows us to serve all our Qatari clients, whether a corporate or private banking client, when they have opportunities outside of our domestic market. The ability to fully understand and provide excellent and seamless service to our clients irrespective of the al khaliji location allows us to differentiate ourselves from our competitors.

To summarize, as a leading local bank in Qatar with strong government ownership, we remain fully focused on our clients and business in Qatar. Despite the reduction in hydro carbon prices since 2014, we believe that our home market of  Qatar offers good long term opportunities to sustain and grow. We take a long term partnership approach with our clients as the success of our clients will ultimately lead to success for al khaliji and for Qatar.

Mr. Fahad Abdulla Al Khalifa has been Group Chief Executive Officer of Al Khalij Commercial Bank (al khaliji) Q.S.C. since September 1, 2014. Mr. Al Khalifa served as General Manager of Group Corporate & Institution Banking at Qatar National Bank SAQ. He served as General Manager of Treasury at Qatar National Bank SAQ since July 2008. He joined Qatar National Bank in 2000. During his time with Qatar National Bank, Mr. Al Khalifa served various positions starting as a Senior Fixed Income Dealer and then promoted to the Head of Dealing Room and Assistant General Manager of Treasury at the QCB.

Middle East Islamic Finance

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