Alrayan Bank · QSE:MARK
Alrayan Bank — Masraf Al Rayan — Debt Investor Presentation (October 2017)
32 slides from Alrayan Bank's debt investor presentation, October 2017
Slide 1: Investor Presentation
Investor Presentation October 2017 Confidential
Slide 2: Disclaimer
Disclaimer IMPORTANT: You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by Masraf Al Rayan (Q.S.C.) (“Masraf Al Rayan”) or any person on behalf of Masraf Al Rayan, and any question-and-answer session that
Slide 3: Contents
Contents 1. Introduction to Masraf Al Rayan 2. Operating Environment 3. Business Overview 4. Risk Management 5. Financial Highlights and Performance 6. Transaction Term Sheet 7. Appendix Confidential 3
Slide 4: Introduction to Masraf Al Rayan: Corporate Profile
1. Introduction to Masraf Al Rayan Corporate Profile Overview of Masraf Al Rayan Q.S.C (MAR or the Bank) Branch Network Fully Shariah compliant bank incorporated in Qatar on 4 January Profile 2006 and licensed by the Qatar Central Bank 6 Classified as a DSIB (domestic systemically important bank
Slide 5: Ownership Structure & Financial Highlights
1. Introduction to Masraf Al Rayan cont’d Ownership Structure & Financial Highlights Shareholding Structure Financial Highlights Government and government related entities hold approx. 49% of MAR’s shares Considering both direct and indirect interest significant shareholders comprise of USD mn(1
Slide 6: Key Credit Highlights
1. Introduction to Masraf Al Rayan cont’d Key Credit Highlights Strong fundamentals underpinned by consistently high asset quality, earnings growth and strong capitalization One of the lowest Non Performing Financing (NPF) ratio (0.15%) in the banking industry globally Robust capitalization (CAR
Slide 7: Contents
Contents 1. Introduction to Masraf Al Rayan 2. Operating Environment 3. Business Overview 4. Risk Management 5. Financial Highlights and Performance 6. Transaction Term Sheet 7. Appendix Confidential 7
Slide 8: Qatar at a Glance
2. Operating Environment Qatar at a Glance Snapshot of Qatar Fiscal Balance Fiscal Surplus (USD bn) Fiscal surplus (% of nominal GDP) Largest exporter of LNG with a global market share of 30%(1) 30 15.0% Economic 25 Fundamentals 3rd largest gas reserves in the world (c.13% of world’s total) (2)
Slide 9: Qatar vs Other GCC Countries
2. Operating Environment cont’d Qatar vs Other GCC Countries Real Gross Domestic Product (GDP) Growth of GCC Fiscal Breakeven Oil Price, FY17F (USD / barrel) 2015 2016 2017F 2018F 120 101.1 4.2% 4.1% 3.8% 100 3.7% 3.6% 3.4% 83.8 3.1% 3.0% 3.0% 3.0% 79.2 2.9% 2.5% 80 2.5% 2.5% 2.2% 67 Avg* 4.1% 2.1%
Slide 10: Overview of the Qatari Banking Sector & Regulatory Support
2. Operating Environment cont’d Overview of the Qatari Banking Sector & Regulatory Support Snapshot of the Qatari Banking Sector State of Qatar’s Track Record of Support A total of 18 banks licensed by the Qatar Central Bank: Historically, the Government, through the QCB and QIA, has taken sever
Slide 11: MAR's Positioning in the Qatari Banking Sector (1/2)
2. Operating Environment cont’d MAR’s Positioning in the Qatari Banking Sector (1/2) MAR is well-positioned as a leading Qatari financial institution by consistently delivering robust returns and maintaining strong efficiency Net Profit* (USD mn) – 9M 17 Operating Efficiency (Cost to Income) – 9M
Slide 12: MAR's Positioning in the Qatari Banking Sector (2/2)
2. Operating Environment cont’d MAR’s Positioning in the Qatari Banking Sector (2/2) MAR has strong foothold in Qatari market in terms of assets and has the lowest non performing financing ratio Total Assets (USD mn) – 9M 17 Deposit Growth – 9M 17 Financing Assets Other Assets Total Assets QNB 158
Slide 13: Contents
Contents 1. Introduction to Masraf Al Rayan 2. Operating Environment 3. Business Overview 4. Risk Management 5. Financial Highlights and Performance 6. Transaction Term Sheet 7. Appendix Confidential 13
Slide 14: Business Overview: Strategy
3. Business Overview Strategy The Bank strives to become the leading Islamic bank within Qatar and one of the leading Islamic banks globally by offering a broad spectrum of Sharia-compliant products and services, delivered through an expanding network of branches and other alternative channels, to
Slide 15: Business Segments
3. Business Overview cont’d Business Segments For the purpose of financial reporting, the Bank provides breakdown by four segments which offer different products and services, and are managed separately based on the Bank's management and internal reporting structure Corporate Banking Retail Bankin
Slide 16: Contents
Contents 1. Introduction to Masraf Al Rayan 2. Operating Environment 3. Business Overview 4. Corporate Governance & Risk Management 5. Financial Highlights and Performance 6. Transaction Term Sheet 7. Appendix Confidential 16
Slide 17: Organizational Structure
4. Corporate Governance & Risk Management Organizational Structure Shari’a Board Shareholders Audit & Compliance Board of Directors Committee Board Secretary Executive Committee Remuneration Committee Risk & Policy Committee Nominations & Group Investment Chief Internal Auditor Governance Committee
Slide 18: Board Composition
4. Corporate Governance & Risk Management cont’d Board Composition The principal role of the Board is to oversee the implementation of the Bank's strategic initiatives and its functions within the agreed framework in accordance with relevant statutory and regulatory structures Chairman & Managing
Slide 19: Risk Management Structure
4. Corporate Governance & Risk Management cont’d Risk Management Structure While the Board is ultimately responsible for the risk management framework, everyone in the Bank is responsible for risk management and there are 3 lines of defense; 1) Line Management, 2) Risk & Compliance 3) Internal Aud
Slide 20: Risk Management Cycle
4. Corporate Governance & Risk Management cont’d Risk Management Cycle The Bank maintains a rigorous and robust approach for monitoring, mitigating and managing its exposure to potential risks including financial risk, credit risk, market risk, strategy risk, operational risk and Sharia risk 1 Ris
Slide 21: Contents
Contents 1. Introduction to Masraf Al Rayan 2. Operating Environment 3. Business Overview 4. Risk Management 5. Financial Highlights and Performance 6. Transaction Term Sheet 7. Appendix Confidential 21
Slide 22: Balance Sheet
5. Financial Highlights & Performance Balance Sheet Continued asset growth in 9M 17. Financing assets, mainly in the public sector are the predominant contributor. Investment securities continue to have high tilt towards high quality Government debt. Asset Growth – 9M 17 Asset Mix – 9M 17 1.2% 3.2
Slide 23: Asset Quality
5. Financial Highlights & Performance cont’d Asset Quality Masraf Al Rayan’s non-performing financing ratio remains below 1% (one of the lowest globally) reflecting robust asset quality, the Bank’s prudent risk management policies and a conservative lending strategy Non-Performing Financing Assets
Slide 24: Capitalization
5. Financial Highlights & Performance cont’d Capitalization Masraf Al Rayan is well capitalized with CAR exceeding the regulatory threshold indicating ample room for growth Total Equity Breakdown – 9M 17 Overview of the Bank’s Capitalisation Levels – 9M 17 3,537 3,561 3,395 3,220 46 53 86 18.85% 1
Slide 25: Funding & Liquidity
5. Financial Highlights & Performance cont’d Funding & Liquidity Masraf Al Rayan primarily relies on customer deposits and is seeking to diversify its funding mix as part of its strategic objective Funding Mix – 9M 17 Deposit Mix – 9M 17 23,531 17,190 15,941 16,498 21,609 2.1% 15,281 18,784 19,498
Slide 26: Profitability
5. Financial Highlights & Performance cont’d Profitability Stable profitability with consistently strong efficiency and high return on assets and shareholders’ equity Profitability – 9M 17 Income Composition – 9M 17 1,032 917 4.1% 3.6% 872 845 8.3% 7.4% 0.9% 6.6% 3.2% 768 3.0% 7.1% 6.3% 2.8% 5.3%
Slide 27: Contents
Contents 1. Introduction to Masraf Al Rayan 2. Operating Environment 3. Business Overview 4. Risk Management 5. Financial Highlights and Performance 6. Transaction Term Sheet 7. Appendix Confidential 27
Slide 28: Transaction Term Sheet
6. Transaction Term Sheet Transaction Term Sheet Issuer MAR Sukuk Limited Obligor Masraf Al Rayan (Q.S.C.) Obligor’s Rating A1 by Moody’s Programme Size USD 1,000mn Trust Certificate Issuance Programme Status Unsubordinated unsecured obligations of Obligor Expected Issue Rating A1 by Moo
Slide 29: Sukuk Structure
6. Transaction Term Sheet cont’d Sukuk Structure MAR as seller of the Wakala MAR as servicing agent MAR as purchaser Assets Part of Exercise Price/ Income and Service Agency Master Purchase Proceeds Purchase Principal Agreement Agreement and Cancellation of Undertaking / Sale Revenues Supplemental C
Slide 30: Contents
Contents 1. Introduction to Masraf Al Rayan 2. Operating Environment 3. Business Overview 4. Risk Management 5. Financial Highlights and Performance 6. Transaction Term Sheet 7. Appendix Confidential 30
Slide 31: Consolidated Statement of Financial Position
7. Appendix Consolidated Statement of Financial Position USD mn FY 14 FY 15 FY 16 9M 17 Cash and Balances with Qatar Central Bank 910 752 859 871 Due from Banks 990 653 1,564 595 Financing Assets 15,909 17,189 18,581 18,814 Investment Securities 3,925 4,018 3,849 6,485 Investment in Associates 116 1
Slide 32: Consolidated Income Statement
7. Appendix cont’d Consolidated Income Statement USD mn FY 14 FY 15 FY 16 9M 16 9M 17 Net income from financing activities 577.2 641.1 720.0 530.3 629.7 Net income from investing activities 129.4 112.3 146.7 109.2 153.5 Total Net Income from Financing and Investing Activities 706.6 753.3 866.6 639.5
Masraf Al Rayan — Debt Investor Presentation (October 2017) on 6ix