Joseph Abraham, Group CEO at Commercial Bank of Qatar delves into the current developments at CBQ and the banking industry. Abraham talks about the rising volatility in international business, the bank’s move towards diversification, consolidation and innovation:
Kanisha Gupta: Given the rising volatility of international business and emerging risks, what is the new balance that the bank is seeking across its domestic and international business?
Joseph Abraham: Domestic business in Qatar remains our main focus and we obtain the majority of our revenues from it. We are monitoring international opportunities; however, our home market remains as our main focus.
Overall, is the bank veering towards diversification or consolidation of business for the next few years?
We are expanding our business across different client segments with new product features. Internationally, we will be focused on continually improving our business performance.
Briefly describe the innovations and business impact of partnering with start-ups that the bank has engaged with?
Engaging with start-ups requires a lot of understanding and the ability to imbibe new technologies and processes, in addition to a guide to manage the contours of innovation. Risks associated require to be amply discussed and clear mitigants are embedded as part of the solution. Given the importance of digital in today’s world, its key that this is at the forefront for both banks and start up. Banks provide strong governance and process controls which when combined with innovation and agility, often seen in fintech, can lead to better solutions for clients.
How is the bank handling the talent crunch? What new HR risks is the bank now prepared against?
At Commercial Bank we attract fresh and also experienced talent from across the globe and we are aligned to the national strategies to attract and select national talent who are committed to shape the future of the banking sector in Qatar. We are committed to investing in training and development to continuously improve our talents’ capabilities and also work on other measures of staff engagement including various staff sports and recreational facilities and clubs to build team spirit.
Regulatory and compliance requirements might be impacting multiple applications across the bank. How is the bank working with application vendors to incorporate the new requirements?
Qatar Central Bank has issued new instructions to banks and introduced enhancements to their existing regulations. As an example, the regulator requires the banks in Qatar to ensure their combating financial crimes controls are periodically reviewed and updated to efficiently manage the relevant financial crimes risks including the new trends. Accordingly, at Commercial Bank we have introduced a new set of risk-based approach AML/CFT monitoring scenarios covering the key money laundering typologies in coordination with the application vendor.
What were the factors behind S&P upgrade of the bank’s rating from BBB+ to A-?
The main reasons for the ratings upgrade of Commercial Bank by S&P is the improved asset quality and continued strong capitalization and the very consistent uptrend in performance. Commercial Bank has been successful in de-risking its balance sheet and has strengthened its risk management process over the last few years. As a result, stage 2 loans decreased to 16% of the loans at the end of September 2022 from 27% at the end of the year 2018. Commercial Bank has also increased exposure to the government and public sector and decreased its exposure to the real estate sector. Additionally, the bank continues to maintain strong capitalization. CET 1 has increased to 11.3% at end of September 2022 from 9.7% by the end of year 2016.
What were the main outcomes from Commercial Bank’s participation in IIF and IMF meetings in Washington DC recently?
Commercial Bank joined global banks at the 2022 Annual Meetings of the International Monetary Fund (IMF), World Bank Group and the Institute of International Finance, which had been held in parallel in Washington DC during October 10-16, 2022.
Our presence at the important annual IMF meeting demonstrates the importance of Qatar’s banking sector in international banking. As a bank that has long recognized the importance of responsible and sustainable ways of conducting business, Commercial Bank remains committed to continue its progress to achieve its strategic goals through innovation and technology.
During the 6 days of annual meetings, discussions has been conducted on key issues including inflation and the effect of raising interest rates on the ability of developing nations repaying debts. With this participation, Commercial Bank enhances its leading position as a pioneer in innovation in banking on the local and global level.