FITCH Ratings, the global rating agency, has affirmed Doha Bank’s long-term issuer default rating (IDR) at ‘A’ with a stable outlook. The viability rating has simultaneously been affirmed at ‘bbb’, according to a Fitch Ratings release in Doha on Monday. According to the rating agency, Doha Bank’s longterm issuer default rating and support rating reflect the extremely high probability of support from the Qatari authorities, if required. Fitch’s assessment of support is based on Doha Bank’s established domestic franchise and systemic importance as Qatar’s fourth largest bank by assets and the Qatari authorities’ track record of providing extensive support to the banking system. The viability rating reflects Doha Bank’s healthy asset quality and robust earnings as well as its established franchise. The viability rating, according to the release, also reflects the bank’s limited medium to long-term funding and lower capital ratios than peers. Doha Bank has shown robust earnings, despite a slowdown in the domestic credit environment, mainly due to lower interest rates which have reduced funding costs. Asset quality ratios are healthy by global standards, but weaker than some domestic peers. Ratios continued to deteriorate at end-2010 and first quarter of 2011. Fitch considers that the impaired loan ratio has benefited from some restructuring during 2010 mainly related to real estate lending. Reserves for impaired loans are adequate and improved at end- 2010. A revival of the Qatari economy and domestic credit market could lead to improvements in asset quality and credit growth. Given its large retail franchise, Doha Bank is well funded by customer deposits. However, the lack of medium- term funding remains an issue as it has yet to make any progress on accessing capital markets to extend its funding profile and is awaiting more favourable market conditions. Capital levels remain below peers but benefited from a further system-wide injection from the Qatar Investment Authority (QIA) in first quarter of 2011, bringing the bank’s Tier 1 ratio to 11.9 percent and the QIA’s shareholding to 16.67 percent, says the rating agency’s release. Doha Bank has a wellestablished franchise in Qatar. Doha Bank was the fourth-largest bank by assets, accounting for 8.3 percent of total banking assets at end-2010. The bank’s shares are listed on the Qatar Exchange. Qatar News Agency

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