Qatar International Islamic Bank – Ratings Affirmed with a Stable Outlook

(MENAFN- Capital Intelligence Ltd) 17 March 2026

Capital Intelligence Ratings (CI Ratings or CI) has affirmed the Long-Term Foreign Currency Rating (LT FCR) and Short-Term Foreign Currency Rating (ST FCR) of Qatar International Islamic Bank (QIIB or the Bank) at ‘A+’ and ‘A1’, respectively. At the same time, CI Ratings has affirmed QIIB’s Bank Standalone Rating (BSR) of ‘bbb+’, Core Financial Strength (CFS) rating of ‘bbb+’ and Extraordinary Support Level (ESL) of High. The Outlook for the LT FCR and BSR remains Stable.

The Bank’s LT FCR is set three notches above the BSR to reflect the high likelihood of official extraordinary support in case of need. This is based on the government’s strong track record of support for Qatari banks. At different points in time, such support has included the transfer of ‘difficult investments’ and real estate (RE) loans to the state, systemic liquidity support, and the injection of additional equity. Moreover, the government has ownership stakes in all Qatari banks. The government’s financial capacity to support the Bank is also considered to be strong given Qatar’s sovereign ratings (‘AA’/‘A1+’/Stable).

QIIB’s BSR is based on a CFS rating of ‘bbb+’ and an Operating Environment Risk Anchor (OPERA) of ‘bbb’. The OPERA reflects Qatar’s very strong external balances, including very high current account surpluses, as well as increasing foreign exchange reserves and significantly declining external debt. Gross government financing needs are very low, and are expected to average just 0.6% of GDP in 2026-27. The government enjoys high expenditure flexibility, low domestic stability risks and very high international liquidity. The OPERA also takes into account the substantial volume of state assets under Qatar Investment Authority management and Qatar’s very large hydrocarbon reserves. Although the dependence on hydrocarbon revenues remains high, these are mainly gas-related rather than from oil, with supply and demand factors for gas probably granting lower revenue volatility than is the case with oil. There have been substantial – and, in many cases, successful – ongoing efforts to diversify the economy away from the still high dependence on hydrocarbons. In particular, there has been a rapid growth in the tourism sector. While the operating environments in all regional markets have been impacted to some degree, the severity and nature of these impacts will vary depending on geographical location, the pre-conflict economic conditions within each market and the ability of governments to provide assistance if needed. For banking sectors, the area where assistance might first be needed is funding and liquidity – as this area is the one where sudden impacts to confidence are most likely.

The CFS is driven by the Bank’s supportive shareholder base, good liquidity that is underpinned by a strong customer deposit base, strong capitalisation, sound asset quality, and strong and rising profitability. These strengths are counterbalanced to some degree by QIIB’s smaller size and limited market share.

QIIB’s asset quality remains good – as is risk mitigation. Having exited a gently rising trend last year, the non-performing financing (NPF) ratio remains better than those of all but two of its peers. However, RE exposure as a percentage of the financing portfolio is seen as being elevated. NPF reserve coverage is more than full, with a marked increase in 2025. The extended NPF coverage ratio remains strong – as does overall credit loss absorption capacity. Financing policies and asset allocation in the securities portfolio are conservative and prudent, with an emphasis on maintaining sound liquidity.

Profitability is strong at both the operating and net levels – ROAA, in particular, has been on a rising trend, and remains the second-best in the peer group. CI expects QIIB to be able to continue to post better-than-average results given its still moderately modest cost of credit and very low cost-to-income ratio. QIIB has a satisfactory liquidity profile, with generally good liquidity metrics. The asset base is largely funded by retail customer deposits. Non-domestic deposits remain minimal, something that is unlikely to change going forward. Liquidity risk is considered to be low.

Capital quality is good, while capital ratios are close to (CET1) or above (Tier 1 and CAR) the median ratios of what is a very well-capitalised banking sector. Capital adequacy, therefore, remains sound. As financing-loss reserve (FLR) coverage is more than full, there is no impairment of capital from unprovided financings. Capital flexibility is satisfactory, especially given the rise in the rate of internal capital generation last year. Asset growth – and especially risk-weighted asset growth – is expected to again be relatively modest this year.

Rating Outlook

The Outlook on the LT FCR and BSR is Stable. This indicates that CI does not consider a change likely in either rating in the next 12 months.

Rating Dynamics: Upside Scenario

As financial metrics are already either satisfactory or relatively strong, further improvement in these numbers is unlikely to put upward pressure on the LT FCR or BSR, as improved metrics alone would not be enough to offset the challenges related to size and market position.

Rating Dynamics: Downside Scenario

A downgrade of the Bank’s FCRs or a revision of the Outlook to Negative would require a deterioration of the BSR or a downgrade of the sovereign, or a change in CI’s view of the government’s willingness and financial capacity to provide support. Given QIIB’s current financial metrics, a lowering of its BSR appears unlikely in the short term, and would require a very marked deterioration in asset quality and/or liquidity and funding metrics.

Contact

Primary Analyst: Rory Keelan, Senior Credit Analyst; E-mail: ...
Secondary Analyst: Darren Stubing, Senior Credit Analyst; E-mail: ...
Committee Chairperson: Karti Inamdar, Senior Credit Analyst

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