#1COMMERCIAL BANKI 4.4 COMMERCIAL BANKSJEDICEN THE COMMERCIAL BANK (P.S.Q.C.) Investor Presentation September 2020 البنك التجاري COMMERCIAL BANK 69#2Disclaimer This presentation and subsequent discussion may contain certain forward-looking statements with respect to certain plans and current goals and expectations of Commercial Bank and its associated companies relating to their future financial condition and performance. These forward-looking statements do not relate only to historical or current facts but also represent Commercial Bank's expectations and beliefs concerning future events. By their nature forward-looking statements involve known and unknown risks and uncertainty because they relate to future events and circumstances including a number of factors which are beyond Commercial Bank's control. As a result, Commercial Bank's actual future results or performance may differ materially from the plans, goals and expectations expressed or implied in such statements. Any forward-looking statements made by or on behalf of Commercial Bank speak only as of the date they are made. Commercial Bank does not undertake to update forward-looking statements to reflect any changes in Commercial Bank's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. 2 55#3Presenting Team Mr. Joseph Abraham Group Chief Executive Officer Mr. Rehan Khan Chief Financial Officer Mr. Parvez Khan EGM, Treasury and Investments & Strategy 3 55#4Table of Contents QATAR IN PERSPECTIVE COMMERCIAL BANK: SUMMARY HIGHLIGHTS ➤ CONSOLIDATED FINANCIAL HIGHLIGHTS & PERFORMANCE STANDALONE FINANCIAL PERFORMANCE APPENDIX: USD CONVERSION 4 55#5Qatar in Perspective - A Resilient and Well Diversified Economy... Sovereign Rating: Aa3 / AA / AA- (Moody's / S&P / Fitch) Attractive Economic Growth High GDP per Capita (2019F GDP per Capita, US$ '000) I 10.2% I I I 4.8% 4.0% 4.4% 3.7% 3.8% 1.1% 1.2% 0.7% 1.1% 0.9% 69.7 Consistently among world's top 3 economies in terms of GDP per capita since 2011 37.7 29.3 25.3 22.9 17.8 -0.9% I Qatar UAE Saudi Kuwait Bahrain Oman Arabia Qatar UAE Kuwait Bahrain KSA Oman Average annual real GDP Growth ■ 2000-16 Deep Natural Resources 842 2017-2019 Qatar gas reserves are forecasted to last for at least another 130 years Well Diversified Economy, Positioned for Further Improvement 70% 68% 63% 63% 65% 48% 320 215 63 31 7 2014A 2015A Qatar UAE Kuwait Saudi Arabia Oman ■Gas Reserves, 2019E, Trillions of Cubic Feet Bahrain Source: International Monetary Fund, Qatar Country Report; Oxford Economics; EIA (US Energy Information Administration). 2016A 2017A 2018E ■Nominal Nonhydrocarbon Share of Overall GDP (%) 2019F 5 65#6...With a Stable Business Environment, Supportive of Foreign Investments Fiscal Breakeven Oil Price (US$) - 2019 45 55 106 93 83 67 53 Iran Iraq Qatar Kuwait UAE Saudi Oman Bahrain Arabia Kuwait General Government Fiscal Balance (% of GDP)-2019 I 4.8% 4.1% I i (0.8%) I (4.5%) (7.0%) (10.6%) Kuwait Qatar UAE Saudi Oman Bahrain | Arabia Saudi Arabia Qatar UAE Qatar Oman Yemen Current Account Balance (% of GDP) - 2019 8.9% 7.4% 6.3% 2.4% (2.9%) (5.2%) Kuwait UAE Saudi Qatar Bahrain Oman Arabia ! Highly Competitive Business-friendly Framework (2019 Global Competitiveness Report) #45 #46 #53 #36 #25 #29 UAE Qatar Saudi Bahrain Kuwait Oman Arabia Source: International Monetary Fund, Regional Economic Outlook: Middle East and Central Asia Update; World Economic Forum, The Global Competitiveness Report. 6 3 55#7Qatar Has a Robustly Regulated Banking Sector Benefitting from Strong Government Support Loan Book & Customer Deposit Growth ($bn) CAGR 9.4% (1) 230 CAGR 7.3% (1) 250 293 258 179165 206 226 223 285 233 243 200 179 2014 2015 2016 2017 2018 2019 H1 2020 ■Loans Deposits Strong Prudential Regulatory Framework Capital Liquidity Financing Ownership Provisioning Minimum Basel III CAR 14.00% (2) QCB reserve requirement 4.5% of total deposits Max. financing to deposits ratio 100% Financing to real estate limit: 150% of shareholder's equity and Tier 1 capital Permitted foreigner ownership up to 49% in listed banks Risk reserves to be maintained at 2.5% of net loans and advances in addition to ECL per IFRS 9 Source: Qatar Central Bank, Qatar Exchange, Companies websites and Bloomberg. 1. CAGR calculated from 31 December 2014 to 30 June 2020 2. 14.00% includes an ICAAP buffer of 1%. Qatari Banks Enjoy Strong Government Support % Owned by Qatar Investment Authority and Government related vehicles 9000 52% QNB 17% QIB LOJnoll 17% 25% البنك التجاري COMMERCIAL BANK 65 مصرف الريان MASRAF AL RAYAN GOG 17% Satan بنك الدوحة DOHA BANK 48% الخليجي al khaliji 17% QIIB 48% البنك الأهلى ählibank Commercial Bank Shareholding profile (30th June 2020) Foreign Nationals 19% Qatari Nationals 81% لدولي إسلامي 7 3#8Historical Government Support for the Banking Sector 1 Capital Injection Announcement In October 2008 the Qatar Investment Authority announced its plan to acquire equity ownership interest between 10% and 20% in all domestic banks listed on the Qatar Exchange 3 Acquisition of Equity Portfolios In March 2009 the Qatari Government purchased the domestic equity portfolios of seven of the nine domestic banks listed on the Qatar Exchange 5 Dividend Waiver Waiver of the dividend payable to the Qatari Government for the year end 2009 7 Injection of Post blockade liquidity Injection of liquidity and USD post blockade to stabilise banking system October 2008 November December January 2008 2008 2009 February 2009 March 2009 April 2009 May 2009 June 2009 January 2010 February 2010 March 2010 February June 2011 2017 First Capital Injection The Qatar Investment Authority completed the first stage of the subscription process in CB's share capital by investing QAR807m, representing 5% of CB's share capital and further strengthening the Capital base QIA subsequently transferred its shares to Qatar Holdings 4 Acquisition of Real Estate Portfolios 6 In June 2009 the Qatari Government announced that it would purchase the portfolios of real estate loans and other exposures of commercial banks listed on the Qatar Exchange, for their net book values Final Tranche of Direct Capital Injection A number of Qatari Banks received the final and third tranche of capital injection from the Qatar Investment Authority as part of the Government's initial plan to increase its stake in all domestic banks listed on the Qatar Exchange 8 55#9QATAR IN PERSPECTIVE COMMERCIAL BANK: SUMMARY HIGHLIGHTS ➤ CONSOLIDATED FINANCIAL HIGHLIGHTS & PERFORMANCE STANDALONE FINANCIAL PERFORMANCE APPENDIX: USD CONVERSION 3 6#10Commercial Bank Group Overview The Commercial Bank Q.S.C. Established in 1975, Commercial Bank is Qatar's 2nd largest conventional bank by assets, net loans, customers' deposits and total equity Enjoys a 7.6% (1) market share of loans and 7.0% (1) market share of deposits in Qatar Operates a network of 29 branches in Qatar and is present in Turkey, Oman and UAE through its subsidiaries and associates Alternatifbank, National Bank of Oman ("NBO") and United Arab Bank ("UAB") Strong capitalization with Basel III capital adequacy ratio of 17.3% (1) Focus on sustainable controlled growth in its core business, proactive management of risk, liquidity and capital and continuing improvement in the quality of its service to customers In the long term, expansion strategy is a blend of strong organic growth in Qatar and international expansion through banking alliances A Diversified Geographical Footprint... Strong and Supportive Shareholding Structure (2) Foreign Nationals Qatar Holding 16.8% 19.3% ..That Has Been Evolving Over Time - Financial Assets (QAR billion) Qatar Nationals 63.9% Alternatifbank CB Turkey Ownership 100.0% (1) # Branches 29 (1) # Branches 49 (1) 127.5 133.8 113.2 119.2 123.1 5% 6% 5% 5% 9% 18% 17% 16% 19% 18% 1% 2% 1% UAB Ownership 40.0% (1) 8 (1) # Branches Qatar UAE Oman 5% 5% NBO 77% 68% 75% 78% 71% Ownership 34.9% (1) # Branches 60 (1) 2015 2016 2017 2018 2019 1. As of June 30, 2020 2. Source: Qatar Exchange, as of 30th June 2020 ■Qatar Other GCC Other Middle East Rest of the World 10 65 3#11Commercial Bank is the Second Largest Conventional Bank in Qatar by Assets, Net Loans, Customers' Deposits and Total Equity Leading Market Shares in Qatar (H1 2020) (1) 8.7% Assets 7.6% Loans Total Assets Breakdown by Operating Segment (2019) 7.0% Deposits Others 6% Alternatifbank 13% Retail/ 13% -Wholesale 69% Commercial Bank Credit Ratings - outlook revised to stable by all rating agencies, in line with revised upgrade in outlook for Qatar Total Assets (QAR million) 138,449 147,536 143,675 134,928 130,380 123,421 2015 2016 2017 2018 Loans and Advances to Customers (QAR million) 2019 H1 2020 89,122 76,601 77,798 84,642 88,009 87,000 2015 2016 2017 2018 2019 H1 2020 Net Profit (QAR million) Foreign Currency Bank Rating Agency Deposits/IDR Outlook Date 1,434 1,674 2,021 948 902 LT ST 501 604 Moody's S&P Fitch A3 Prime 2 Stable Aug 2020 BBB+ A-2 Stable Jun 2020 2015 2016 2017 2018 2019 H1 2019 H1 2020 A F1 Stable Nov 2019 1. Standalone Qatar Operations, market shares based on Qatar's Market size from Qatar Central Bank as of 30th June 2020 11 3 55#12Key Strengths & Competitive Advantages Strong Domestic Franchise; Leading Market Position 2nd largest conventional bank in Qatar by assets, net loans, customers' deposits and total equity, in operation since 1975 Strong corporate relationships across public and private sectors Proven strength in retail banking, leading credit card provider GDR Issue (first by Qatari bank), US$5.0bn EMTN programme in place Experienced Management with Proven Track Record Committed and experienced senior management team Prominent, influential and stable Board of Directors ◆ Senior managers have significant banking (domestic and international) experience Shareholder Support Strong Financial Profile Diversified Footprint Systemic importance to the Qatari banking sector given CB's scale Qatar's Government holds a 16.8% stake in Commercial Bank through Qatar Holding High earnings potential Sustainable growth in core loan portfolio with good asset quality Diversified revenue base; expansion outside Qatar to increase diversification ◆ Strong capitalization Operates branches in Qatar and is present in Turkey, Oman and UAE through its subsidiaries and associates Alternatifbank, National Bank of Oman and United Arab Bank Developed 5 year Strategy to Transform Bank's Performance ◆ 5 year strategic plan commenced and announced to the investor community in Nov 2016. Focus points include improving CET1 capital, reshaping the loan portfolio to improve asset quality, aligning the cost to income ratio with market peers by streamlining the branch network and operations 12 65#13Qatar Banks' Snapshot Total Assets (QAR billion, H1 2020) Net Loans (QAR billion, H1 2020) 9.6% Y-o-Y growth 7.3% 1.8% 6.6% 7.2% 9.5% 9.4% 4.4% Y-o-Y growth Customers' Deposits (1) (QAR billion, H1 2020) Y-o-Y growth 11.0% 5.0% 1.5% 4.4% 2.6% 705 11.5% 10.6 % 13.1% 10.3% (0.8%) 0.4% 4.7% 0.7% 4.6% 13.1% (6.8%) 712 972 166 144 112 109 108 59 54 ✓ 87 78 62 44 35 32 107 78 32 32 67 56 35 29 25 QNB QIB Masraf ΑΙ Rayan Doha Bank QIIB ΑΙ Ahli Khaliji Bank QNB QIB Masraf 65 ΑΙ Rayan Doha Bank QIIB ΑΙ Ahli Khaliji Bank Total Liabilities (QAR billion, H1 2020) Total Equity (QAR billion, H1 2020) Masraf QNB QIB -465 ΑΙ Rayan Total CAR Ratio (H1 2020) Doha Bank QIIB ΑΙ Ahli Khaliji Bank 880 92 19.7% 18.7% 18.6% 18.3% 17.7% 17.3% 17.3% 17.2% 144 122 96 95 22 22 13 13 51 47 38 8 7 6 QNB QIB Masraf Doha ΑΙ Bank QIIB Rayan ΑΙ Ahli Khaliji Bank QNB QIB Masraf ΑΙ Rayan Doha Bank QIIB ΑΙ Ahli Khaliji Bank Masraf Al Rayan ΑΙ Khaliji QIB QNB Doha Bank Ahli QIIB Bank Conventional Bank Islamic Bank In Qatar, Islamic and conventional banking operations have to be segregated Source: Companies' financial statements 1. Islamic Banks' deposits calculated as Customer's Current Accounts plus Equity of Investment Account Holders 13 65 3#14Strategic Intent 1 Maintain a minimum CET1 range of 11.0% to 11.5% 3 De-risk legacy assets, diversify the portfolio and proactively exit high risk names Further diversifying our loan book Costs broadly held flat until CB moves back into alignment with the market average 5 Focus on client experience as a key differentiator Deepen our digital leadership through end-to-end process automation 'One Team - One Bank' culture 8 Market leader for compliance and good governance 9 A region-wide 'Alliance of banks' with closer integration of risk protocols and business strategy for sustainable earnings 14 65 3#15Awards Achieved by Commercial Bank Validate our Strategy Leadership in Transaction Banking BANK Client Experience as a key differentiator Continued focus on compliance and good governance Digital leadership in banking S BEST DIGIT BEST DIGITAL BEST DIGITAL BEST DIGITAL ANK AWARD TANK AWARD KAWARD AWARD 2020 2020 BEST TRADE GHAR GOR GIS GLOBAL GGG GORANCE ANCE FINANCE CANCE CT OFFERS DIGITAL BAR BEST ONLINE ( SAND SERVICES MOST INNOVATIVE DIGITAL BANK 2020 This is to centi'y that Commercial Bank of Qatar was awarded Best Consumer Mobile Banking App Qatar in the Che Finance World's Best Digital Bank Awand, 2019 BEST DIGITAL YEARS BANK AWARD 2019 20 Annual GLOBAL FINANCE WORLD FINANCE BEST CORPORATE GOVERNANCE, QATAR 2019 COMMERCIAL BANK OF QATAR ✓ Fourth year running - Best Retail Bank in Qatar (Asian Banker) ✓ Fourth year running - Best Cash Management Bank in Qatar (Asian Banker) ✓ Best Transaction Banking Service in Qatar (Asian Banker) ✓ Second year running - Best Online Cash Management (Global Finance) Second year running - Best in Trade Finance Services (Global Finance) ✓ Best Online Product Offering (Global Finance) Best Remittance Product and Service in Qatar (Asian Banker) Two year running - Best Mobile Banking App (Global Finance) Best in Social Media Marketing and Service (Global Finance) Best Mobile Banking Application (International Finance Magazine) INTERNATIONAL FINANCE AWARDS 2020 Most Innovative Digital Bank •Best Mobile Banking Application QATAR ✓ Best Corporate Governance in Qatar (World Finance) ✓ Excellence in Leadership ✓ in the Middle East (Euromoney) Best Consumer Digital Bank in Qatar (Global Finance) ✓ Most Innovative Digital Bank (Global Finance & Internationalal Finance Magazine) Best Performing Bank in Qatar 2020 (The Banker) 15 3#16Commercial Bank Response to COVID-19 Accelerated digital transformation strategy Focus on digital tools that reduce the need for human interaction Launched new digital products 80/20 work from home Critical functions split across sites to ensure business continuity Branches: electronic appointment system and protective health measures in place Customer and Staff Safety Household CB Worker PayCard سي بي سمارت لكشوف الرواتب CB SMART Payroll 99 CB PAY Digital For Merchants 65 Uptake of virtual meeting technologies ◆ Bank interactions becoming more advisory (risk outlook/wealth management) · Opportunity to extend relationship management model to a wider base Advisory Risk De-risking and de-emphasized concentration in certain sectors Focus on government and public sector Prudent new business origination Supporting our Customers Postponed loan installments and interest payments ◆ SMEs receiving concessionary interest rates in affected sectors Supporting National Response Guarantee Programme Increased customer communication 16 65#17Stakeholder engagement Customer engagement surveys Call centre and complaint resolution mechanism 3,000+ shareholders Quarterly calls and Investor Analyst Day ESG in Practice Selected ESG highlights Remuneration linked to sustainable performance First bank in Qatar to introduce deferred bonuses for Executive Management with provisions for malus and clawback (2018) New digital product launched in 2020 that promotes financial inclusion: Household Worker PayCard Committed to the development of the SME sector in line with the Qatar National Vision 2030 through Enterprise Banking Over 95% of retail customer transactions are via digital channels ◆ 87% of spending on locally-based suppliers (2019) ◆ 2.76% of pre-tax profits invested in the community (2019) Paper recycling program, reduction of one time use plastic consumables and energy saving LED light initiatives introduced in 2019 Customers Investors Employees Regulators Community Suppliers • 2,320 full time employees (2019) . National Development Programme and leader-led training • New Staff Club and gym Compliance with applicable laws and regulations Public disclosures via QSE, Annual Corporate Governance Report, Annual Report Comprehensive CSR programme focused on the local community Close to 600 active suppliers Transparent and audited processes for supplier selection 17 3 55#18QATAR IN PERSPECTIVE COMMERCIAL BANK: SUMMARY HIGHLIGHTS ➤ CONSOLIDATED FINANCIAL HIGHLIGHTS & PERFORMANCE STANDALONE FINANCIAL PERFORMANCE APPENDIX: USD CONVERSION 18 55#19Executive summary Strategic Focus Progress • • Net profit decreased by 5.0% to QAR 901.2m as compared to H1 2019 NIMs improved to 2.4% from 2.0% in H1 2019 Operating profit of QAR 1,527.2m, up by 17.9% as compared to H1 2019 Excellence in Leadership in the Middle East award from "Euromoney" • Best Performing Bank in Qatar from "The Banker" • Results • Capital & Funding Reshaping Loan Book Provisioning • • • . • Most Innovative Digital Bank and Best Mobile Banking Application from "International Finance Magazine" Best Consumer Digital Bank in Qatar, Best Online Product Offering, Most Innovative Digital bank, Best Online Cash Management, Best Trade Finance Service, Best Mobile Banking App, Best in Social Media Marketing and Service from "Global Finance Middle East" Best Cash Management Bank in Qatar award for the third year in a row, and Best Transaction Banking service in Qatar from "The Asian Banker" Best Retail Bank in Qatar award for the fourth year in a row and the Best Remittance Product and Service in Asia Pacific, Middle East and Africa from "The Asian Banker" CET1 and Total Capital Ratios increased to 11.5% and 17.3% respectively as compared to 11.0% and 16.3% at 30 June 2019 Total consolidated deposits increased by QAR 0.3bn, up 0.4% in H1 2020 v June 2019 Low cost deposits have increased by 11.4%, year-on-year Consolidated loan book at QAR 87.0bn in H1 2020, up 1.5% v H1 2019. To support our corporate customers and the economy, we have postponed loan installments and interest payments Focus remains on re-shaping profile of the lending book, by diversifying risk across a range of sectors including decreasing real estate exposure and increasing exposure to government and public sector. Government sector remains at 11% (excluding temporary Government overdraft), while real estate and contracting sectors were down by 3% and 1%, respectively as compared to H1 2019 NPL ratio increased marginally to 5.0% in H1 2020 compared to 4.9% in H1 2019, while loan coverage ratio (including ECL) decreased to 90% as compared to 96.2% in H1 2019 Gross provisions at QAR 530.9m is 3.5% higher than that of H1 2019. The provisions are higher mainly on account of higher ECL due to the COVID- 19 pandemic . Cost of Risk reduced to 51bps compared with 100bps in H1 2019 due to strong recoveries Costs Subsidiaries & Associates • Consolidated Cost to Income ratio reduced from 29.9% to 23.5% (normalized ¹ 26.5%) and in Qatar from 26.6% to 19.2% (normalized ¹ 22.8%) by increase in operating income and reduction of costs through digitisation, automation and productivity enhancements. Decrease in staff costs is on account of IFRS 2 accounting for its share options granted to staff Alternatifbank reported net profit of TL 66.7m (QAR 38.5m), down by 40.0% as compared to H1 2019 (on QAR basis) NBO reported net profit of OMR 15.0m (CB's share QAR 49.6m), down by 40.7% as compared to H1 2019 UAB reported net loss of AED 208.9m (CB's share of QAR 82.8m), as compared to net profit of AED 35.8m in H1 2019 1Normalized numbers stripped off the impact of IFRS 2 and the underlying derivative income which result from the movement in the share price for the staff performance scheme, so we can focus on the underlying trend 19 65#20Progress Against our 5-year Plan QAR Million Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q4 2019 (Normalized¹) Q1 2020 (Normalized¹) Q2 2020 (Normalized¹) Operating Income 900 947 1,006 1,494 907 1,090 1,010 1,002 1,076 Costs 278 274 272 404 177 293 286 272 279 Operating Profit 622 673 734 1,090 730 797 724 730 797 Net Provisions 221 208 197 29 189 107 191 189 107 Associates Income 50 49 4 (524) (134) (187) 4 (134) (187) Net Profit 440 509 531 542 402 499 542 402 499 Lending Volume 86,023 85,745 89,095 88,009 88,773 87,000 88,009 88,773 87,000 Deposit Volume 82,054 77,364 74,294 76,297 77,364 77,709 76,297 77,364 77,709 NIM 2.0% 2.1% 2.4% 3.2% 2.4% 2.4% 2.6% 2.5% 2.4% C/I Ratio 30.9% 28.9% 27.1% 27.0% 19.5% 26.9% 28.4% 27.1% 26.0% COR (bps) gross - 126 112 95 40 94 144 111 94 144 COR (bps) - net 102 98 71 2 83 19 63 83 19 NPL Ratio 5.6% 4.9% 4.9% 4.9% 5.0% 5.0% 4.9% 5.0% 5.0% Coverage Ratio 80.3% 96.2% 95.2% 82.2% 84.6% 90.0% 82.2% 84.6% 90.0% CET 1 10.9% 11.0% 11.0% 11.1% 11.1% 11.5% 11.1% 11.1% 11.5% CAR 16.1% 16.3% 16.2% 16.4% 16.6% 17.3% 16.4% 16.6% 17.3% EPS (annualized) 0.37 0.44 0.46 0.47 0.34 0.43 0.47 0.34 0.43 20 ¹Normalized numbers stripped off the impact of IFRS 2 and the underlying derivative income which result from the movement in the share price for the staff performance scheme, so we can focus on the underlying trend 65 3#21Group Financial Performance - Half Year Ended 30 June 2020 Group Profitability QAR million Consolidated Balance Sheet H1 2020 H1 2019 % QAR million H1 2020 H1 2019 % Net interest income 1571 1218 29.0% Total assets 143,675 141,180 1.8% Non-interest income 426 629 -32.2% Loans & advances 87,000 85,745 1.5% Total costs (470) (552) -14.9% Investment Securities 26,770 23,463 14.1% Net provisions (296) (428) -30.8% Customer Deposits 77,709 77,364 0.4% Associates income (321) 99 -424.2% Net profit after tax 901 948 -5.0% Total equity 21,684 20,477 5.9% Performance Ratios Capital H1 2020 H1 2019 H1 2020 H1 2019 ROAE ROAA NIM 8.2% 9.4% RWA (QAR million) 113,106 112,173 1.2% 1.4% CET 1 ratio (Basel III) 11.5% 11.0% 2.4% 2.0% Total Capital ratio (Basel III) 17.3% 16.3% 21 65 3#22Earnings Performance - Half year ended 30 June 2020 Profitability Net interest income up by 29.0% to QAR 1,570.8m in H1 2020 v H1 2019 NIM increased to 2.4% in H1 2020 v 2.0% in H1 2019 ◆Increase in margins is a result of proactive management of the cost of funding both in Qatar and Turkey Net interest margin 2.5% 2.4% 2.2% 2.2% 2.1% 2.0% Non-interest income reduced to QAR 426.4m compared to QAR 628.8m in H1 2019 ◆ The overall decrease in non-interest income was mainly due to an adverse unrealized mark to market movement in investment and trading income as a result of the unprecedented volatility in the global markets 2016 2017 2018 2019 I H1 2019 H1 2020 Net interest income as a % of average interest earning assets, including (i) Loans and advances to customers (ii) bonds and (iii) loans to other credit institutions Operating Profit 3,119 2,204 2,335 1,942 1,527 1,295 2016 2017 2018 2019 I H1 2019 H1 2020 22 3 65#23Cost to Income Ratio Improves as Cost Efficiency Measures Take Effect Operating Expenses Cost to income ratio lower at 23.5% (Normalized 26.5%) in H1 2020 v 29.9% in H1 2019 driven by a reduction in staff cost. Staff costs reduced by 26.4% to QAR 247.3m in H1 2020 vs H1 2019 mainly on account of the IFRS 2 impact of the performance rights scheme due to the movement in CB share price Continued focus on digital processes and tight expense management ◆In Qatar, C/I Ratio reduced from 26.6% in H1 2019 to 19.2% (Normalized 22.8%) in H1 2020. Cost to Income Ratio Consolidated 45.7% ཀ I 37.5% 33.4% 29.9% 28.3% 26.5% 2016 2017 2018 2019 I H1 2019 H1 2020* Cost to Income Ratio Domestic 40.2% ' I 33.0% 28.5% 26.6% 25.3% 22.8% 2016 2017 2018 2019 IH1 2019 H1 2020* *H1 2020 represents Normalized C/I ratio 23 3 55#24Improved Loan Book Structure Summary ◆ Loans to customers at QAR 87.0bn, up 1.5% v H1 2019 ◆ Growth in commercial and services sectors ◆Reduction in real estate and contracting sectors Loan book diversified across sectors Corporate customers represent 80% of total loan book Focus continues on improving market share in Government and Public sector Loan Book Breakdown by Division - June 2020 Retail 20% Corporate 80% Qatari Banks Credit Facilities Breakdown by Sector - June 2020 Loan Book Breakdown by Sector - June 2020 Industry, 2% Other, 1%. Outside Qatar, 5% Sector H1 2020 H1 2019 Consumption, 13% Gov't and Public Sector Industry 11% 11% 10% 9% Gov. & Semi- Gov.. Agencies, 31% Real Estate, 15% Commercial 15% 11% Services 31% 30% Contracting 4% 5% Real Estate 21% 24% Contracting, 3% Services, 17% Consumption 7% 9% Other 1% 1% Commercial, 13% 100% 100% Source: QCB Gov't and Public Sector excludes temporary Government overdraft 24 65#25Asset Quality - 30 June 2020: Decrease in Provision for Loan Losses Summary Net impairment for loan loss of QAR 225.2m v QAR 433.7m in H1 2019 QAR 10.6m for Wholesale Loan Coverage Ratio 96.2% 90.0% 78.9% 81.0% 78.6% 71.2% QAR 118.5m for Retail QAR 96.1m for Alternatifbank NPL ratio increased marginally to 5.0% from 4.9% in H1 2019 Loan coverage at 90.0% v 96.2% in H1 2019 2016 2017 * 2018 onwards includes ECL Net Provision for Loan Loss (QAR million) 2.03% 1.64% I 1.07% 1.02% 0.68% 1,697 0.51% I 1,268 2016 2017 927 2018 Net Provison (QAR'm)2 2018 2019 I H1 2019 H1 2020 Non-Performing Loan ('NPL') Ratio (90 day basis) 5.6% 5.0% 4.9% 4.9% 5.0% 4.2% 3,025 2,825 2,295 2,209 2,347 3,219 594 517 725 434 726 807 757 927 713 483 485 398 225 843 805 839 983 902 1,009 2019 IH1 2019 H1 2020 2016 2017 2018 2019 IH1 2019 H1 2020 Cost of Risk (%) Retail UHNW ISME Corporate 25 65#26Investment Portfolio - 30 June 2020: High Asset Quality with 84.8% of the Portfolio Invested in HQLA Government Bonds Investment Portfolio - 30 June 2020 vs 30 June 2019 Investment Other debt sec 9.8% Equities I Investment 1.9% I Funds I 0.1% Other debt sec 12.6% Equities 2.5% Summary Investment portfolio up 14.1% to QAR 26.8bn v Jun 2019 Driven by purchase of highly rated sovereign bonds Investments in highly rated Sovereign Bonds provides stability to the portfolio and makes it less volatile ♦ 84.8% Government Bonds ◆86.0% AAA+ to A-rated securities Funds 0.1% Investment Portfolio by Credit Rating Government Bonds 88.2% H1 2019 Investment Portfolio Evolution (QAR million) Government Bonds 84.8% H1 2020 18% I 17% 19% Credit Rating Portfolio Weight 16% 14% 12% AAA+ to A- 86% BBB+ to BB- 5% 26,844 26,770 22,206 23,463 B+ to B- 7% 19,629 15,377 Unrated 2% 2016 2017 2018 2019 I Investment securities H1 2020 I H1 2019 -% of Total Assets 26 55#27Funding: Continue to Build Up Diverse Sources of Funding Summary Customers' deposits up by 0.4% to QAR 77.7 bn in H1 2020 v H1 2019 representing 54.1% of the total balance sheet Well diversified funding mix ◆ Total equity represents 15.1% of funding mix Total Funding Mix - 30 June 2020 ■Customers' Deposits ■Total Shareholders' Equity 4% 15% 12% 54% Due to Banks and Financial Institutions 15% Debt Securities & Other borrowings Other Liabilities Debt Issued and Other Borrowed Funds Commercial Bank Credit Ratings Issuance Type (QARm) H1 2020 H1 2019 Subordinated Notes 1,079 3,437 Rating Foreign Ccy Deposits/IDR Agency Bank Strength Outlook Date EMTN 7,178 6,319 LT Senior Notes 259 1,650 Moody's A3 ST Prime 2 bal Stable Jun 20 Other loans (including 12,806 9,873 CPs) Fitch A F1 bb+ Stable Nov19 Total 21,322 21,279 S&P BBB+ A-2 bb+ Stable Jun 20 27 3 55#28Well Diversified Deposit Portfolio Summary Customer deposits up by 0.4% to QAR 77.7 bn v H1 2019 Diversified deposit mix with Government and Semi-Government at 20.7%, corporate at 30.1% and individuals at 31.8% ◆ Current and Savings accounts deposit composition at 34.5% of the deposit base The mix of Qatar non resident deposit is 17% Customer Deposits (QAR million) Time Deposits Savings Deposits Demand & Call Deposits 77,633 70,924 71,786 76,297 77,364 77,709 2016 2017 2018 2019 I H1 2019 H1 2020 Qatari Banks Deposits Breakdown by Sector - June 2020 Deposits by Customer Type - June 2020 Source: QCB Gov. & Semi- Gov. Agencies, 32% Corporate, 20% Non Individuals, 24% Resident, 23% Non resident deposits Semi-Gov. Agencies 21% Corporate 30% 17% Individuals 32% 28 3 55#292015 0.3 Capitalization Levels - 30 June 2020 Dividend distribution per share (QAR) Summary Total equity at QAR 21.7bn down by QAR 0.1bn from Dec 2019, due to: Decrease in foreign currency translation and other reserves by QAR 0.2bn and QAR 0.4bn, respectively Increase in retained earnings by QAR 0.5bn on account of account of profits of H1 2020 adjusted by the dividends payment of 2019 Capital Adequacy Ratio at 17.3% (Basel III) Total equity (QAR million) Reserves AT1 ■ Equity I 21,021 21,756 21,684 19,856 | 20,477 19,301 2016 Cash dividend 0.2 0.15 0.1 0.05 2017 2018 Bonus shares 2019 15.2% 9.7% 13.1% 2016 2017 2018 2019 I H1 2019 H1 2020 Capital Adequacy Ratio (Basel III) Min ratios 2019: CET1 9% Tier1 11%, Total Capital ratio 14% CET1 ■Tier1 Total Capital ratio 2016 2017 11.2% 14.5% 16.1% 10.5% 15.5% 14.0% 11.1% 14.4% 16.4% 11.0% 14.5% 16.3% 2018 2019 H1 2019 H1 2020 11.5% 15.0% 17.3% 29 65#30QATAR IN PERSPECTIVE COMMERCIAL BANK: SUMMARY HIGHLIGHTS ➤ CONSOLIDATED FINANCIAL HIGHLIGHTS & PERFORMANCE STANDALONE FINANCIAL PERFORMANCE APPENDIX: USD CONVERSION 30 55#31Commercial Bank Financial Performance - Half Year Ended 30 June 2020 (CB Domestic) Profitability Balance Sheet QAR million H1-2020 H1-2019 % QAR million H1-2020 H1-2019 % Net interest income 1,402 1,069 31.2% Total assets 128,146 123,896 3.4% Non-interest income 336 514 -34.6% Loans & advances 75,402 74,129 1.7% Total costs Investment Securities (334) (422) 25,416 -20.9% 21,073 20.6% Net provisions Customer Deposits 68,180 (197) 67,651 0.8% (312) -36.9% Total equity 21,434 20,531 4.4% Net profit 1,207 849 42.2% Performance Ratios Capital H1-2020 H1-2019 H1-2020 H1-2019 ROAA 1.9% 1.4% RWA (QAR million) 94,178 92,942 NIM 2.4% 2.0% CET 1 ratio 11.5% 11.4% C/I ratio (normalized) 22.8% 26.6% Total Capital ratio 17.0% 16.1% 31 65#32Associates' Performance - 30 June 2020 National Bank of Oman (NBO) Net profit after tax at OMR 15.0m, down by 40.7% as compared to H1 2019 Net operating income at OMR 59.2m, down by 8.0% from H1 2019 Net interest income decreased by 2.8% to OMR 45.0m Non-interest income reduced by 21.2% to OMR 14.2m NBO Performance (OMR million) Operating Income ■ Profit 136 132 129 128 | 64 56 59 51 51 44 25 15 ◆ Net provisions increased to OMR 9.2m, up by 116.2% from H1 2019 ◆ Loan portfolio increased by 0.4% at OMR 2.8bn v H1 2019 2016 2017 2018 2019 H1 2019 H1 2020 ◆ Customers' deposits up by 5.7% at OMR 2.6bn from H1 2019 United Arab Bank (UAB) Net loss of AED 208.9m in H1 2020 due to higher provisions, as compared to net profit of AED 35.8m in H1 2019 Net operating income down by 22.3% to AED 219.0m v AED 281.7m in H1 19 Net interest income down by 20.4% to AED 163.4m Non-interest income down 27.3% to AED 55.6m UAB Performance (AED million) Operating Income ■ Profit 861 I 677 647 545 17 77 282 219 36 -209 2016 2017 2018 2019 H1 2019 H1 2020 Provisions increased to AED 296.4m v AED 87.8m in H1 19 Loan book down by 15.8%, to AED 10.4bn v H1 19 Customers' deposits decreased by 9.6% to AED 11.7bn v H1 19 -523 -471 32 2 65#33Alternatifbank - H1 2020 Financials Balance Sheet (TL million) H1-2020 H1-2019 % Total assets 33,556 30,146 11% Asset size in line with the budget with 11% YoY growth ◆ 23% YoY loan growth, with increasing share of TL loans to 48% (Dec19: 43%) Total loans 21,875 17,748 23% ◆ Accumulated investments due to higher yields Investments 4,720 4,720 30% Total deposits 17,945 15,345 17% Strong deposit growth with higher DD ratio Tier 1 ratio of 10.6%, above the minimum ratio of 8.5%, and CAR of 18.4%, above minimum ratio of 12.0%. Shareholder equity 2,388 2,094 14% Despite unexpected market conditions and regulations NII is broadly flat YoY Net fee income growth of 34%, yet swap restrictions had a severe negative impact on non-interest income Costs maintained broadly stable and below budget through tight management and pro active measures Higher provisions mainly due to currency impact hurt the bottom-line Source: Based on consolidated financial statements as of 30 June 2020 Profitability (TL million) H1-2020 H1-2019 % Net interest income 289 293 -1% Non interest income 154 174 -12% Gross operating income 443 467 -5% Operating expense (191) (185) 3% Net provisions (170) (178) -4% Income tax expense (15) (26) -43% Net profit 40 67 78 -14% 33#34QATAR IN PERSPECTIVE COMMERCIAL BANK: SUMMARY HIGHLIGHTS ➤ CONSOLIDATED FINANCIAL HIGHLIGHTS & PERFORMANCE STANDALONE FINANCIAL PERFORMANCE APPENDIX: USD CONVERSION 34 55 3#35Commercial Bank is the Second Largest Conventional Bank in Qatar by Assets, Net Loans, Customers' Deposits and Total Equity Leading Market Shares in Qatar (H1 2020) (1) 8.7% Assets 7.6% Loans Total Assets Breakdown by Operating Segment (2019) Total Assets (USD million) 40,532 39,471 7.0% 38,035 37,068 35,819 33,907 Deposits Others 6% Alternatifbank 13% Retail/ 13% -Wholesale 69% Commercial Bank Credit Ratings - outlook revised to stable by all rating agencies, in line with revised upgrade in outlook for Qatar Foreign Currency Bank 2015 2016 2017 2018 Loans and Advances to Customers (USD million) 2019 H1 2020 24,484 21,044 21,373 23,253 24,178 23,901 2015 2016 2017 2018 2019 H1 2020 Net Profit (USD million) Rating Agency Deposits/IDR Outlook Date 460 555 394 LT ST 260 248 138 166 Moody's S&P Fitch A3 Prime 2 Stable Aug 2020 BBB+ A-2 Stable Jun 2020 2015 2016 2017 2018 2019 H1 2019 H1 2020 A F1 Stable Nov 2019 1. Standalone Qatar Operations, market shares based on Qatar's Market size from Qatar Central Bank as of 30th June 2020 All QAR figures converted into USD at an exchange rate of USD 1 equivalent to QAR 3.64 35 55#36Qatar Banks' Snapshot Total Assets (USD billion, H1 2020) Net Loans (USD billion, H1 2020) Y-o-Y growth Y-o-Y growth 9.6% 7.3% 1.8% 6.6% 7.2% 9.5% 267 9.4% 4.4% 11.0% 5.0% 1.5% 4.4% 2.6% 11.5% 10.6 % 13.1% 46 40 30 30 16 15 12 112 194 31 24 21 21 17 10 10 9 9 QNB QIB Masraf ΑΙ Rayan Masraf Doha Bank QIIB ΑΙ Ahli Khaliji Bank QNB QIB 65 ΑΙ Rayan Doha Bank QIIB ΑΙ Ahli Khaliji Bank Total Liabilities (USD billion, H1 2020) 242 Total Equity (USD billion, H1 2020) 25 Customers' Deposits (1) (USD billion, H1 2020) Y-o-Y growth 10.3% (0.8%) 0.4% 4.7% 0.7% 4.6% 13.1% (6.8%) 196 29 21 18 15 10 87 Masraf Doha Bank QIIB ΑΙ Ahli Khaliji Bank QNB QIB -465 ΑΙ Rayan Total CAR Ratio (H1 2020) 19.7% 18.7% 18.6% 18.3% 17.7% 17.3% 17.3% 17.2% 40 34 26 26 14 13 10 6 6 4 4 2 2 2 QNB QIB Masraf Doha ΑΙ Bank QIIB Rayan ΑΙ Ahli Khaliji Bank QNB QIB Masraf ΑΙ Rayan Doha Bank QIIB ΑΙ Ahli Khaliji Bank Masraf Al Rayan ΑΙ Khaliji QIB QNB Doha Bank QIIB Ahli Bank Conventional Bank Islamic Bank In Qatar, Islamic and conventional banking operations have to be segregated Source: Companies' financial statements 1. Islamic Banks' deposits calculated as Customer's Current Accounts plus Equity of Investment Account Holders All QAR figures converted into USD at an exchange rate of USD 1 equivalent to QAR 3.64 36 3 55#37Group Financial Performance - Half Year Ended 30 June 2020 Group Profitability USD million Consolidated Balance Sheet H1 2020 H1 2019 % USD million H1 2020 H1 2019 % Net interest income 432 335 29.0% Total assets 39,471 38,786 1.8% Non-interest income 117 173 -32.2% Loans & advances 23,901 23,556 1.5% Total costs (129) (152) -14.9% Investment Securities 7,354 6,446 14.1% Net provisions (81) (118) -30.8% Customer Deposits 21,349 21,254 0.4% Associates income (88) 27 -424.2% Net profit after tax 248 260 -5.0% Total equity 5,957 5,626 5.9% Performance Ratios Capital H1 2020 H1 2019 H1 2020 H1 2019 ROAE ROAA NIM 8.2% 9.4% RWA (USD million) 31,073 30,817 1.2% 1.4% CET 1 ratio (Basel III) 11.5% 11.0% 2.4% 2.0% Total Capital ratio (Basel III) 17.3% 16.3% All QAR figures converted into USD at an exchange rate of USD 1 equivalent to QAR 3.64 37 65 3