#1بنك الدوحة DOHA BANK Investor Presentation Q2 2023 results 44 Years#2Table of Contents 1. Operational & Financial Highlights 2. Overview 3. Financial Summary 4. Sustainable Finance Framework 5. Disclaimer 2#31. Operational and Financial Highlights 1. Wholesale Banking Group: ✓ Closed ‘2' sizeable transactions, with drawdowns to occur in Q3 - which will help with the Private Sector growth guidance of 3-5% 2. Treasury & Investments: ✓ Portfolio assets increased a net US$ 176 million (QAR 640 million). Significantly de-risked the portfolio by reducing exposures to lower quality, sub-investment grade, and higher volatility assets thereby improving overall credit quality, reducing ECLs, and RWA consumption. Raised cost-effective liquidity for the Bank. ✓ Q-Trade is launched 3. International Banking Group: ✓ Rep offices: Hong Kong closed in Q1. Sri Lanka operations closed in Q2. 1 other rep office closure on track, operations to cease by end of month. ✓ Foreign branches: Chennai branch closed, initiated closure of another branch Awaiting regulatory approval ✓ Branch relocations: Kuwait, Mumbai and Kochi on track ✔ Kuwait and India strategy well underway to redefine the business. 4. Retail Banking Group: Converted two local branches to two Corporate Service Centers Dedicated to welcome and serve all retail and corporate customers of the bank. This will help streamline and improve efficiency and more importantly enhance the customer experience. ✓ Potential business: Signed several renowned corporate card deals with high potential spends. Sharq Insurance: ✓ Revenue drivers: New business production across all products and all distribution channels. ✓ Profitability outlook: on pace for 100% growth YOY ✓ Capital growth, aspirations: No change planned or agreed. Concluded an arbitration in favor of Sharq. 3#4Operational and Financial Highlights Net interest income +9.3% QoQ, while net operating income +12.1% QoQ Private Sector Lending +2.2% YoY CET1 13.19% and Total CAR of 19.76% Net Fee & Commission Income +3.4% QoQ and +7.0% H1 YoY Staff Costs, depreciation, and other expenses marginally higher at 0.6% YoY Total Reserves for loans and advances (including expected credit losses) at 101%, improved from 87% as on year-end 2022 Stage 3 Provision Coverage improves to 70% versus 61% as on year-end 2022 Launched Sustainable Finance Framework and earned Second Party Opinion During Q1 closed Hong Kong Rep office, during Q2 closed Sri Lanka Rep office and Chennai Branch. The bank is on track to close another Rep office and further merge branches internationally in the coming quarter. Also, the relocation of foreign offices well underway. 4#5Financial Comparison(s) - QoQ & YoY Net Interest Income QAR Mn Net Fees and Commission Income Q2 2023 Q1 2023 Q2 2022 Chg Pct QoQ 537.4 491.5 596.2 9.30% Chg Pct YoY -9.90% 95.2 92.1 93.9 3.40% 1.40% Net Income from Insurance Activities 6.7 4.9 1.4 37.00% 376.40% Net Operating Income 715.0 638.1 712.1 12.10% 0.40% Investment Securities 25,380 25,034 24,372 1.40% 4.10% Loans and Advances (excluding Government) 55,248.50 55,317.60 54,075.90 -0.10% 2.20% CET1 Total CAR 13.19% 12.86% 12.56% +33bps +63bps 19.76% 19.37% 19.23% +39bps +43bps 5#6Performance Scorecard Guidance for 2023 (A) Q1 2023 (A) Q2 2023 Capital Adequacy Ratio 18.50-19.00% 19.37% 19.76% Net Loan Growth Net 3-5% / Pvt. 5% YTD Net -2.5% / Pvt. +0.2% YTD Net -3.9% / Pvt. Flat Net Interest Margin Cost of Funds Non-performing loans Update/Guidance for 2023 18.50-19.00% Pvt. 5% 2023-2027 5-year Strategy Maintain min. 17% 3-5% p.a. 2.25% 2.10% 2.23% 2.10% -2.20% 2.50% Top 3 locally Currently 4th Currently 4th Top 3 locally Top 3 locally 6.00% 6.58% 6.71% 6.35-6.50% 4.5-5% Cost of Risk 1.60% 1.38% 1.66% 1.60-1.70% 120-130bps Cost to Income <30% 35.5% 34.00% c.<35% <25% Return on Equity 7.00% 6.35% 5.80% c.6.25% 12-14% 6#7Note 2. Overview • • • Founded in 1979 Listed on the Qatar Stock Exchange Full branch operations in Qatar, United Arab Emirates, India and Kuwait Largest international network of representative offices among Qatari banks: China, Canada, Turkey, Singapore, Germany, Japan, United Kingdom, South Korea, South Africa, Bangladesh, Australia, and Nepal Brokerage and financial services associate in India Sharq Insurance Company, a 100% owned insurance company in Qatar Client base of more than 450,000 active customers (1) 18 Domestic Branches and 2 Corporate Service Centers (under Retail Banking Group) and 1 Corporate Branch (under Wholesale Banking), 3 E-Branches, 86 ATMs, 1 Mobile ATM and 2 Mobile ITM 1 Qatar 2 Dubai - UAE 3 Abu Dhabi - UAE 4 Kuwait City - Kuwait 5 Mumbai India 6 Kochi - India 7 London - UK 8 Frankfurt - Germany 9 Istanbul Turkey 10 Singapore 11 Shanghai China 12 Seoul S. Korea 13 Tokyo - Japan 14 Sydney Australia 15 Toronto Canada 16 Johannesburg - South Africa 17 Dhaka - Bangladesh 18 Kathmandu - Nepal (1) Salaried, non-salaried and under Wages Protection Scheme ("WPS") 15 16 18 17 5 10 12 13 7#8Strong ratings profile underpinned by highly rated sovereign Share performance and diversified shareholder base Agency Category Ratings Outlook Doha Bank Share price and market capitalization Date Value Last Price 30-Jun-23 1.539 Moody's Bank Deposit Ratings LT Baal Stable 52 Week High 03-Jul-22 2.600 52 Week Low 26-Jun-23 1.512 Fitch (1) Issuer Default Rating LT A- Positive Current Market Qatari Riyals Mn 4,772 Capitalization USD Mn 1,310 Diversified shareholder base and strong support(3) Qatar Sovereign Moody's Counter Party Risk LT Foreign Ind's, 2.322% Aa3 Positive Fitch (2) Issuer Default Rating LT AA- Positive Foreign Inst's, 13.534% S&P Counter Party Risk LT АА Stable State of Qatar GRSIA, 6.674% Qatari Ind's, owns 23.822% Note (1) Fitch upgrades from stable to positive 06.04.2023 (2) Fitch upgrades from stable to positive 28.03.2023 (3) State of Qatar owns 23.822% shared by the Qatar Investment Authority 17.148% & 6.674% by the General Retirement Social Insurance Authority via the 'Civil Pension Fund', as of 30 June 2023 QIA, 17.148% Qatari Inst's, 24.786% 35.536% 8#9Doha Bank at a glance ✓ Well-established banking franchise with strong brand value ✓ Global footprint over five continents ✓ Strong capital position ✓ Strong liquidity profile ✓ Healthy diversification of income ✓ Well diversified portfolio ✓ Launched Sustainable Finance Framework and earned Second Party Opinion 9#10Doha Bank is structured in four Business Units and holds 100% of Sharq Insurance شرق للتأمين ذ.م.م 1. Wholesale Focus on corporate and commercial banking, structured finance, public sector finance, mortgage finance and real estate services, trade finance, factoring services and small and medium enterprises Assets QAR 49.53 billion Total income QAR 1.73 billion 53.17% of total assets Source Company financials As of 30 June 2023 2. Treasury & Investments Responsible for activities such as foreign exchange, treasury products and managing the Bank's proprietary investment book Assets QAR 29.20 billion 31.34% of total 3. Retail Provides a wide range of products and services to individuals, including transactional and deposit accounts, mortgages, remittances, priority banking, private banking, insurance, personal loans and credit cards Assets QAR 4.43 billion 4.76% of total assets Total income QAR 0.28 billion assets Total income QAR 0.73 billion 4. International SHARQ INSURANCE L.L.C Established in 2007 as part of the Bank's strategy of creating a fully comprehensive financial services provider and provides general insurance products to corporate and retail customers Provides a range of products and services including guarantees, letters of credit, risk mitigation and discounting products and risk participation in international trade Assets QAR 4.56 billion 4.89% of total assets Total income QAR 0.19 billion Gross Written Premiums QAR 0.04 billion 10#113. Financial Summary Profitability (QR Mn) Jun-23 Jun-22 Chg Y/Y Assets and Liabilities (QR Mn) Jun-23 Jun-22 Chg Y/Y Interest income Interest expense Net interest income 2,628 1,763 49.0% Total assets 93,044 99,027 -6.0% (1,599) (523) 205.4% Loans and advances 55,795 60,741 -8.1% 1,029 1,240 -17.0% Investment securities 25,380 24,372 4.1% Fees and commission 187 175 7.0% Customer deposits 44,078 53,692 -17.9% Foreign exchange gain 53 75 -28.9% Total equity 14,185 13,912 2.0% Income from investment securities 63 33 91.3% Net income from insurance activities 12 211.2% Capital Other income 11 -21.1% Net Operating Income RWA (QR 'Mn) 1,353 1,538 -12.0% CET 1 Ratio (%) Staff cost (260) (253) 2.8% T1 Ratio (%) Non staff cost (200) (204) -2.0% Total Capital Ratio (%) Jun-23 Jun-22 Chg Y/Y 73,850 72,508 1.9% 13.19% 12.56% 5.0% 18.61% 18.08% 2.9% 19.76% 19.23% 2.8% Net impairment loss (452) (413) 9.3% Tax (49) (2) 2133.6% Net profit 392 665 -41.0% Minimum regulatory ratios for 2023: CET1: 8.50%, Tier1: 10.50%, Total Capital Ratio 12.50%, ICAAP 1.00%, Management buffer 0.50% Comments Net fee & commission income and FX represents 61% of the net profit ✓ Interest Income +49% YoY while Net Interest Income -17% YoY Source Company financials As of 30 June 2023 Comments ✓ RWA marginally higher year on year. The bank to be very selective, while still targeting Public Sector and GRES ✓ Investment securities book remains healthy, and we are always monitoring for opportunities 11#12Funding Mix Other liabilities Debt securties *Other borrowings 8.0% Equity 15.2% 3.0% 2.7% Customer deposits 47.4% Due to banks 23.6% 30 June 2023 Total liabilities and equity: QR 93.0 Bn *Other borrowings include syndicated and bilateral borrowings Regulatory Loan to Deposit Ratio 107% 105% 105% 105% 117% Comments ✓ The FY23 funding plan incorporates: ➤ Issuance(s) to extend duration both QAR and/ or USD Reduction in non-resident funding is in line with QCB guidance. ✓ Liquidity profile: Well diversified and stable funding sources with a mixture of customer deposits, syndicated and bilateral borrowings, and debt securities Maintain sufficient HQLA fixed income investment portfolio Unencumbered assets at Head Office of QAR 15.65 billion Regulatory Liquidity Coverage Ratio 155% 144% 201% 173% 141% Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 ■ Actual ■Reg Max 100% ■ Actual ■Reg Min 100% Source Company financials As of 30 June 2023 12#13Capitalization Evolution of capital ratios [7.0% 15.8% 10.7% 16.6% 19.8% 17.8% 19.8% 20.2% 19.9% 18.6% 19.0% 18.8% 18.6% 13.5% 13.0% 11.5% 13.3% Net Interest Margin 2.24% 13.2% 1.98% 2.25% 2.59% 2.39% 2.23% 2018 2019 2020 2021 2022 Jun-23 2018 2019 2020 2021 2022 Jun-23 T1 Ratio ■CET1 Ratio % Total CAR Minimum regulatory ratios for 2023: CET1: 8.50%, Tier1: 10.50%, Total Capital Ratio 12.50%, ICAAP 1.00%, Management buffer 0.50% Comments ✓ Current capital position strong ✓ CAR expected to remain strong in the short to medium term given the credit growth projections, without the need for further capital raising. Source Company financials As of 30 June 2023 13#14Diversified loans and deposits By sector Loans Non-banking Industry, 0.5% FI's, 1.5% Others, 1.7% GRE's, 2.0% Contract Financing, 10.0% Retail, 13.0% Services, 15.6% Real estate, 34.5% Individuals 25.7% Deposits Non-banking FI's, 1.5% Trade, GRE'S, 36.3% 21.2% Net loans: QR 55.8 Bn Retail 13.0% Corporate, 36.5% Loans GRE'S 2.0% By type Current and Call Deposits , 21.0% Deposits Savings Accounts, 6.2% Corporate 85.0% Net deposits: QR 44.1 Bn Net loans: QR 55.8 Bn Net deposits: QR 44.1 Bn Comments Loans ✓ Growth to come from GRES/PSU and Private Sector in particular Services and Trade Comments Deposits Doha Bank consistently ensures it retains a diversified deposit base to minimize concentration risk ✓ Great emphasis is given to liquidity risk management Source Company financials As of 30 June 2023 Term Deposits, 72.9% 14#15Wholesale Banking Overview of the corporate banking loan book June 2023 Industry, 0.60% Non-banking FI's, 1.70% Others, 2.00% Contracting, 11.80% Services, 18.40% Total: QR 50.9 Bn Trade, 25.00% Real estate CAGR (2018-Jun-2023): +1.8% Real estate, 40.60% 18.5 18.3 Comments In line with the bank's strategy, the bank will look to maximize returns from non-borrowing customers and offer robust digitalization channels towards reducing transaction cost and incentivize customer interaction with the bank which will enable the cost of funds to be maintained. Targeted sectors to include, Services and Trade, and in particular, Education/ Healthcare/ Tourism and Logistics 19.4 19.1 Loans (QR Bn) Contract financing CAGR (2018-Jun-2023): -8.9% 20.6 10.5 20.4 10.1 6.0 5.9 6.0 5.5 2018 2019 2020 2021 2022 Jun-23 2018 2019 2020 2021 2022 Jun-23 Trade CAGR (2018- Jun-2023): -0.9% 13.4 13.0 12.5 12.7 11.3 10.6 7.3 Services CAGR (2018-Jun-2023): +4.3% 10.0 9.9 9.5 9.4 8.7 2018 2019 2020 2021 2022 Jun-23 2018 2019 2020 2021 2022 Jun-23 15#16Doha Bank is being selective in terms of Real Estate and Contract Finance Real Estate Qatar market real estate loans (QR Bn) CAGR (2018-Jun-2023): +3.4% 162.3 151.5 148.9 154.0 185.0 176.5 2018 2019 2020 2021 2022 Jun-23 Real estate market share development(1) Contract Finance Qatar market contract financing loans (QR Bn) CAGR (2018-Jun-2023): +2.6% 43.7 43.6 43.1 40.3 37.0 37.3 11 2018 2019 2020 2021 2022 Jun-23 Contract financing market share development(1) 34.5% Loan portfolio is highly collateralized circa 167% 28.5% 27.2% 12.6% 12.2% 12.3% 11.8% 11.6% 11.2% Note 2018 2019 2020 2021 2022 Jun-23 Market Share Doha Bank share of loan portfolio (1) Qatar Central Bank market data as on 31-May-23 10.0% 13.8% 13.8% 13.5% 13.9% 2018 2019 2020 2021 2022 Jun-23 Market Share Doha Bank share of loan portfolio 16#17Credit Quality NPL evolution Total Reserves(1) for loans and advances 138% 5.84% 5.81% 5.98% 6.43% 6.71% 5.83% 124% 101% 87% 81% 77% 2018 2019 2020 2021 2022 Jun-23 2018 2019 2020 2021 2022 Jun-23 Cost of risk (1) June-2023 (2) 2.22% 2.09% 1.78% 1.59% 1.61% 1.66% Percentage on total loans Provision coverage Stage 1 60.36% Stage 2 Stage 3 32.93% 6.71% 0.22% 5.92% 70.08% June-2022 2018 2019 2020 2021 2022 Jun-23 Stage 1 Stage 2 Stage 3 Percentage on total loans Provision coverage 63.97% 30.08% 0.28% 5.01% 5.95% 63.28% Note (1) Includes expected credit losses (ECL) Note (2) Stage 3 provision includes interest in suspense 17#18Investment Book Portfolio Overview ■ Investments limits are linked to Tier 1 capital and set at 25% (excluding SOQs) as per QCB; total utilized currently sits at 20.18% ■ Conservative low hard limits for discretionary trading / investments; total equities FVTPL QAR 38 Mn ◉ Majority of the portfolio in local sovereign fixed income, Qatar 72.43% and Qatar banks 9.11% ■ Fixed Income holdings - current yield 4.40%, with a Net Modified Duration - c.1.61 years Investment portfolio breakdown (%) Total (QR 25,380 Mn) Other Debt Securities 29.3% Equities & Mutual Funds, 3.2% State of Qatar Debt Securities, 67.5% ◉ Currently the portfolio contains QR 8.12 Bn of encumbered assets. The repo borrowings are at a weighted average cost of 4.62% Equity, AT1 and other fund exposures stands at QR 771.15 Mn + QR 32.75 Mn Mutual Funds Investment portfolio - evolution (QR Mn) 26,561 FVOCI (QR 17,499 Mn) Equities, 4.4% Amortized Cost (QR 7,844 Mn) Other Debt Securities, 9.1% 20,727 24,667 25,083 24,964 25,380 2018 2019 2020 2021 2022 Jun-23 Source Company financials As of 30 June 2023 Other Debt Securities, 38.4% State of Qatar Debt Securities, 57.2% State of Qatar Debt Securities, 90.9% 18#194. Sustainable Finance Framework 2023(¹) In May 2023 Doha Bank has published its inaugural Sustainable Finance Framework which allows for the issuance of Green, Social, and Sustainability Financing Instruments ✓ The Framework is aligned with the ICMA Green Bond Principles 2021, Social Bond Principles 2021, Sustainability Bond Guidelines 2021, the Qatar Financial Centre's Sustainable Sukuk and Bond Framework 2022 and the LMA / LSTA / APLMA Green Loan Principles and Social Loan Principles updated in 2023 Sustainable Finance Framework Use of proceeds • The proceeds raised via the Sustainable Financing Instruments will be dedicated to (re)finance Eligible Green and Social Assets . To be eligible, the asset must fall in at least one of the ICMA Green and/or Eligible Categories described • Green and Social Eligible Assets are evaluated and selected based on compliance with the Eligibility Criteria Project evaluation and selection • The evaluation and selection process is governed by Doha Bank's ESG Bond Committee. The committee is formed by members of Treasury, Wholesale and Retail Banking, Investor Relations, Market and Credit Risk, Finance, and Strategy • The proceeds from Sustainable Finance Instruments will be managed in a portfolio approach Management of proceeds • The Bank intends to fully allocate the proceeds to a pool of eligible assets within 24 months from issuance Reporting . Doha Bank will publish a Sustainable Finance Report for the life of the Sustainable Financing Instrument on an annual basis consisting of an Allocation Report and an Impact Report External review • Doha Bank has received a Second Party Opinion on its Framework by Sustainalytics. Note: (1) Sustainable Finance Framework and Second Party Opinion (SPO) are available here 19#20ICMA Eligible Categories Contribution to UN SDGS Eligible Category Green Eligible Categories 11 SUSTAINABLE CITIES 13 AND COMMUNITIES CLIMATE ACTION Green Building Renewable Energy AFFORDABLE AND CLEAN ENERGY Exclusions The Sustainable Finance Asset Pool will explicitly exclude unfunded and non-performing exposures, as well as loans to businesses or projects in the following domains: . . 13 CLIMATE . ACTION • Fossil fuel-related energy generation Environmentally negative resource extraction (such as rare-earth elements, metals or fossil fuels) Nuclear and nuclear-related technologies Weapons, tobacco, gambling, and adult entertainment Deforestation and degradation of forests Renewable Energy Clean Transportation Social Eligible Categories Healthcare Education INDUSTRY, INNOVATION AND INFRASTRUCTURE CLIMATE 13 ACTION INDUSTRY INNOVATION AND INFRASTRUCTURE GOOD HEALTH AND WELL-BEING W❤ QUALITY EDUCATION SUSTAINABLE CITIES 11 AND COMMUNITIES A Second Party Opinion (2) "Sustainalytics is of the opinion that the Doha Bank Sustainable Finance Framework is credible and impactful and aligned with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2021, Green Loan Principles 2023 and Social Loan Principles 2023.' 10INEQUALITIES DECENT WORK AND ECONOMIC GROWTH Support to SMEs and micro-finance M MORNINGSTAR SUSTAINALYTICS Note: (2) The Doha Bank Sustainable Finance Framework Second Party Opinion contains information developed by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary of Sustainalytics and/or its third-party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers. nor 20 20#21Doha Bank is committed to Environmental, Social and Governance (ESG) Sustainable Practices Doha Bank began the publication of its annual sustainability disclosure statements from the year 2009. Doha Bank sustainability reporting is guided by the Qatar Stock Exchange (QSE) ESG reporting methodology; since 2016. Doha Bank has increased the scope of it's reporting to benchmarking its communication to the GRI Universal Standards. The bank supports the mission of GRI to empower decision makers everywhere, through GRI Sustainability Reporting Standards and its multi-stakeholder network, to take-action towards a more sustainable economy and world. It is important to note that Sustainability in our approach to business and to all stakeholders will be a journey that will lead to growth at Doha Bank over a much longer period and will continue to be so into the future as we build upon our growth trajectory as a domestic, regional and international institution. For more information: Doha Bank/ Sustainability/ ر بورصة قطر Qatar Stock Exchange Achieved a score of 100% for the QSE Sustainable Stock Exchanges initiative for the years 2018 - 2021. You can find more here: QSE Arab Sustainability/ Doha Bank was included in the MSCI QSE 20 ESG Index, launched in November 2021. MSCI ESG RATINGS BB As on 25 November 2022, Doha Bank received MSCI ESG Rating of BB. an CCC B BB BBB A AA AAA As on 06 June 2023, Doha Bank received a FTSE ESG Rating of 2.40 out of 5. Doha Bank was the 1st listed company on the Qatar Stock Exchange to be included in the FTSE4Good Index in November 2018. Disclaimer: The use by Doha Bank of any MSCI ESG Research LLC or its affiliates ("MSCI") data, and the use of MSCI Logos, Trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Doha Bank by MSCI. MSCI services and data are the property of MSCI or its information providers and are provided 'as-is' and without warranty. MSCI names and logos are trademarks or service marks of MSCI. FTSE4Good Disclaimer: FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that Doha Bank Q.P.S.C. has been independently assessed according to the FTSE4Good criteria and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products. https://www.ftserussell.com/products/indices/FTSE4Good 21#225. Disclaimer Our discussion may include forward-looking predictions and or expectations. While these forward-looking statements represent our current judgment on what the future holds for the bank, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements considering new information or future events. Throughout the presentation, we will attempt to present some important factors relating to our business that may affect our predictions. A copy of the bank's press release, financials and presentations are available here 22 بنك الدوحة DOHA BANK 44 Years#23Investors Contact Hesham Kalla Head of Investor Relations Tel: +974 4015 5341 / Mob: +974 5549 8634 Email: [email protected] / [email protected] بنك الدوحة DOHA BANK www.dohabank.com 44 Years