Qatar International Islamic Bank (Q.P.S.C) Unaudited Interim Condensed Consolidated Financial Statements 30 June 2017

Transcription

1. Qatar International Islamic Bank (Q.P.S.C) UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2017
4. Qatar International Islamic Bank (Q.P.S.C) UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF INCOME For the six months ended 30 June 2017 Three months ended 30 June 30 June 2016 2017 (Unaudited) (Unaudited) QR’000 QR’000 Six months ended 30 June 30 June 2016 2017 (Unaudited) (Unaudited) QR’000 QR’000 Income from financing activities Net income from investing activities 329,289 78,198 309,895 71,897 671,471 149,468 605,089 138,803 Total income from financing and investing activities 407,487 381,792 820,939 743,892 Fee and commission income Fee and commission expense 39,977 (9,449) 38,377 (10,650) 86,444 (18,685) 80,442 (21,674) Net fee and commission income 30,528 27,727 67,759 58,768 Net foreign exchange gains Share of results of investments in associates 11,931 - 21,265 (2) 15,308 (866) 8,135 (866) Total income 449,946 416,788 909,961 817,102 Staff costs Depreciation and amortisation Finance expense Other expenses (35,612) (5,075) (40,633) (33,644) (37,450) (4,564) (36,862) (31,430) (75,704) (9,878) (81,023) (70,307) (71,621) (8,880) (69,147) (54,517) (114,964) (110,306) (236,912) (204,165) Total expenses Impairment provision recovered on investment securities Impairment loss provided on financing assets Net profit for the period before return to investment account holders - - 485 (3,000) - 334,982 306,482 670,534 612,937 (106,242) (86,500) (205,283) (169,844) Net profit for the period 228,740 219,982 465,251 443,093 Earnings per share Basic and diluted earnings per share (QR per share) 1.51 1.45 3.07 Share of investment account holders of profit The attached notes 1 to 16 form part of these unaudited interim condensed consolidated financial statements 3 2.93
5. Qatar International Islamic Bank (Q.P.S.C) UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended 30 June 2017 Share capital QR’000 Legal reserve QR’000 Risk reserve QR’000 1,513,687 - 2,452,360 - 572,152 - 13,036 17,303 - - - - 17,303 12 - - - - 11 - - - - 1,513,687 2,452,360 572,152 Notes Balance at 1 January 2017 (Audited) Fair value reserve movement Net profit for the period Total recognised income and expense for the period Cash dividends paid to the shareholders Net movement in other reserves Balance at 30 June 2017 (Unaudited) Fair value reserves QR’000 30,339 Other reserves QR’000 Proposed cash dividends QR’000 84,796 - 605,476 - - (605,476) Retained earnings QR’000 Total equity attributable to holders of the Bank QR’000 Sukuk eligible as additional capital QR’000 Total QR’000 435,523 465,251 5,677,030 17,303 465,251 1,000,000 - 6,677,030 17,303 465,251 465,251 482,554 - 482,554 (605,476) - (605,476) - (1,627) - 1,627 83,169 - 902,401 The attached notes 1 to 16 form part of these unaudited interim condensed consolidated financial statements 4 - 5,554,108 - - 1,000,000 6,554,108
6. Qatar International Islamic Bank (Q.P.S.C) UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) For the six months ended 30 June 2017 Note Balance at 1 January 2016 (Audited) Fair value reserve movement Net profit for the period Total recognised income and expense for the period Cash dividends paid to the shareholders Balance at 30 June 2016 (Unaudited) 12 Share capital QR’000 Legal reserve QR’000 1,513,687 - 2,452,360 - 1,513,687 2,452,360 Risk reserve QR’000 548,401 548,401 The attached notes 1 to 16 form part of these unaudited interim condensed consolidated financial statements 5 Fair value reserves QR’000 1,877 10,523 10,523 12,400 Other reserves QR’000 84,477 84,477 Proposed cash dividends QR’000 Retained earnings QR’000 Total QR’000 605,476 - 322,834 443,093 5,529,112 10,523 443,093 (605,476) 443,093 - 453,616 (605,476) 765,927 5,377,252 -
7. Qatar International Islamic Bank (Q.P.S.C) UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the six months ended 30 June 2017 Six months ended 30 June 30 June 2016 2017 (Unaudited) (Unaudited) QR’000 QR’000 Notes Cash flows from operating activities Net profit for the period Net changes in operating assets and liabilities 465,251 (615,965) 443,093 (2,561,572) Net cash flows used in operating activities (150,714) (2,118,479) (682,232) (46,630) 1,292,987 (46,870) (2,438) 1,627 815 (228,533) 490,479 (2,574) (4,838) 1,821 517,259 256,355 1,164,117 (605,476) 1,444,628 (605,476) 558,641 839,152 925,186 2,547,213 (1,022,972) 2,987,164 3,472,399 1,964,192 Cash flows from investing activities Purchase of investment securities Acquisition of investment in associates Proceed from sale / redemption of investment securities Purchase of fixed assets Purchase of intangible assets Dividends received from associate companies Dividends income received Net cash flows from investing activities Cash flows from financing activities Change in equity of investment account holders Dividends paid to shareholders 12 Net cash flows from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at 1 January Cash and cash equivalents at 30 June 14 The attached notes 1 to 16 form part of these unaudited interim condensed consolidated financial statements 6
8. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 1 LEGAL STATUS AND PRINCIPAL ACTIVITIES Qatar International Islamic Bank (Q.P.S.C) (“QIIB” or “the Bank”) was incorporated under Amiri Decree No. 52 of 1990. The Bank operates through its head office located on Grand Hamad Street in Doha and 20 local branches. The Bank is listed and its shares are traded on the Qatar Exchange. The commercial registration number of the Bank is 13023. The address of the Bank’s registered office is Doha, State of Qatar, P.O. Box 664. The Bank is engaged in banking, financing and investing activities in accordance with its Articles of Incorporation, Islamic Shari’a rules and principles as determined by the Shari’a Supervisory Board of the Bank and regulations of Qatar Central Bank (QCB). The unaudited interim condensed consolidated financial statements of the Group for the period ended 30 June 2017 were authorized for issue in accordance with a resolution of the Board of Directors on 23 July 2017. 2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of preparation The unaudited interim condensed consolidated financial statements of the Bank and its subsidiary (together referred to as the “Group”) for the six months ended 30 June 2017 have been prepared in accordance with the guidance given by the International Accounting Standard 34 - "Interim Financial Reporting". The unaudited interim condensed consolidated financial statements do not contain all information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2016. In addition, results for the six month period ended 30 June 2017 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2017. The preparation of the unaudited interim condensed consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. The actual results may differ from these estimates. The significant judgments made by the management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2016. The Group’s financial risk management objectives are consistent with those disclosed in the consolidated financial statements for the year ended 31 December 2016. The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2016, which were prepared in accordance with the Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (the "AAOIFI"), the Shari’a Rules and Principles as determined by the Shari’a Supervisory Board of the Group, related regulations of Qatar Central Bank and applicable provisions of the Qatar Commercial Company’s Law No. 11 of 2015. In line with the requirements of AAOIFI, for matters which are not covered by FAS, the Group uses guidance from the relevant International Financial Reporting Standards (the "IFRSs") as issued by the International Accounting Standards Board (“IASB”). 7
9. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) New standards and amendments and interpretations effective from 1 January 2017 There are no news standards, amendments and interpretations effective from 1 January 2017. New standards and amendments and interpretations issued but not yet effective International Financial Reporting Standard No. 9 (IFRS 9): Financial Instruments. The final version of IFRS 9 was issued in July 2014, replacing the earlier versions of introducing new classification and measurement requirements (issued in 2009 and 2010) and a new hedge accounting model (Issued in 2013) and has an effective date of 1 January 2018. IFRS 9 will replace IAS 39 Financial Instruments: Recognition and Measurement and introduces new requirements for the classification and measurement of financial assets and financial liabilities, a new model based on expected credit losses for recognising loan loss provisions and provides for simplified hedge accounting by aligning hedge accounting more closely with an Entity’s risk management methodology. The application of IFRS 9 may have significant impact on amounts reported in the consolidated financial statements and will result in more extensive disclosures in the consolidated financial statements. However, the Group is currently in the process of evaluating and implementing the required changes in its systems, policies and processes to comply with IFRS 9 and regulatory requirements, and hence it is not practical to disclose a reliable quantitative impact until the implementation program is further advanced. Basis of consolidation The unaudited interim condensed consolidated financial statements include the financial statements of the Bank and its following special purpose entity after elimination of intercompany balances and transactions: Principal business activity Country of incorporation QIIB Sukuk Ltd (i) Cayman Islands Sukuk issuance Effective percentage of ownership 31 December 30 June 2016 2017 - Note: (i) QIIB Sukuk Ltd was incorporated in the Cayman Islands as an exempted company with limited liability for sole purpose of Sukuk issuance for the benefit of QIIB. Investment in an associate (Umnia Bank) The Group has entered into an agreement with Crédit Immobilier et Hôtelier SA to establish a new bank in Morocco. The management has assessed that Group has a significant influence over this entity through 40% equity share. Therefore, the Group interest in Umnia Bank is accounted using the equity method. Umnia Bank is engaged in banking, financing and investment activities in accordance with its Article of Association and is incorporated in Morocco. Investment is initially recognised at cost and will be adjusted thereafter for the post-acquisition change in the investor's share of the investee's net assets. 3 SEGMENT INFORMATION The Group has three reportable segments, as described below, which are the Group’s strategic divisions. The strategic divisions offer different products and services, and are managed separately based on the Group’s management and internal reporting structure. For each of the strategic divisions, the Group Management Committee reviews internal management reports on monthly basis. The following summary describes the operations in each of the Group’s reportable segments: Corporate banking Includes financings, deposits and other transactions and balances with corporate customers, government and semi government institutions and SME customers. Retail banking Includes financings, deposits and other transactions and balances with retail customers. 8
10. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 3 SEGMENT INFORMATION (CONTINUED) Treasury & Investments Undertakes the Group’s funding and centralised risk management activities through borrowings, issues of Sukuk, use of risk management instruments for risk management purposes and investing in liquid assets such as short-term deposits and corporate and government Sukuk. Investments activities include the Group’s trading and corporate finance activities. Information regarding the results, assets and liabilities of each reportable segment is included below. Performance is measured based on segment profit, assets and liabilities growth, as included in the internal management reports that are reviewed by the ALCO committee. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments. Six months ended 30 June 2017 (Unaudited) Corporate banking QR’000 Retail banking QR’000 Treasury & Investments QR’000 Total QR’000 External revenue: Total income from financing and investing activities Net fee and commission income Net foreign exchange gains Share of results of investments in associates 460,400 36,371 - 211,071 31,388 - 149,468 21,265 (2) 820,939 67,759 21,265 (2) Total segment income 496,771 242,459 170,731 909,961 485 485 (3,000) 171,216 907,446 Other material non-cash items: Impairment provision recovered on investment securities Impairment loss provided on financing assets Reportable segment net profit before allocation of expenses Six months ended 30 June 2016 (Unaudited) (3,000) 493,771 Corporate banking QR’000 - 242,459 Retail banking QR’000 - Treasury & Investments QR’000 Total QR’000 External revenue: Total income from financing and investing activities Net fee and commission income Net foreign exchange gains Share of results of investments in associates 396,785 31,969 - 208,304 26,799 - 138,803 15,308 (866) 743,892 58,768 15,308 (866) Reportable segment net profit before allocation of expenses 428,754 235,103 153,245 817,102 9
11. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 3 SEGMENT INFORMATION (CONTINUED) Treasury & Investments QR’000 Total QR’000 7,050,940 13,616,574 42,309,098 20,188,196 9,777,794 38,598,576 30 June 2017 (Unaudited) Corporate banking QR’000 Retail banking QR’000 Reportable segment assets 21,641,584 8,632,586 Reportable segment liabilities and equity of investment account holders 31 December 2016 (Audited) Reportable segment assets Reportable segment liabilities and equity of investment account holders Corporate banking QR’000 Retail banking QR’000 Treasury & Investments QR’000 Total QR’000 20,437,913 6,795,413 12,279,196 39,512,522 7,289,034 19,351,004 8,586,897 35,226,935 30 June 2016 (Unaudited) Corporate banking QR’000 Retail banking QR’000 Treasury & Investments QR’000 Total QR’000 Reportable segment assets 19,888,388 6,803,834 12,522,972 39,215,194 9,250,805 19,093,140 7,976,246 36,320,191 Reportable segment liabilities and equity of investment account holders The tables below provide reconciliation of reportable segment revenues, profit, assets, liabilities and equity of investment account holders: Six months ended 30 June 30 June 2016 2017 (Unaudited) (Unaudited) QR’000 QR’000 Reportable segment net profit before allocation of expenses Unallocated expenses Net profit for the period 10 907,446 (442,195) 817,102 (374,009) 465,251 443,093
12. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 3 4 SEGMENT INFORMATION (CONTINUED) 30 June 2017 (Unaudited) QR’000 31 December 2016 (Audited) QR’000 30 June 2016 (Unaudited) QR’000 Assets Total assets for reportable segments Other unallocated amounts 42,309,098 3,557,468 39,512,522 3,038,438 39,215,194 3,050,418 Consolidated total assets 45,866,566 42,550,960 42,265,612 Liabilities and equity of investment account holders Total liabilities and equity of investment account holders for reportable segments Other unallocated amounts 38,598,576 713,882 35,226,935 646,995 36,320,191 568,169 Consolidated total liabilities and equity of investment account holders 39,312,458 35,873,930 36,888,360 FAIR VALUE AND CLASSIFICATION OF FINANCIAL INSTRUMENTS The tables below set out the carrying amounts and fair values of the Group’s financial assets and financial liabilities: Fair value through statement of income QR’000 Fair value through equity QR’000 Amortised cost QR’000 - - 2,773,291 5,216,551 28,692,524 28,692,524 2,773,291 5,216,551 28,692,524 Total carrying amount QR’000 Fair value QR’000 30 June 2017 (Unaudited) Cash and balances with Qatar Central Bank Due from banks Financing assets Investment securities: - Measured at fair value - Measured at amortised cost Other assets Due to banks and financial institutions Customers’ current accounts Sukuk financing Other liabilities 2,773,291 5,216,551 1,030 - 246,367 - 6,550,155 741,479 247,397 6,550,155 741,479 247,397 6,481,535 741,479 1,030 246,367 43,974,000 44,221,397 44,152,777 - - 7,229,289 7,210,837 2,548,505 713,881 7,229,289 7,210,837 2,548,505 713,881 7,229,289 7,210,837 2,548,505 713,881 - - 17,702,512 17,702,512 17,702,512 11
13. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 4 FAIR VALUE AND CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED) Fair value through statement of income QR’000 Fair value through equity QR’000 Amortised cost QR’000 Total carrying amount QR’000 Fair value QR’000 - - 2,037,951 3,771,169 27,233,326 2,037,951 3,771,169 27,233,326 2,037,951 3,771,169 27,233,326 31 December 2016 (Audited) Cash and balances with Qatar Central Bank Due from banks Financing assets Investment securities: - Measured at fair value - Measured at amortised cost Other assets Due to banks and financial institutions Customers’ current accounts Sukuk financing Other liabilities 1,220 - 176,969 - 7,196,719 586,336 178,189 7,196,719 586,336 178,189 7,154,922 586,336 1,220 176,969 40,825,501 41,003,690 40,961,893 - - 6,039,310 6,219,923 2,547,587 646,995 6,039,310 6,219,923 2,547,587 646,995 6,039,310 6,219,923 2,547,587 646,995 - - 15,453,815 15,453,815 15,453,815 Fair value through statement of income QR’000 Fair value through equity QR’000 Amortised cost QR’000 Total carrying amount QR’000 Fair value QR’000 - - 1,966,536 4,684,953 26,692,222 1,966,536 4,684,953 26,692,222 1,966,536 4,684,953 26,692,222 30 June 2016 (Unaudited) Cash and balances with Qatar Central Bank Due from banks Financing assets Investment securities: - Measured at fair value - Measured at amortised cost Other assets Due to banks and financial institutions Customers’ current accounts Sukuk financing Other liabilities 1,240 - 168,278 - 6,632,675 552,626 169,518 6,632,675 552,626 169,518 6,633,631 552,626 1,240 168,278 40,529,012 40,698,530 40,699,486 - - 5,429,576 6,810,881 2,546,670 568,169 5,429,576 6,810,881 2,546,670 568,169 5,429,576 6,810,881 2,546,670 568,169 - - 15,355,296 15,355,296 15,355,296 12
14. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 4 FAIR VALUE AND CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED) Valuation of financial investments The Group measures fair value using the following fair value hierarchy that reflects the significant the impacts used in making the measurement valuation technique: · · Level 1: Quoted market price (unadjusted) in an active market for an identical instrument. Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments. · Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments the Group determines fair values using valuation techniques. Valuation techniques include net present value and discounted cash flow models, comparison to similar instruments for which market observable prices exist and other valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark profit rates, credit spreads and other premia used in estimating discount rates, sukuk and equity prices, foreign currency exchange rates, equity and equity index prices and expected price volatilities and correlations. The objective of valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date, that would have been determined by market participants acting at arm’s length. Financial asset classification The table below analyses investment securities measured at fair value at the end of the period, by the level in the fair value hierarchy into which the fair value measurementis categorised: 30 June 2017 (Unaudited) Total QR’000 - - Quoted equity-type investments classified as fair value through income statement Quoted equity-type investments classified as fair value through equity Unquoted equity-type investments classified as fair value through equity Fair value measurement using Quoted prices in Significant Significant active observable unobservable markets inputs inputs (Level 1) (Level 2) (Level 3) QR’000 QR’000 QR’000 1,030 1,030 - - 140,027 140,027 - - 106,340 - - 106,340 13
15. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 4 FAIR VALUE AND CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED) Financial asset classification (continued) 31 December 2016 (Audited) Total QR’000 - 5 Quoted equity-type investments classified as fair value through income statement Quoted equity-type investments classified as fair value through equity Unquoted equity-type investments classified as fair value through equity Fair value measurement using Quoted prices in Significant Significant active observable unobservable markets inputs inputs (Level 1) (Level 2) (Level 3) QR’000 QR’000 QR’000 1,220 1,220 - - 70,978 70,978 - - - 105,991 105,991 - IMPAIRMENT The Group assesses at each statement of financial position date whether there is objective evidence that an asset is impaired. Objective evidence that financial assets (including equity-type investments) are impaired can include default or delinquency by a counterparty / investee, restructuring of financing assets or advance by the Group on terms that the Group would not otherwise consider, indications that a counterparty or issuer will enter bankruptcy, the disappearance of an active market for a security, or other observable data relating to a group of assets such as adverse changes in the payment status of counterparty or issuers, or economic conditions that correlate with defaults. In addition, for an investment in equity-type instruments, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. Equity-type investments classified at fair value through equity In the case of equity-type investments classified as fair value through equity and measured at fair value, a significant (where market value has declined by a minimum of 20%) or prolonged (where market value has declined for 9 months at least) decline in the fair value of an investment below its cost is considered in determining whether the investments are impaired. If any such evidence exists for equity-type investments classified at fair value through equity, the cumulative loss previously recognised in the unaudited interim condensed consolidated statement of changes in equity is removed from equity and recognised in the unaudited interim condensed consolidated statement of income. Impairment losses recognised in the unaudited interim condensed consolidated statement of income on equity-type investments are subsequently reversed through equity. The Group has recovered QR 0.5 million (30 June 2016: nil) as impairment on investment securities which were recognised under “Impairment provision recovered on investment securities” in the unaudited interim condensed consolidated statement of income. Financial assets carried at amortised cost (including investment in Sukuk instruments classified as amortised cost). For financial assets carried at amortised cost, impairment is measured as the difference between the carrying amount of the financial assets and the present value of estimated cash flows discounted at the assets’ original effective profit rate. Losses are recognised in unaudited interim condensed consolidated statement of income and reflected in an allowance account. When a subsequent event causes the amount of impairment loss to decrease, the impairment loss is reversed through the unaudited interim condensed consolidated statement of income, to the extent of previously recognised impairment losses. The Group considers evidence of impairment for financial assets carried at amortised cost at both a specific asset and collective level. All individually significant financial assets are assessed for specific impairment. Financial assets that are not individually significant are collectively assessed for impairment by grouping assets together with similar risk characteristics. The Group has provided QR 3 million (30 June 2016: nil) as impairment on financing assets which was recognised under “Impairment loss provided on financing assets” in the unaudited interim condensed consolidated statement of income. Investment in associates The Group determines at each reporting date whether there is any objective evidence that the investment in associate is impaired. If this is the case, the Group calculates the amount of impairment as being the difference between the fair value of the associate and the carrying value and recognises the amount in the unaudited interim condensed consolidated statement of income. The Group has not recognised impairment during the period. 14
16. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 6 FINANCING ASSETS 30 June 2017 (Unaudited) QR’000 31 December 2016 (Audited) QR’000 30 June 2016 (Unaudited) QR’000 Total financing assets Less: Deferred profit Specific impairment of financing assets Suspended profit 30,699,598 (1,598,092) (367,168) (41,814) 29,227,989 (1,599,439) (364,848) (30,376) 28,541,002 (1,571,919) (248,227) (28,634) Net financing assets 28,692,524 27,233,326 26,692,222 Note: The total non-performing financing assets including past dues but not impaired amounted to QR 659 million, representing 2.15 % of the gross financing assets as at 30 June 2017 (31 December 2016: amounted to QR 510 million, representing 1.74% of the gross financing assets). 15
17. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 7 INVESTMENT SECURITIES 31 December 2016 (Audited) Quoted Unquoted Total QR’000 QR’000 QR’000 30 June 2017 (Unaudited) Quoted Unquoted Total QR’000 QR’000 QR’000 30 June 2016 (Unaudited) Quoted Unquoted Total QR’000 QR’000 QR’000 Investments classified at fair value through income statement · Equity-type investments Debt-type investments classified at amortised cost - State of Qatar Sukuk - Fixed rate - Floating rate Equity-type investments classified at fair value through equity 1,030 - 1,030 1,220 - 1,220 1,240 - 1,240 1,030 - 1,030 1,220 - 1,220 1,240 - 1,240 1,969,846 1,347,372 - 3,214,020 18,917 - 5,183,866 1,366,289 - 1,941,899 1,221,602 - 4,014,300 18,918 - 5,956,199 1,240,520 - 1,934,238 1,128,266 - 3,550,000 18,919 1,252 5,484,238 1,147,185 1,252 3,317,218 3,232,937 6,550,155 3,163,501 4,033,218 7,196,719 3,062,504 3,570,171 6,632,675 140,027 106,340 246,367 70,978 105,991 176,969 62,277 106,001 168,278 3,458,275 3,339,277 6,797,552 3,235,699 4,139,209 7,374,908 3,126,021 3,676,172 6,802,193 16
18. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 8 EQUITY OF INVESTMENT ACCOUNT HOLDERS 30 June 2017 (Unaudited) QR’000 Term accounts Savings accounts Share in fair value reserve Total 9 31 December 2016 (Audited) QR’000 30 June 2016 (Unaudited) QR’000 15,376,304 6,187,348 13,834,410 6,565,125 15,273,798 6,246,790 21,563,652 20,399,535 21,520,588 46,294 20,580 12,476 21,609,946 20,420,115 21,533,064 LEGAL RESERVE In accordance with QCB Law No. 13 of 2012 as amended, 10% of net profit for the year is required to be transferred to the reserve until the legal reserve equals 100% of the paid up share capital. This reserve is not available for distribution except in circumstances specified in Qatar Commercial Companies Law No. 11 of 2015 and after QCB approval. No appropriation was made as the legal reserve equal more than 100% of the paid up share capital. 10 RISK RESERVE In accordance with QCB regulations, the minimum requirement for risk is 2.5% of the of the total private sector exposure granted by the Group inside and outside Qatar after the exclusion of the specific provisions and profit in suspense. The finance provided to / or secured by the Ministry of Finance – Qatar or finance against cash guarantees is excluded from the gross direct finance. No transfer to risk reserve has been made during the period as the required amount will be transferred at year end (the year ended 31 December 2016: QR 23.7 million was transferred to risk reserve). 11 OTHER RESERVES Other reserves represent the undistributed share of associates profits after deducting the cash dividends received. The dividends received from associates during the period amounted to QR 1.6 Million (30 June 2016: nil). 12 CASH DIVIDENDS On 3 April 2017, the shareholders of the Group approved in the general assembly meeting 40% cash dividends for the year ended 31 December 2016 (QR 4 per share), (30 June 2016: 40% cash dividends for the year ended 31 December 2015 (QR 4 per share). 13 SUKUK ELIGIBLE AS ADDITIONAL CAPITAL During the year 2016, the Group issued perpetual sukuk eligible as additional capital for an amount of QR 1 billion. The sukuk is unsecured and the profit distribution are discretionary, non –cumulative, and payable annually , the profit rate for the first five years is fixed and it will be revised in case of renewal. The Group has right not to pay profit and the sukuk holders have no right to claim profit on the sukuk. The sukuk do not have a maturity date and has been classified as equity. 17
19. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 14 CASH AND CASH EQUIVALENTS For the purpose of preparing the unaudited interim condensed consolidated statement of cash flows, cash and cash equivalents comprise the following balances with original maturities of less than three months: 30 June 2017 (Unaudited) QR’000 31 December 2016 (Audited) QR’000 30 June 2016 (Unaudited) QR’000 1,361,684 2,110,715 660,611 1,886,602 543,843 1,420,349 3,472,399 2,547,213 1,964,192 30 June 2017 (Unaudited) QR’000 31 December 2016 (Audited) QR’000 30 June 2016 (Unaudited) QR’000 6,123,626 3,963,140 431,170 11,609 4,989,753 3,552,993 344,008 9,075 5,479,220 3,573,556 402,730 9,203 10,529,545 8,895,829 9,464,709 Cash and balances with Qatar Central Bank (excluding restricted QCB reserve account) Due from banks 15 CONTINGENT LIABILITIES AND COMMITMENTS Contingent liabilities Unused financing facilities Guarantees Letters of credit Others 18
20. Qatar International Islamic Bank (Q.P.S.C) NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2017 16 RELATED PARTY TRANSACTIONS Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties include the significant shareholders and entities over which the Group and the shareholders’ exercise significant influence, directors and executive management of the Group. The amount outstanding/transactions during the period / year with members of the Board or the companies in which they have significant interests were as follows: 30 June 2017 (Unaudited) Associate Board of companies Directors Others QR’000 QR’000 QR’000 Assets: Financing assets 14,431 Equity of investment account holders 10,327 3,046 Off balance sheet items: Contingent liabilities, guarantees and other commitments 31 December 2016 (Audited) Associate Board of companies Directors Others QR’000 QR’000 QR’000 30 June 2016 (Unaudited) Associate Board of companies Directors Others QR’000 QR’000 QR’000 3,251,710 7,458 662,231 3,097,261 15,289 688,587 3,014,530 7,398 108,001 14,453 84,133 149,024 18,467 72,556 128,665 - 24,724 3,046 200 24,382 3,246 200 58,157 633,309 19