Doha Bank Q.P.S.C.

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Doha Bank Q.P.S.C.

Consolidated Financial Statements

31 December 2020

Draft for QCB Approval

Doha Bank Q.P.S.C.
Consolidated Financial Statements
31 December 2020
Contents
Consolidated Financial Statements	Page(s)
Independent auditor’s report	1-4
Consolidated statement of financial position	5
Consolidated income statement	6
Consolidated statement of comprehensive income	7
Consolidated statement of changes in equity	8-9
Consolidated statement of cash flows	10
Notes to the consolidated financial statements	11-84
Supplementary information	85-86

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Doha Bank (Q.P.S.C.)

Report on the audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Doha Bank (Q.P.S.C.) (the ‘Bank’) and its subsidiaries (together the ‘Group’), which comprise the consolidated statement of financial position as at 31 December 2020, the consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2020, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (‘IFRS’) and the applicable provisions of Qatar Central Bank regulations (‘QCB regulations’).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (‘ISA’). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section in this audit report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (‘IESBA Code’) together with the ethical requirements that are relevant to our audit of the Bank’s consolidated financial statements in the State of Qatar, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

Key audit matters (continued)

	Description of key audit matter	How the matter was addressed in our audit
	Impairment of financial assets subject to credit risk-refer to notes 3(g), 4(b), 5(a), 5(b), 8, 9, 10, 11, 14 and 19 in the consolidated financial statements
	We determined this to be a key audit matter because: • Impairment of financial assets subject to credit risk involves: - complex accounting requirements, including assumptions, estimates and judgements underlying the determination of impairment; - Expected Credit Loss (“ECL”) modelling risk over methodology and design decisions; - susceptibility to management bias when making judgements to determine expected credit loss outcomes; and - complex disclosure requirements. • The COVID-19 pandemic has significantly impacted management's determination of ECL. The assumptions regarding the economic outlook are more uncertain which increases the level of judgement required by the Group in calculating the ECL, and the associated audit risk. • The Group’s financial assets, both on and off- balance sheet, subject to credit risk were QAR 121,199 million, as at 31 December 2020 (2019: QAR 130,507 million), hence a material portion of the consolidated statement of financial position. Furthermore, the net impairment recognized by the Group on these financial assets amounted to QAR 1,365 million, in the year ended 31 December 2020 (2019: QAR 1,079 million), hence a material portion of the consolidated statement of income.	Our audit procedures in this area included the following, among others: • Evaluating the appropriateness of the accounting policies adopted based on the requirements of IFRS 9 and applicable QCB regulations, our business understanding and industry practice. • Confirming our understanding of management’s processes, systems and controls implemented, including controls over ECL model development. • Identifying and testing the relevant controls. • Involving information risk management (IRM) specialists to test IT systems and relevant controls. • Evaluating the reasonableness of management’s key judgements and estimates made in ECL calculations, including selection of methods, models, assumptions and data sources in light of the impact of the COVID-19 pandemic. • Involving Financial Risk Management (FRM) specialists `o` to challenge significant assumptions / judgements relating to credit risk grading, significant increase in credit risk, definition of default, probability of default, macro-economic variables, and recovery rates, including the impact of the COVID-19 pandemic; and `o` for evaluating the appropriateness and testing the mathematical accuracy of ECL models applied. • Involving valuation specialists to evaluate the inputs, assumptions and techniques used by the valuers engaged by the Group for the valuation of real estate collateral, relating to the determination of ECL including the impact of the COVID-19 pandemic. • Assessing the completeness, accuracy and relevance of the input data used for ECL calculations. • Evaluating the reasonableness of and testing the post-model adjustments particularly in light of the volatility caused due to impact of the COVID-19 pandemic. • Performing detailed credit risk assessments of a sample of performing and non-performing loans and advances. • Assessing the adequacy of the Group’s disclosures in relation to impairment of financial assets subject to credit risk by reference to the requirements of the relevant accounting standards and QCB regulations.

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

Other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the Bank’s annual report (the “Annual Report”) but does not include the Bank’s consolidated financial statements and our auditor’s report thereon. Prior to the date of this auditor’s report, we obtained the report of the Board of Directors, which will form part of the Annual Report, and the remaining sections of the Annual Report are expected to be made available to us after that date.

Our opinion on the consolidated financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and when it becomes available, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we have obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the remaining sections of the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter with those charged with governance.

Responsibilities of the Board of Directors for the consolidated financial statements

The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS and QCB regulations, and for such internal control as the Board of Directors determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISA, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

Auditor’s responsibilities for the audit of the consolidated financial statements (continued)

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

We have obtained all the information and explanations we considered necessary for the purposes of our audit. The Bank has maintained proper accounting records and its consolidated financial statements are in agreement therewith. We have read the report of the Board of Directors to be included in the Annual Report and the financial information contained therein is in agreement with the books and records of the Bank. We are not aware of any violations of the applicable provisions of the Qatar Central Bank Law No. 13 of 2012 and of the Qatar Commercial Companies Law No. 11 of 2015 or the terms of the Bank’s Articles of Association and the amendments thereto, having occurred during the year which might have had a material effect on the Bank’s consolidated financial position or performance as at and for the year ended 31 December 2020.

Doha State of Qatar

Gopal Balasubramaniam Qatar Auditor’s Registry Number 251 KPMG Licensed by QFMA: External Auditor’s License No. 120153

Doha Bank Q.P.S.C.

Consolidated income statement For the year ended 31 December 2020

QAR ‘000s

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The attached notes 1 to 37 form an integral part of these consolidated financial statements.

Doha Bank Q.P.S.C.

Consolidated income statement For the year ended 31 December 2020

Consolidated income statement
For theyear ended 31 December 2020		QAR ‘000s
Notes Interest income 21 Interest expense 22 Net interest income Fee and commission income 23 Fee and commission expense 24 Net fee and commission income Gross written premium Premium ceded Net claims paid Net income / (loss) from insurance activities Net foreign exchange gain 25 Net income from investment securities 26 Other operating income 27 Operating income Staff costs 28 Depreciation 13 Net impairment (loss) / reversal on investment securities Net impairment loss on loans and advances to customers 10 Net impairment reversal on other financial assets Other expenses 29 Profit before share of results of associate and tax Share of results of associate 12 Profit before tax Income tax (expense) / reversal 30 Profit Earnings per share: Basic and diluted earnings per share (QAR) 31	2020 3,743,770 (1,423,979) 2,319,791 416,434 (112,094) 304,340 40,827 (16,144) (21,446) 3,237 105,843 183,677 20,221 309,741 2,937,109 (441,234) (117,290) (34,680) (1,368,742) 38,299 (309,119) (2,232,766) 704,343 (50) 704,293 (1,269) 703,024 0.16	2019 4,167,069 (2,186,847) 1,980,222 520,703 (126,607) 394,096 37,855 (16,638) (98,463) (77,246) 111,524 305,724 24,665 441,913 2,738,985 (493,291) (121,840) 260 (1,117,733) 38,113 (319,893) (2,014,384) 724,601 187 724,788 29,144 753,932 0.17

The attached notes 1 to 37 form an integral part of these consolidated financial statements.

Doha Bank Q.P.S.C.

Consolidated statement of comprehensive income For the year ended 31 December 2020

QAR ‘000s

Note	2020 703,024	2019 753,932






	(3,741) 631,133 (635,935)	(2,666) 714,850 (341,475)
20 (d) 20 (d) 20 (d)
	(8,543) 2,751 (5,792) 697,232	370,709 8,939
		379,648

		1,133,580

The attached notes 1 to 37 form an integral part of these consolidated financial statements.

Doha Bank Q.P.S.C.

Consolidated statement of changes in equity For the year ended 31 December 2020

QAR ‘000s

	Total	equityattributable to equityholders of the Bank	equityattributable to equityholders of the Bank	equityattributable to equityholders of the Bank	equityattributable to equityholders of the Bank	Total 9,317,914 703,024 (5,792) 697,232 - - (203,000) (17,576) - 9,794,570	Total equity 13,317,914 703,024 (5,792)
Share capital 3,100,467 - - - - - - - - 3,100,467	Legal reserve 5,092,948 - - - 1,626 - - - - 5,094,574	Risk reserve 849,600 - - - - - - - - 849,600	Fair value reserve 155,043 - (2,051) (2,051) - - - - - 152,992	Foreign exchange translation reserve (58,846) - (3,741) (3,741) - - - - - (62,587)	Retained earnings 178,702 703,024 - 703,024 (1,626) - (203,000) (17,576) - 659,524	Total 9,317,914 703,024 (5,792)
						697,232 - - (203,000) (17,576) -	697,232 - - (203,000) (17,576) -
						9,794,570	13,794,570

The attached notes 1 to 37 form an integral part of these consolidated financial statements.

Doha Bank Q.P.S.C.

Consolidated statement of changes in equity For the year ended 31 December 2020

QAR ‘000s

	Total	equityattributable to equityholders of the Bank	equityattributable to equityholders of the Bank	equityattributable to equityholders of the Bank	equityattributable to equityholders of the Bank	Total 8,733,229 753,932 379,648 1,133,580 - - (220,000) (18,848) (310,047) 9,317,914	Total equity 12,733,229 753,932 379,648
Share capital 3,100,467 - - - - - - - - 3,100,467	Legal reserve 5,092,948 - - - - - - - - 5,092,948	Risk reserve 137,200 - - - - 712,400 - - - 849,600	Fair value reserve (227,271) - 382,314 382,314 - - - - - 155,043	Foreign exchange translation reserve (56,180) - (2,666) (2,666) - - - - - (58,846)	Retained earnings 686,065 753,932 - 753,932 - (712,400) (220,000) (18,848) (310,047) 178,702	Total 8,733,229 753,932 379,648
						1,133,580 - - (220,000) (18,848) (310,047)	1,133,580 - - (220,000) (18,848) (310,047)
						9,317,914	13,317,914

The attached notes 1 to 37 form an integral part of these consolidated financial statements.

Doha Bank Q.P.S.C.

Consolidated statement of cash flows For the year ended 31 December 2020

QAR ‘000s

Notes Cash flows from operating activities Profit before tax Adjustments for: Net impairment loss on loans and advances to customers 10 Net impairment loss / (reversal) on investment securities Net impairment reversal on other financial assets Depreciation 13 Amortisation of financing cost Net Income from investment securities 26 Loss on sale of property, plant and equipment Share of results of an associate 12 Profit before changes in operating assets and liabilities Change in due from banks Change in loans and advances to customers Change in other assets Change in due to banks Change in customer deposits Change in other liabilities Social and sports fund contribution Income tax paid Net cash (used in) / from operating activities Cash flows from / (used in) investing activities Acquisition of investment securities Proceeds from sale of investment securities Acquisition of property, furniture and equipment 13 Proceeds from the sale of property, furniture and equipment Net cash from / (used) in investing activities Cash flows from financing activities Proceeds from other borrowings 18 Repayment of issue of debt securities Distribution on Tier 1 capital notes Dividends paid Net cash from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents as at 1 January Cash and cash equivalents at 31 December 33 Operational cash flows from interest and dividend: Interest received Interest paid Dividends received 26	2020 704,293 1,368,742 34,680 (38,299) 117,290 24,995 (155,471) 171 50 2,056,451 2,795,095 (3,283,569) (589,490) (1,000,184) (3,409,837) 277,281 (18,848) (1,560) (3,174,661) (5,064,170) 7,076,464 (19,879) 17 1,992,432 1,358,144 (169,846) (203,000) - 985,298 (196,931) 7,198,677 7,001,746 3,753,833 1,642,954 28,206	2019 724,788 1,117,733 (260) (38,113) 121,840 14,630 (270,097) 40 (187)
		1,670,374 (2,316,713) (5,102,460) (464,681) 4,508,413 2,678,495 446,434 (20,756) 21,696
		1,420,802
		(13,453,006) 8,272,339 (31,666) 135
		(5,212,198)
		2,014,912 (274,514) (220,000) (310,047)
		1,210,351
		(2,581,045) 9,779,722
		7,198,677
		4,166,727 2,142,581 35,627

The attached notes 1 to 37 form an integral part of these consolidated financial statements.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

1 Reporting entity

Doha Bank Q. P. S. C. (“Doha Bank” or the “Bank”) is an entity domiciled in the State of Qatar and was incorporated on 15 March 1979 as a Joint Stock Company under Emiri Decree No. 51 of 1978. The commercial registration of the Bank is 7115. The address of the Bank’s registered office is Doha Bank Tower, Corniche Street, West Bay, P.O. Box 3818, Doha, Qatar.

Doha Bank is engaged in conventional banking activities and operates through its head office in Qatar (Doha) and has 23 local branches, six overseas branches in the United Arab Emirates (Dubai & Abu Dhabi), State of Kuwait, the Republic of India (one branch each in Mumbai, Kochi and Chennai) and representative offices in United Kingdom, Singapore, Turkey, China, Japan, South Korea, Germany, Australia, Hong Kong, Canada, Bangladesh, South Africa, Sri Lanka and Nepal. The consolidated financial statements for the year ended 31 December 2020 comprise the Bank and its subsidiaries (together referred to as “the Group”).

The principal subsidiaries of the Group are as follows:

				Percentage of	ownership
	Country of	Company’s	Company’s
Company’s name	incorporation	capital	activities	2020	2019
Sharq Insurance L.L.C.	Qatar	100,000	General
			Insurance	100%	100%
Doha Finance Limited	Cayman Island	182	Debt Issuance	100%	100%
DB Securities Limited	Cayman Island	182	Derivatives
			Transactions	100%	100%

2 Basis of preparation

a) Statement of compliance

The consolidated financial statements of the Group (“consolidated financial statements”) have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and the applicable provisions of the Qatar Central Bank (“QCB”) regulations.

b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following financial assets that have been measured at fair value:

Investment securities designated at fair value through profit or loss (FVTPL);
Derivative financial instruments;
Investment securities measured at FVTPL;
Other financial assets designated at FVTPL;
Investment securities measured at fair value through other comprehensive income ('FVOCI'); and
Recognised financial assets and financial liabilities designated as hedged items in qualifying fair value hedge relationships to the extent of risks being hedged.

c) Functional and presentation currency

These consolidated financial statements are presented in Qatari Riyals (“QAR”), which is the Bank’s functional and presentation currency. Except as otherwise indicated, financial information presented in QAR has been rounded to the nearest thousand.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

2 Basis of preparation (continued)

d) Use of estimates and judgements

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are described in note 5.

3 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, except for the Inter Bank Offer Rate ("IBOR") transition, as described in note 3(a).

a) New, amended standards and interpretations

The following standards, amendments and interpretations, which became effective as of 1 January 2020, are relevant to the Group:

Amendments to References to Conceptual Framework in IFRS Standards 1-Jan-20 Definition of a Business - Amendments to IFRS 3 1-Jan-20 Definition of Material - Amendments to IAS 1 and IAS 8 1-Jan-20 Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39 and IFRS 7 1-Jan-20

The adoption of the above did not result in any changes to previously reported net profit or equity of the Group.

IBOR Transition

Effective from 1 January 2020, the Group has implemented amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments Disclosures relating to interest rate benchmark reforms. The amendments (referred as Phase I of IBOR transition project) addresses the hedge accounting requirements arising before IBOR and proposed a hedging relief for such hedges.

The Group has applied the hedging relief available under the amendments such as relief on forward looking analysis during the period of uncertainty beyond the year 2021.

At Group level, the notional amount of IBOR related interest rate swaps that have been designated in a hedging relation is QAR 6.6 billion as at 31 December 2020. The Group is in discussion with counterparties in relation to exposure to fair value hedges linked to IBOR maturing beyond the year 2021. Management continues to engage with various stakeholders to support an orderly transition and to mitigate the risks resulting from the transition.

Standards issued but not yet effective

A number of standards and amendments to standards are issued but not yet effective and the Group has not adopted these in the preparation of these consolidated financial statements. The below standards may have an impact on the Group's consolidated financial statements, however, the Group is currently evaluating the impact of these new standards. The Group will adopt these new standards on the respective effective dates.

COVID-19-Related Rent Concessions - Amendment to IFRS 16 (Effective on 1 January 2021)
Interest Rate Benchmark Reform - Phase 2, amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (Effective on 1 January 2021)

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

a) New, amended standards and interpretations (continued)

Standards issued but not yet effective (continued)

Onerous Contracts – Cost of Fulfilling a Contract - Amendments to IAS 37 (Effective on 1 January 2022)
• Property, Plant and Equipment: Proceeds before Intended Use - Amendments to IAS 16 (Effective on 1 January 2022)
Reference to the Conceptual Framework - Amendments to IFRS 3 (Effective on 1 January 2022)
Annual Improvements to IFRS Standards 2018 – 2020 (Effective on 1 January 2022)
Classification of Liabilities as Current or Non-current - Amendments to IAS 1 (Effective on 1 January 2023)
• IFRS 17 – “Insurance Contracts” (Effective on 1 January 2023)

b) Basis of consolidation

The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries (“the Group”) as at 31 December 2020. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

Power over the investee
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of income and consolidated statement of other comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of Other Comprehensive Income (“OCI”) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. These consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

c) Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

c) Business combinations and goodwill (continued)

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument is measured at fair value with the changes in fair value recognised in the income statement.

Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests) and any previous interest held over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in income statement.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

d) Associates

Associates are entities over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but not control or joint control over those policies.

Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost including transaction costs directly related to acquisition of investment in associate.

The Group’s share of its associate’s post-acquisition profits or losses is recognised in the consolidated income statement; its share of post-acquisition movements in equity is recognised in reserves. The cumulative postacquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Intergroup gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Intergroup losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The Group’s share of the results of associates is based on financial statements and adjusted to conform to the accounting policies of the Group. Intergroup gains on transactions are eliminated to the extent of the Group’s interest in the investee. Intergroup losses are also eliminated unless the transaction provides evidence of impairment in the asset transferred.

The consolidated financial statements of the Group include the associate stated below:

Company name Country of incorporation and operation Doha Brokerage and Financial Services Limited India	Ownership interest Principal % activity 2020 2019 44.02% 44.02% Brokerage and asset management

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

e) Foreign currency

Foreign currency transactions and balances

Foreign currency transactions that are transactions denominated, or that require settlement in a foreign currency are translated into the respective functional currencies of the operations at the spot exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the spot exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated into the functional currency at the spot exchange rate at the date that the fair value was determined. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Foreign currency differences resulting from the settlement of foreign currency transactions and arising on translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in income statement.

f) Foreign operations

The results and financial position of all the Group’s entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each statement of financial position presented are translated at the closing rate at the reporting date;
income and expenses for each income statement are translated at average exchange rates; and
all resulting exchange differences are recognised in other comprehensive income.

Exchange differences arising from the above process are reported in shareholders’ equity as ‘foreign currency translation reserve’.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to ‘Other comprehensive income’. When a foreign operation is disposed of, or partially disposed of, such exchange differences are recognised in the consolidated income statement as part of the gain or loss on sale.

g) Financial assets and financial liabilities

i) Recognition and initial measurement

All financial assets and liabilities are initially recognised on the trade date, i.e., the date that the Group becomes a party to the contractual provisions of the instrument. This includes “regular way trades”: purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place.

A financial asset or financial liability is measured initially at fair value plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue.

ii) Classification

Financial assets

On initial recognition, a financial asset is classified as measured at: amortised cost, FVOCI or FVTPL.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)
g) Financial assets and financial liabilities (continued)
ii) Classification (continued)

Financial assets (continued)

A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated as at FVTPL:

The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis.

All other financial assets are classified as measured at FVTPL.

In addition, on initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Business model assessment

The Group makes an assessment of the objective of a business model in which an asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

The stated policies and objectives for the portfolio and the operation of those policies in practice.
How the performance of the portfolio is evaluated and reported to the Group’s management;
The risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
How managers of the business are compensated (e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected); and
the frequency, volume and timing of sales in prior periods, the reasons for such sales and its expectations about future sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of how the Group’s stated objective for managing the financial assets is achieved and how cash flows are realised.

Financial assets that are held for trading or managed and whose performance is evaluated on a fair value basis are measured at FVTPL because they are neither held to collect contractual cash flows nor held both to collect contractual cash flows and to sell financial assets.

Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest (“the SPPI test”), the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making the assessment, the Group considers contingent events that would change the amount and timing of cash flows, prepayment and extension terms, terms that limit the Group's claim to cash flows from specified assets and features that modify consideration of the time value of money. Instruments failing SPPI will be measured at FVTPL.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

g) Financial assets and financial liabilities (continued)

ii) Classification (continued)

Reclassifications

Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets. The reclassification takes place from the start of the first reporting period following the change.

Financial liabilities

The Group has classified and measured its financial liabilities at amortised cost.

iii) Derecognition

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all the risks and rewards of ownership and it does not retain control of the financial asset. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a separate asset or liability in the statement of financial position. On derecognition of a financial asset, the difference between the carrying amount of the asset and consideration received including any new asset obtained less any new liability assumed is recognised in profit or loss.

Any cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVOCI is not recognised in the consolidated income statement on derecognition of such securities.

The Group enters into transactions whereby it transfers assets recognised on its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. If all or substantially all risks and rewards are retained, then the transferred assets are not derecognised. Transfers of assets with retention of all or substantially all risks and rewards include, for example, securities lending and repurchase transactions.

In transactions in which the Group neither retains nor transfers substantially all the risks and rewards of ownership of a financial asset and it retains control over the asset, the Group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset. The transferred asset is derecognised if it meets the derecognition criteria. An asset or liability is recognised for the servicing contract, depending on whether the servicing fee is more than adequate (asset) or is less than adequate (liability) for performing the servicing.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.

iv) Modification of financial assets and liabilities

Financial assets

If the terms of a financial asset are modified, the Group evaluates whether the cash flows of the modified asset are substantially different. If the cash flows are substantially different, then the contractual rights to cash flows from the original financial asset are deemed to have expired. In this case, the original financial asset is derecognised and a new financial asset is recognised at fair value, and recalculates a new effective interest rate for the asset. The date of renegotiation is consequently considered to be the date of initial recognition for impairment calculation purpose, including for the purpose of determining whether a significant increase in credit risk has occurred.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

g) Financial assets and financial liabilities (continued)

iv) Modification of financial assets and liabilities

Financial assets (continued)

If the cash flows of the modified asset carried at amortised cost are not substantially different, then the modification does not result in derecognition of the financial asset. In this case, the Group recalculates the gross carrying amount of the financial asset based on the revised cash flows of the financial assets and recognises the amount arising from adjusting the gross carrying amount as a modification gain or loss in the consolidated income statement. If such a modification is carried out because of financial difficulties of the borrower, then the gain or loss is presented together with impairment losses. In other cases, it is presented as interest income.

Financial liabilities

The Group derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in the consolidated income statement.

v) Offsetting

Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Group has a currently enforceable legal right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

vi) Measurement principles

Amortised cost measurement

The amortised cost of a financial asset or liability is the amount at which the financial asset or liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initial amount recognised and the maturity amount, minus any reduction for impairment loss. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees that are integral part of the effective interest rate.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability

The fair value for financial instruments traded in active markets at the reporting date is based on their quoted market price or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs.

For the financial instruments that are not traded in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques include the discounted cash flow method, comparison with similar instruments for which market observable prices exist, options pricing models, credit models and other relevant valuation models.

The fair value of investments in mutual funds and portfolios whose units are unlisted are measured at the net asset value provided by the fund manager.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)
g) Financial assets and financial liabilities (continued)
vi) Measurement principles (continued)

Fair value measurement (continued)

The foreign currency forward contracts are measured based on observable spot exchange rates, the yield curves of the respective currencies as well as the currency basis spreads between the respective currencies. All contracts are fully cash collateralised, thereby eliminating both counterparty and the Group’s own credit risk.

The fair value of unquoted derivatives is determined by discounted cash flows. For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained in note 5.

vii) Identification and measurement of impairment

The Group recognises loss allowances for expected credit losses (ECL) on the following financial instruments that are not measured at FVTPL:

Financial assets that are debt instruments; and
Loan commitments and financial guarantee contracts.

No impairment loss is recognised on equity investments.

The Group measures loss allowances at an amount equal to lifetime ECL, except for the following, for which they are measured as 12-month ECL:

debt investment securities that are determined to have low credit risk at the reporting date; and
• other financial instruments on which credit risk has not increased significantly since their initial recognition

12-month ECL are the portion of ECL that result from default events on financial instruments that are possible with the 12 months after the reporting date.

Measurement of ECL

ECL are a probability-weighted estimate of credit losses. They are measured as follows:

Financial assets that are not credit-impaired at the reporting date: as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive);
Financial assets that are credit-impaired at the reporting date: as the difference between the gross carrying amount and the present value of estimated future cash flows;
Undrawn loan commitments: as the present value of the difference between the contractual cash flows that are due to the Group if the commitment is drawn down and the cash flows that the Group expects to receive; and
Financial guarantee contracts: the expected payments to reimburse the holder less any amounts that the Group expects to recover.

Restructured financial assets

If the terms of a financial asset are renegotiated or modified or an existing financial asset is replaced with a new one due to financial difficulties of the borrower, then an assessment is made of whether the financial asset should be derecognised and ECL are measured as follows.

If the expected restructuring will not result in derecognition of the existing asset, then the expected cash flows arising from the modified financial asset are included in calculating the cash shortfalls from the existing asset.
If the expected restructuring will result in derecognition of the existing asset, then the expected fair value of the new asset is treated as the final cash flow from the existing financial asset at the time of its derecognition. This amount is included in calculating the cash shortfalls from the existing financial asset that are discounted from the expected date of derecognition to the reporting date using the original effective interest rate of the existing financial asset.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

g) Financial assets and financial liabilities (continued)

vii) Identification and measurement of impairment (continued)

Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt financial assets carried at FVOCI are credit impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

Significant financial difficulty of the borrower or issuer;
A breach of contract such as a default or past due event;
The restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
It is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
The disappearance of an active market for a security because of financial difficulties.

h) Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, unrestricted balances held with central banks and highly liquid financial assets with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments.

Cash and cash equivalents are carried at amortised cost in the consolidated statement of financial position.

i) Due from banks and loans and advances to customers

Due from banks and loans and advances to customers are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and that the Group does not intend to sell immediately or in the near term.

Due from banks and loans and advances to customers are initially measured at the transaction price which is the fair value plus incremental direct transaction costs, and subsequently measured at their amortised cost using the effective interest method, except for the financial assets which are classified to be measured at FVTPL.

Write-off of loans and advances to customers

Loans and advances to customers (and the related impairment allowance accounts) are normally written off, either partially or in full, when there is no realistic prospect of recovery. Where loans are secured, this is generally after receipt of any proceeds from the realisation of security. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier. All write-offs of loans and advances to customers are recorded after obtaining approvals from the QCB for such write-offs.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

j) Investment securities

The 'investment securities' include:

Debt investment securities measured at amortised cost. These are initially measured at fair value plus incremental direct transaction costs, and subsequently at their amortised cost using the effective interest method;
Debt and equity investment securities mandatorily measured at FVTPL or designated as at FVTPL. These are measured at fair value with changes recognised immediately in profit or loss;
Debt securities measured at FVOCI; and
Equity investment securities designated as at FVOCI.

For debt securities measured at FVOCI, gains and losses are recognised in OCI, except for the following, which are recognised in profit or loss in the same manner as for financial assets measured at amortised cost:

Interest income using the effective interest method;
Expected credit losses and reversals; and
Foreign exchange gains and losses.

When a debt security measured at FVOCI is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to consolidated income statement.

The Group elects to present in OCI changes in the fair value of certain investments in equity instruments that are not held for trading. The election is made on an instrument by instrument basis on initial recognition and is irrevocable. Gains and losses on such equity instruments are never subsequently reclassified to consolidated income statement, including on disposal. Impairment losses (and reversal of impairment losses) are not reported separately from other changes in fair value. Dividends, when representing a return on such investments, continue to be recognised in consolidated income statement, unless they clearly represent a recovery of part of the cost of the investment, in which case they are recognised in OCI. Cumulative gains and losses recognised in OCI are transferred to retained earnings on disposal of an investment.

k) Derivatives

Derivatives held for risk management purposes and hedge accounting

Derivatives held for risk management purposes include all derivative assets and liabilities that are not classified as trading assets or liabilities. Derivatives held for risk management purposes are measured at fair value on the consolidated statement of financial position. The Group designates certain derivatives held for risk management as well as certain non-derivative financial instruments as hedging instruments in qualifying hedging relationships. On initial designation of the hedge, the Group formally documents the relationship between the hedging derivative instruments and hedged items, including the risk management objective and strategy in undertaking the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, as to whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair value or cash flows of the respective hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125 percent. The Group makes an assessment for a cash flow hedge of a forecast transaction, as to whether the forecast transaction is highly probable to occur and presents an exposure to variations in cash flows that could ultimately affect profit or loss. These hedging relationships are discussed below.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

Hedge Accounting

The general hedge accounting requirements of IFRS 9 retain the three types of hedge accounting mechanisms in IAS 39. However, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify as hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled and replaced with the principle of an ‘economic relationship’. Retrospective assessment of hedge effectiveness is no longer required. The Group has also elected to continue to apply the hedge accounting requirements of IAS 39 on adoption of IFRS 9.

Fair value hedges

When a derivative is designated as the hedging instrument in a hedge of the change in fair value of a recognised asset or liability or a firm commitment that could affect profit or loss, changes in the fair value of the derivative are recognised immediately in consolidated income statement together with changes in the fair value of the hedged item that are attributable to the hedged risk. If the hedging derivative expires or is sold, terminated, or exercised, or the hedge no longer meets the criteria for fair value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. Any adjustment up to that point to a hedged item, for which the effective interest method is used, is amortised to consolidated income statement as part of the recalculated effective interest rate of the item over its remaining life.

Other non-trading derivatives

When a derivative is not held for trading, and is not designated in a qualifying hedge relationship, all changes in its fair value are recognised immediately in consolidated income statement.

Derivatives held for trading purposes

The Group’s derivative trading instruments includes forward foreign exchange contracts. The Group sells these derivatives to customers in order to enable them to transfer, modify or reduce current and future risks. These derivative instruments are fair valued as at the end of reporting date and the corresponding fair value changes is taken to the consolidated income statement.

l) Property and equipment

Recognition and measurement

Items of property and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of selfconstructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located and capitalised borrowing costs.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property or equipment have different useful lives, they are accounted for as separate items of property and equipment.

The gain or loss on disposal of an item of property and equipment is determined by comparing the proceeds from disposal with the carrying amount of the item of property and equipment, and is recognised in other income/other expenses in profit or loss.

Subsequent costs

The cost of replacing a component of an item of property or equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property and equipment are recognised in profit or loss as incurred.

Depreciation

Depreciable amount is the cost of property and equipment, or other amount substituted for cost, less its residual value.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

l) Property and equipment (continued)

Depreciation (continued)

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property and equipment since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset and is based on cost of the asset less its estimated residual value. Land and capital work-in-progress are not depreciated.

The estimated useful lives for the current and comparative years are as follows:

Buildings 20 - 30 years Leasehold improvements, furniture and equipment 3 - 10 years Vehicles 5 - 8 years

Depreciation methods, useful lives and residual values are re-assessed at each reporting date and adjusted prospectively, if appropriate.

m) Impairment of non-financial assets

The carrying amounts of the Group’s non-financial assets, other than deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

n) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

o) Onerous contracts

A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.

p) Financial guarantees

Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial institutions and other bodies on behalf of customers to secure loans, overdrafts and other banking facilities.

Financial guarantees are initially recognised in the financial statements at fair value on the date that the guarantee was given, being the premium received. Subsequent to initial recognition, the Group’s liabilities under such guarantees are measured at the higher of the initial measurement, less amortisation calculated to recognise in the statement of income any fee income earned over the period, and the best estimate of the expenditure required settling any financial obligation arising as a result of the guarantees at the reporting date.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

q) Employee benefits

The Group provides for end of service benefits in accordance with the employment policies of the Group. The provision is calculated on the basis of the individual’s final salary and period of service at the reporting date. This provision is included in other provisions within other liabilities.

With respect to Qatari and other GCC employees, the Group makes a contribution to the Qatari Pension Fund calculated on a percentage of the employees’ salaries, in accordance with the Retirement and Pension Law No. 24 of 2002. The Group’s obligations are limited to these contributions.

r) Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

s) Share capital and reserves

i) Share issue costs

Incremental costs directly attributable to the issue of an equity instrument are deducted from the initial measurement of the equity instruments.

ii) Dividends on ordinary shares

Dividends on ordinary shares are recognised in equity in the period in which they are approved by the Group’s shareholders. Dividends for the year that are declared after the date of the consolidated statement of financial position are dealt with in the subsequent events note.

t) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Interest income and expense

For all financial instruments measured at amortised cost and interest bearing financial assets classified as available -for-sale and fair value through profit or loss, interest income or expense is recorded using the effective interest rate, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or a short period, where appropriate, to the net carrying amount of the financial assets or financial liabilities.

For the financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the expected credit loss provision). If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

Interest income on investment (debt) securities measured at FVOCI and measured at amortised cost is calculated using effective interest rate method and is also included in interest income.

Premium on insurance

Premium on insurance contracts are recognized as revenue (earned premiums) proportionately over the period of coverage. The portion of premium received on in-force contracts that relates to unexpired risks at the reporting date is reported as unearned premium liability on a 1/365 days basis.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

t) Revenue recognition (continued)

Fees and commission income and expense

Fees and commission income and expense that are integral to the effective interest rate of a financial asset or liability are included in the measurement of the effective interest rate.

Other fee and commission income, including account servicing fees, investment management fees, sales commission, placement fees and syndication fees, are recognised over time as the related services are performed. When a loan commitment is not expected to result in the draw-down of a loan, the related loan commitment fees are recognised over time on a straight-line basis over the commitment period. In case of these services, the control is considered to be transferred over time as the customer is benefited from these services over the tenure of the service period. Other fee and commission expense relate mainly to transaction and service fees, which are expensed as the services are received.

Income from investment securities

Gains or losses on the sale of investment securities are recognised in profit or loss as the difference between fair value of the consideration received and carrying amount of the investment securities.

Income from held to maturity investment securities is recognised based on the effective interest rate method.

Dividend income

Dividend income is recognised when the right to receive income is established.

u) Tax expense

Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Taxes are calculated based on applicable tax laws or regulations in the countries in which the Group operates. The provision for deferred taxation is made based on the evaluation of the expected tax liability. Currently there is no corporate tax applicable to the Bank in the State of Qatar. However, corporate tax is applicable on foreign branches operating outside the State of Qatar and to one subsidiary in the Qatar Financial Center.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;
temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future; and
temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

u) Tax expense (continued)

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities against current tax assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

v) Earnings per share

The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

w) Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components, whose operating results are reviewed regularly by the chief operating decision maker to make decisions about resources allocated to each segment and assess its performance, and for which discrete financial information is available.

x) Fiduciary activities

Assets held in a fiduciary capacity are not treated as assets of the Group and accordingly are not part of the consolidated statement of financial position.

y) Repossessed collateral

Repossessed collateral against settlement of customer debts are stated within the consolidated statement of financial position under "Other assets" at their acquired value net of allowance for impairment and allowance for depreciation.

According to QCB instructions, the Group should dispose of any land and properties acquired against settlement of debts within a period not exceeding three years from the date of acquisition although this period can be extended after obtaining approval from QCB.

z) Comparatives

Except when a standard or an interpretation permits or requires otherwise, all amounts are reported or disclosed with comparative information.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

3 Significant accounting policies (continued)

aa) Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease based on if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group has decided to separate the lease and non-lease component in the underlying contracts based on their relative standalone prices.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-ofuse asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any prepaid and accrued lease expenses. The right-of-use asset is subsequently depreciated using the straightline method over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. In addition, the right of-use asset is periodically reduced by impairment losses, if any, and is adjusted for extension in lease terms or cancellation of the leases.

The lease liability is initially measured at the present value of the lease payments which are discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate, which is based on the weighted average rate applied in the Group's principal markets adjusted for the nature of the asset, lease term, security and any other relevant assumptions. The lease liability is subsequently measured at amortised cost using the effective interest method. The finance cost incurred related to the lease liabilities is included in the 'interest expense' in the consolidated income statement.

The Group presents right-of-use assets in ‘property and equipment’ and lease liabilities in ‘other liabilities’ in the consolidated statement of financial position. The deferred tax impact, if any, is recognized in accordance with the relevant tax regulations and is accounted under IAS 12.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

4 Financial risk management

a) Introduction and overview

Risk is inherent in the Group’s activities but it is managed through a process of ongoing identification, measurement and monitoring subject to risk limits and other controls. The key risks Group is exposed are to credit risk, liquidity risk, operational risk and market risk, which includes trading and non-trading risks. The independent risk control process does not include business risks such as changes in the environment, technology and industry. They are monitored through the Group’s strategic planning process.

The Board of Directors is ultimately responsible for identifying and controlling risks; however, there are separate independent bodies such as the risk management department, internal audit committee, the credit committee, assets and liabilities committee responsible for managing and monitoring those risks.

Monitoring and controlling risks are primarily performed based on limits established by the Group. These limits reflect the business strategy and market environment of the Group as well as the level of risk that the Group is willing to accept.

As part of its overall risk management, the Group also uses derivatives and other instruments to manage exposures resulting from changes in interest rates, foreign currencies, equity risks, credit risks, and exposures arising from forecast transactions. The risk profile is assessed before entering into hedge transactions, which are authorized by the appropriate level of authority within the Group.

The Group applies an internal methodology to estimate the market risk of positions held and the maximum losses expected, based upon a number of assumptions for various changes in market conditions. The Group has a set of limits of risks that may be accepted, which are monitored on a daily basis.

There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk.

The risks arising from financial instruments to which the Group is exposed are financial risks, which include credit risk, liquidity risk, market risks and operational risk.

b) Credit risk

Credit risk is the risk that the Group will incur a loss because its customers or counterparties fail to discharge their contractual obligations in accordance with the agreed terms. Credit risk makes up the largest part of the Group’s risk exposure; therefore, the Group carefully manages its exposure to credit risk. Credit risk is attributed to financial instruments such as balance with central banks, due from banks, loans and advances to customers, debt securities and other bills, certain other assets and credit equivalent amounts related to offbalance sheet financial instruments.

Note 10 to the consolidated financial statements disclose the distribution of the loans and advances to customers by economic sectors. Note 4 (b) (iii) to the consolidated financial statements disclose the geographical distribution of the Group’s credit exposure.

i)

Credit risk measurement

All credit policies are reviewed and approved by the Risk Management Department and the Board of Directors. The Risk Management team centrally approves all significant credit facilities and limits for all corporate, treasury and capital markets, financial institutions and SME clients of the Group. Such approvals are carried out in pursuance to a set of delegated Credit authority limits and in accordance with the Group’s approved credit policy.

Furthermore, all credit facilities are independently administered and monitored by the Credit Control Department.

The Group further limits risk through diversification of its assets by geography and industry sectors. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee annually. The Group also follows the guidelines issued by Qatar Central Bank with regard to the granting of loans which limits exposure to counterparties.

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

i) Credit risk measurement (continued)

The amount and type of collateral required depend on an assessment of the credit risk of the counterparty. Guidelines are implemented regarding the acceptability of types of collateral and valuation parameters.

Whenever possible, loans are secured by acceptable forms of collateral in order to mitigate credit risk. The amount and type of collateral required depend on an assessment of the credit risk of the counterparty. Guidelines are implemented regarding the acceptability of types of collateral and valuation parameters. The main types of collateral obtained are cash, mortgages, local and international equities, financial guarantees and other tangible securities. The collaterals are held mainly against commercial and consumer loans and are managed against relevant exposures at their net realizable values.

The Group has a credit administration process that ensures compliance with terms of approval, documentation and continuous review to ensure quality of credit and collaterals. While securities such as listed equities are valued regularly, credit policy mandates securities obtained by way of legal mortgage over real estate to be valued at least once in 3 years or more frequently if situation warrants.

ii) Analysis of maximum exposure to credit risk before taking account of collateral held or other credit enhancements, net of impairment

The table below represents credit risk exposure to the Group, without taking account of any collateral held or other credit enhancements attached. For assets recorded on the statement of financial position, the exposures set out below are based on the net carrying amounts as reported in the consolidated statement of financial position.

Credit risk exposures relating to assets recorded on the statement of financial position are as follows: Balances with central banks Due from banks Loans and advances to customers Investment securities – debt Other assets Total as at 31 December Other credit risk exposures (gross of impairment) are as follows: Guarantees Letters of credit Unutilised credit facilities Total as at 31 December	2020 5,594,258 3,673,577 65,450,036 24,161,021 1,807,206 100,686,098 12,392,098 3,670,942 1,093,753 17,156,793 117,842,891	2019 5,331,026 7,756,944 65,784,258 25,943,856 1,213,696
		106,029,780
		12,896,949 4,679,118 1,737,863
		19,313,930
		125,343,710

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

iii) Analysis of concentration of risks of financial assets with credit risk exposure

Geographical sectors

The following table breaks down the Group’s credit exposure based on carrying amounts without taking into account any collateral held or other credit support, as categorized by geographical region. The Group has allocated exposures to regions based on the country of domicile of its counterparties.

Balances with central banks Due from banks Loans and advances to customers Investment securities - debt Other assets Balances with central banks Due from banks Loans and advances to customers Investment securities - debt Other assets Guarantees Letters of credit Unutilised credit facilities Guarantees Letters of credit Unutilised credit facilities	Qatar 4,374,226 1,054,407 56,138,705 21,710,412 1,747,419 85,025,169 Qatar 3,044,982 1,596,929 51,739,728 23,353,201 1,144,361 80,879,201 Qatar 6,786,241 3,032,973 875,877 10,695,091 Qatar 6,788,764 3,924,787 1,363,043 12,076,594	Other GCC 1,170,483 842,202 5,858,315 1,497,081 5,948 9,374,029 Other GCC 2,230,318 640,889 9,569,457 1,608,705 6,416 14,055,785 Other GCC 2,273,281 68,859 169,037 2,511,177 Other GCC 2,482,822 75,442 295,301 2,853,565	Other Middle East 403,767 274,858 269,726 948,351 Other Middle East - 1,120,148 925,668 302,007 - 2,347,823 Other Middle East 146,519 41,625 - 188,144 Other Middle East 154,820 149,350 - 304,170	Rest of the World 49,549 1,373,201 3,178,158 683,802 53,839 5,338,549 Rest of the World 55,726 4,398,978 3,549,405 679,943 62,919 8,746,971 Rest of the World 3,186,057 527,485 48,839 3,762,381 Rest of the World 3,470,543 529,539 79,519 4,079,601	2020 Total 5,594,258 3,673,577 65,450,036 24,161,021 1,807,206
					100,686,098
					2019 Total 5,331,026 7,756,944 65,784,258 25,943,856 1,213,696
					106,029,780
					2020 Total 12,392,098 3,670,942 1,093,753
					17,156,793
					2019 Total 12,896,949 4,679,118 1,737,863
					19,313,930

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

iii) Analysis of concentration of risks of financial assets with credit risk exposure (continued)

Industry sectors

The following table breaks down the Group’s credit exposure based on the carrying amounts, before taking into account collateral held or other credit enhancements, as categorized by the industry sectors of the Group’s counterparties.

Funded and unfunded Government and related agencies Industry Commercial Services Contracting Real estate Personal Others Guarantees Letters of credit Unutilised credit facilities	2020 38,329,779 925,474 10,599,716 17,424,616 5,223,118 18,253,031 7,389,271 2,541,093 12,392,098 3,670,942 1,093,753 117,842,891	2019 34,400,874 683,489 11,952,111 22,830,029 9,318,310 16,845,058 7,758,749 2,241,160 12,896,949 4,679,118 1,737,863
		125,343,710

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

iv) Credit quality

The credit quality of financial assets is managed by the Group using internal and external credit risk ratings. The Group follows an internal risk rating mechanism linked to credit ratings published by international rating agencies. The Group endeavors continuously to improve upon the internal credit risk rating methodologies and credit risk management policies and practices to reflect the true underlying credit risk of the portfolio and the credit culture in the Group. All lending relationships are reviewed at least once in a year and more frequently in the case of non-performing assets.

The following table sets out information about the credit quality of financial assets, commitments and financial guarantees.

*Cash and Balances with Central* *Banks (excluding Cash on Hand) and* *Due from Banks* Investment grade – Aaa to Baa3 Sub-investment grade – Ba1 to Ca3 Substandard Doubtful Loss Loss allowance Carrying amount	2020 Stage 1 Stage 2 Stage 3 Total 8,328,524 - - 8,328,524 328,083 613,243 - 941,326 - - - - - - - - - - - - - (1,704) (310) - (2,014) 8,654,903 612,933 - 9,267,836
Cash and Balances with Central Banks (excluding Cash on Hand) and Due from Banks Investment grade – Aaa to Baa3 Sub-investment grade – Ba1 to Ca3 Substandard Doubtful Loss Loss allowance Carrying amount	2019 Stage1 Stage2 Stage 3 Total 11,595,300 - - 11,595,300 883,146 618,042 - 1,501,188 - - - - - - - - - - - - (7,909) (609) - (8,518) 12,470,537 617,433 -13,087,970

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

iv) Credit quality (continued)

*Loans and Advances to Customers* Investment grade – Aaa to Baa3 Sub-investment grade – Ba1 to Ca3 Substandard Doubtful Loss Loss allowance Carrying amount		2020 Stage 1 Stage 2 Stage 3 Total 24,794,926 1,319,852 - 26,114,778 20,542,188 18,026,279 - 38,568,467 - - 1,426,981 1,426,981 - - 909,172 909,172 - - 1,778,446 1,778,446 (138,241) (988,162) (2,221,405) (3,347,808) 45,198,873 18,357,969 1,893,194 65,450,036
Loans and Advances to Customers Investment grade – Aaa to Baa3 Sub-investment grade – Ba1 to Ca3 Substandard Doubtful Loss Loss allowance Carrying amount		2019 Stage1 Stage2 Stage 3 Total 24,952,174 1,633,901 - 26,586,075 22,538,251 17,667,068 - 40,205,319 - - 1,020,876 1,020,876 - - 830,465 830,465 - - 2,271,094 2,271,094 (144,711) (1,425,438) (3,559,422) (5,129,571) 47,345,714 17,875,531 563,013 65,784,258
*Investment Securities – debt* Investment grade – Aaa to Baa3 Sub-investment grade – Ba1 to Ca3 Substandard Doubtful Loss Loss allowance Carrying amount Investment Securities – debt Investment grade – Aaa to Baa3 Sub-investment grade – Ba1 to Ca3 Substandard Doubtful Loss Loss allowance Carrying amount		2020 Stage 1 Stage 2 Stage 3 Total 22,873,793 - - 22,873,793 944,427 332,799 - 1,277,226 - - - - - - - - - - 16,922 16,922 - (446) - (6,474) (6,920) 23,817,774 332,799 10,448 24,161,021 2019 Stage1 Stage2 Stage 3 Total 24,752,620 - - 24,752,620 936,514 242,374 - 1,178,888 - - - - - - - - - - 37,735 37,735 (355) - (25,032) (25,387) 25,688,779 242,374 12,703 25,943,856

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020 4 Financial risk management (continued)

QAR ‘000s

b) Credit risk (continued)

iv) Credit quality (continued)

Loan commitments and financial
guarantees
Investment grade – Aaa to Baa3
Sub-investment grade – Ba1 to Ca3
Substandard
Doubtful
Loss
Loss allowance
Carrying amount
Loan commitments and financial
guarantees
Investment grade – Aaa to Baa3
Sub-investment grade – Ba1 to Ca3
Substandard
Doubtful
Loss
Loss allowance
Carrying amount

2020
Stage 1
Stage 2
Stage 3
Total
8,550,224
613,017
-
9,163,241
3,625,701
3,661,627
-
7,287,328
-
-
706,224
706,224
-
-
-
-
-
-
-
-
-
(15,125)
(22,226) (221,678)
(259,029)
12,160,800
4,252,418
484,546 16,897,764
2019
Stage1
Stage2
Stage 3
Total
10,222,225
546,945
- 10,769,170
3,860,568
4,423,187
-
8,283,755
-
-
261,005
261,005
-
-
-
-
-
-
-
-
(17,595)
(101,148) (125,543)
(244,286)
14,065,198
4,868,984
135,462 19,069,644

Collateral

The Group obtains collateral and other credit enhancements in the ordinary course of business from counterparties. On an overall basis, during the year there was no discernible deterioration in the quality of collateral held by the Group. In addition, there were no changes in collateral policies of the Group.

The fair value of the collateral held against credit-impaired loans and advances as at 31 December 2020 is QAR xxxx million (2019: QAR xxxx million).

The aggregate collateral in respect to the loans and advances to customers are QAR xxxxx million as of 31 December 2020 (2019: QAR xxxxx million).

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4. Financial risk management (continued)

b) Credit risk (continued)

Repossessed collateral

The Group’s acquired properties held as collateral in settlement of debt has a carrying value of QAR 102 million as at 31 December 2020 (2019: QAR 134 million).

Write-off policy

The Group writes off a loan or an investment debt security balance, and any related allowances for impairment losses, when Group Credit determines that the loan or security is uncollectible and after QCB approval.

This determination is made after considering information such as the occurrence of significant changes in the borrower’s/issuer’s financial position such that the borrower/issuer can no longer pay the obligation, or that proceeds from collateral will not be sufficient to pay back the entire exposure. For smaller balance standardized loans, write-off decisions are generally based on a product-specific past due status. The amount written off on loans and advances during the year was QAR 3,978 million (2019: QAR 1,680 million). Subsequent recoveries from such write offs are recognized on a cash basis.

v) Inputs, assumptions and techniques used for estimating impairment

Significant increase in credit risk

When determining whether the risk of default on a financial instrument has increased significantly since initial recognition, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis including internal credit risk grading system, external risk ratings, where available, delinquency status of accounts, credit judgement and, where possible, relevant historical experience. The Group may also determine that an exposure has undergone a significant increase in credit risk based on particular qualitative indicators that it considers are indicative of such and whose effect may not otherwise be fully reflected in its quantitative analysis on a timely basis.

In determining whether credit risk has increased significantly since initial recognition following criteria's are considered:

i. Two notches downgrade for ratings from Aaa to Baa or one notch downgrade for ratings from Ba to Caa ii. Facilities restructured during previous twelve months
iii. Facilities overdue by 60 and 30 days as at the reporting date for corporate and retail loans respectively

The Bank continues to assess borrowers for other indicators of unlikeliness to pay, taking into consideration the underlying cause of any financial difficulty and whether it is likely to be temporary as a result of Covid-19 or longer term.

In response to the QCB support program the Bank has initiated a programme of payment relief for its impacted customers by deferring installments. These payment reliefs are considered as short-term liquidity to address borrower cash flow issues. The relief offered to customers may indicate a SICR. However, the extension of these payment reliefs do not automatically trigger a SICR and a stage migration for the purposes of calculating ECL, as these are being made available to assist borrowers affected by the Covid-19 outbreak to resume regular payments.

The assessment of SICR and the calculation of ECL both incorporate forward-looking information. The Bank has performed historical correlation analysis and identified the key economic variables impacting credit risk and expected credit losses for each portfolio. These economic variable were tested for both direction of association and level of association with the Bank’s own portfolio and market level default rates.

Credit risk grades

Credit risk grades are defined using qualitative and quantitative factors that are indicative of risk of default. These factors vary depending on the nature of the exposure and the type of borrower. Exposures are subject to on-going monitoring, which may result in an exposure being moved to a different credit risk grade.

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

v) Inputs, assumptions and techniques used for estimating impairment (continued)

Generating the term structure of Probability of Default (PD)

The Group employs statistical models to analyse the data collected and generate estimates of PD of exposures and how these are expected to change as a result of the passage of time. This analysis includes the identification and calibration of relationships between changes in default rates and changes in key macroeconomic factors, across various geographies in which the Group has exposures.

Renegotiated financial assets

The contractual terms of a loan may be modified for a number of reasons, including changing market conditions, customer retention and other factors not related to a current or potential credit deterioration of the customer. An existing loan whose terms have been modified may be derecognised and the renegotiated loan recognised as a new loan at fair value. Where possible, the Group seeks to restructure loans rather than to take possession of collateral, if available. This may involve extending the payment arrangements and documenting the agreement of new loan conditions. Management continuously reviews renegotiated loans to ensure that all criteria are met and that future payments are likely to occur.

Definition of default

The Group considers a financial asset to be in default when:

the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or
the borrower is past due more than 90 days on any material credit obligation to the Group; or
the borrower is rated 9 or 10.
In assessing whether a borrower is in default, the Group also considers indicators that are:
quantitative – e.g. overdue status and non-payment on another obligation of the same issuer to the Group; and
based on data developed internally and obtained from external sources.

Inputs into the assessment of whether a financial instrument is in default and their significance may vary over time to reflect changes in circumstances. The definition of default largely aligns with that applied by the Group for regulatory capital purposes.

Incorporation of forward looking information

Incorporating forward looking information increases the level of judgement as to how changes in these macroeconomic factors will affect the Expected Credit Loss (ECL) applicable to the stage 1 and stage 2 exposures which are considered as performing. The methodologies and assumptions involved, including any forecasts of future economic conditions, are reviewed periodically.

These economic variables and their associated impact on the PD, EAD and LGD vary by financial instrument. Forecasts of these economic variables (the “base economic scenario”) are updated from the World economic outlook: IMF country data and economic forecast periodically published by Economic Intelligence Unit, which provide the best estimate view of the economy and commodity prices over the coming one to five years. The Bank also considers internal forecasts based on time series analysis for variables for which forecasts are not available. The macro-economic variable forecasts till remaining lifetime of the exposures post five years is obtained through time series analysis i.e. moving average/ mean reversion as applicable. The impact of these economic variables on the PD is obtained by using the merton-vasicek structural model for all the portfolio. Correlation analysis has been performed for selection of the key macro-economic variables based on the observed portfolio default rate.

The Group has performed an assessment of COVID-19 in light of the available guidance of the IFRS and QCB which has resulted in the changes to the expected credit loss methodology and judgements as at and for the year ended 31 December 2020.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

v) Inputs, assumptions and techniques used for estimating impairment (continued)

Incorporation of forward looking information (continued)

The Bank has considered the effect the probable uncertainties due the pandemic through the stressed scenario construction and weights. The Bank has used latest economic forecasts published in October 2020, which includes the impact of economic contraction due to the pandemic. Hence, further stress on the Base scenario for including the effects of pandemic has not been considered. The cumulative probability of all the plausible downturn scenario considering the Base forecast as the starting point has been considered as the probability weight of the stressed scenario to address worries of economic downturn due the pandemic.

The Bank has also given specific consideration to the relevant impact of COVID-19 on the qualitative and quantitative factors when determining the significant increase in credit risk and assessing the indicators of impairment for the exposures in potentially affected sectors. This has resulted in staging downgrade of certain exposures and recognition of relevant ECLs and impairment allowances.

In addition to the base economic scenario, the Bank’s Credit risk team also provide other possible scenarios along with scenario weightings. The number of other scenarios used is set based on the analysis of each major product type to ensure plausible events are captured. The number of scenarios and their attributes are reassessed at each reporting date. At 1 January 2020 and 31 December 2020, for all portfolios the Bank concluded that three scenarios that appropriately captured the uncertainties in the macro-economic forecasts i.e. Base scenario: considering the published macro-economic forecasts, improved scenario and stressed scenario: considering the long term observed volatility in macro-economic forecast. The scenario weightings are determined by a combination of statistical analysis and expert credit judgement, taking in account the range of possible outcomes each chosen scenario is representative of. The scenario weights considered for the ECL calculation as of 31 December 2020 are Base Scenario: 65%, Improved Scenario: 10% and Stressed Scenario: 25% (2019: Base Scenario: 70%, Improved Scenario: 15% and Stressed Scenario: 15%). The assessment of SICR is performed based on credit risk assessment following QCB rule and management assessment under each of the base, and the other scenarios, multiplied by the associated scenario weightings. This determines whether the whole financial instrument is in Stage 1, Stage 2, or Stage 3 and hence whether 12-month or lifetime ECL should be recorded. Following this assessment, the Bank measures ECL as either a 12-month ECL (Stage 1), or lifetime ECL (Stages 2). These ECLs are determined by running each scenario through the relevant ECL model and multiplying it by the appropriate scenario weighting.

As with any economic forecasts, the likelihoods of the Base forecast are subject to a high degree of inherent uncertainty and therefore the actual outcomes may be significantly different to those projected. The Bank considers these forecasts to represent its best estimate of the possible outcomes and the scenarios are considered to be capturing the uncertainties in the Base forecast.

Economic variable assumptions

The most significant period-end assumptions used for the ECL estimate as at 31 December 2020 were Oil prices (2021: $45/Barrel, 2022: $53.5/ Barrel) and Private Sector Credit Concentration % (2021: 66.6%, 2022: 65.9%).

Measurement of ECL

The key inputs into the measurement of ECL are the term structure of the following variables:

probability of default (PD);
loss given default (LGD);
exposure at default (EAD).

These parameters are generally derived from internally developed statistical models and other historical data. They are adjusted to reflect forward-looking information as described above.

PD estimates are estimates at a certain date, which are calculated based on statistical rating models. These statistical models are primarily based on internally compiled data comprising both quantitative and qualitative factors and are supplemented by external credit assessment data where available.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

v) Inputs, assumptions and techniques used for estimating impairment (continued)

Measurement of ECL (continued)

LGD is the magnitude of the likely loss if there is a default. The Group estimates LGD parameters based on a consistent rate for unsecured facilities and considers the impact of collateral for secured facilities.

Loss allowance

The following tables show reconciliations from the opening to the closing balance of the loss allowance by class of financial instruments.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

v) Inputs, assumptions and techniques used for estimating impairment (continued)

		2020	2020
	Stage 1	Stage 2	Stage 3	Total
Gross exposures subject to ECL – as at 31 December - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees -Due from banks and balances with central Banks	45,337,114 23,818,220 12,175,925 8,656,607	19,346,131 332,799 4,274,644 613,243	4,114,599 16,922 706,224 -	68,797,844 24,167,941 17,156,793 9,269,850
Opening balance of ECL / impairment - as at 1 January - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees - Due from banks and balances with central Banks Net charge and transfers for the year (net of foreign currency translation) - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees - Due from banks and balances with central Banks Write offs and other - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees - Due from banks and balances with central Banks Closing balance of ECL / impairment - as at 31 December* - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees - Due from banks and balances with central Banks	89,987,866 144,711 9,429 17,595 7,909 179,644 (6,470) (525) (2,470) (6,205) (15,670) - - - - - 138,241 8,904 15,125 1,704 163,974	24,566,817 1,425,438 7,263 101,148 609 1,534,458 (437,276) 35,170 (78,922) (299) (481,327) - - - - - 988,162 42,433 22,226 310 1,053,131	4,837,745 3,559,422 25,032 125,543 - 3,709,997 2,695,986 35 39,830 - 2,735,851 (4,034,003) (18,593) 56,305 - (3,996,291) 2,221,405 6,474 221,678 - 2,449,557	119,392,428 5,129,571 41,724 244,286 8,518
				5,424,099 2,252,240 34,680 (41,562) (6,504)
				2,238,854 (4,034,003) (18,593) 56,305 -
				(3,996,291)
				3,347,808 57,811 259,029 2,014
				3,666,662

stage 3 provision includes interest in suspense

** stage 3 provision includes a net transfer of provision from loans and advances to loan commitments and financial guarantees amounting to QAR 56.3 million (2019: QAR 41.7 million)

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

b) Credit risk (continued)

v) Inputs, assumptions and techniques used for estimating impairment (continued)

		2019
	Stage 1	Stage 2	Stage 3	Total
Gross exposures subject to ECL – as at 31 December - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees -Due from banks and balances with central Banks	47,490,425 25,689,134 14,082,793 12,478,446	19,300,969 242,374 4,970,132 618,042	4,122,435 37,735 261,005 -	70,913,829 25,969,243 19,313,930 13,096,488
Opening balance of ECL / impairment - as at 1 January - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees - Due from banks and balances with central Banks Net charge and transfers for the year (net of foreign currency translation) - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees - Due from banks and balances with central Banks Write offs and other - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees* - Due from banks and balances with central Banks Closing balance of ECL / impairment - as at 31 December - Loans and advances to customers - Investment securities (debt) - Loan commitments and financial guarantees - Due from banks and balances with central Banks	99,740,798 223,709 18,359 27,575 11,886 281,529 (78,998) (8,930) (9,980) (3,977) (101,885) - - - - - 144,711 9,429 17,595 7,909 179,644	25,131,517 1,301,896 793 126,204 392 1,429,285 123,542 6,470 (25,056) 217 105,173 - - - - - 1,425,438 7,263 101,148 609 1,534,458	4,421,175 3,707,819 22,832 8,158 - 3,738,809 1,619,397 2,200 75,645 - 1,697,242 (1,767,794) - 41,740 - (1,726,054) 3,559,422 25,032 125,543 - 3,709,997	129,293,490 5,233,424 41,984 161,937 12,278
				5,449,623 1,663,941 (260) 40,609 (3,760)
				1,700,530 (1,767,794) - 41,740 -
				(1,726,054)
				5,129,571 41,724 244,286 8,518
				5,424,099

stage 3 provision includes interest in suspense

** stage 3 provision includes a transfer of provision from loans and advances to loan commitments and financial guarantees

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

c) Liquidity risk

Liquidity risk is the risk that an institution will be unable to meet its net funding requirements. Liquidity risk can be caused by market disruptions or credit downgrades, which may cause certain sources of funding to cease immediately. Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. To mitigate this risk, the Group has diversified funding sources and assets are managed with liquidity in mind, in order to maintain a healthy balance of cash, cash equivalents and readily marketable securities.

The Group monitors its liquidity risk through two key ratios, the Liquidity Coverage Ratio (LCR) as per Basel III guidelines adopted by QCB to monitor the short term (30 days) resilience of the bank’s liquidity and the Liquidity Ratio as per QCB’s guidelines.

The Liquidity Coverage Ratio (LCR) computed as per Basel III guidelines adopted by QCB was xxx% as at 31 December 2020 (31 December 2019: 134.63%).

The Liquidity Ratio (LR) computed as per QCB guidelines was 122.68% as at 31 December 2020 (31 December 2019: 126.94%).

i) Exposure to liquidity risk

The key measure used by the Group for managing liquidity risk is the ratio of net liquid assets to deposits from customers. For this purpose net liquid assets are considered as including cash and cash equivalents and investment grade debt securities for which there is an active and liquid market less any deposits from banks, debt securities, other borrowings and commitments maturing within the next month. A similar, but not identical, calculation is used to measure the Group’s compliance with the liquidity limit established by the Group’s lead regulator, QCB.

Details of the reported Group ratio of net liquid assets to deposits from customers during the year were as follows:

	2020	2019
Average for the year	126.39%	124.10%
Maximum for the year	137.28%	129.27%
Minimum for the year	120.13%	112.25%

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)
c) Liquidity risk (continued)
i) Exposure to liquidity risk (continued)

Maturity analysis of assets and liabilities

The table below summarizes the maturity profile of the Group’s assets and liabilities based on contractual maturity dates. The contractual maturities of assets and liabilities have been determined on the basis of the remaining period at the reporting date to the contractual maturity date, and do not take account of the effective maturities as indicated by the Group’s deposit retention history and the availability of liquid funds. The Group routinely monitors assets and liabilities maturity profiles to ensure adequate liquidity is maintained.

31 December 2020 Cash and balances with central banks Due from banks Loans and advances to customers Investment securities Investment in an associate Property, furniture and equipment Other assets Total Due to banks Customer deposits Debt securities Other borrowings Other liabilities Total equity Total Maturity gap	Carrying amount 6,895,185 3,673,577 65,450,036 24,667,333 10,176 685,756 2,158,209 103,540,272 23,036,764 55,053,996 328,208 8,217,193 3,109,541 13,794,570 103,540,272 -	Less than 1 month 4,755,275 1,361,280 1,278,723 258,409 - - 2,158,209 9,811,896 8,404,907 23,805,310 - 2,207,841 3,109,541 - 37,527,599 (27,715,703)	1-3 months - 665,214 3,261,826 101,409 - - - 4,028,449 9,990,498 14,599,698 - 280,396 - - 24,870,592 (20,842,143)	3 months – 1 year - 1,322,545 7,652,802 1,996,197 - - - 10,971,544 2,441,897 11,881,141 256,462 3,314,641 - - 17,894,141 (6,922,597)	Subtotal 1 year 4,755,275 3,349,039 12,193,351 2,356,015 - - 2,158,209 24,811,889 20,837,302 50,286,149 256,462 5,802,878 3,109,541 - 80,292,332 (55,480,443)	Above 1 year - 324,538 53,256,685 21,809,675 - - - 75,390,898 2,199,462 4,767,847 71,746 2,414,315 - - 9,453,370 65,937,528	Undated 2,139,910 - - 501,643 10,176 685,756 -
							3,337,485
							- - - - - 13,794,570
							13,794,570
							(10,457,085)

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

c) Liquidity risk (continued)

i) Exposure to liquidity risk (continued)

Maturity analysis of assets and liabilities (continued)

31 December 2019 Cash and balances with central banks Due from banks Loans and advances to customers Investment securities Investment in an associate Property, furniture and equipment Other assets Total Due to banks Customer deposits Debt securities Other borrowings Other liabilities Total equity Total Maturity gap	Carrying amount 5,803,844 7,756,944 65,784,258 26,560,585 10,478 723,597 1,568,719 108,208,425 24,036,948 58,463,833 473,059 6,859,049 5,057,622 13,317,914 108,208,425 -	Less than 1 month 3,069,998 1,848,493 5,556,047 481,194 - - 1,568,719 12,524,451 10,668,405 19,838,967 - 749,200 5,057,622 - 36,314,194 (23,789,743)	1-3 months 300,000 1,898,766 3,146,225 144,674 - - - 5,489,665 8,190,494 15,087,192 138,565 162,489 - - 23,578,740 (18,089,075)	3 months – 1 year - 2,986,672 8,204,181 2,027,043 - - - 13,217,896 4,216,592 17,796,331 264,526 2,400,539 - - 24,677,988 (11,460,092)	Subtotal 1 year 3,369,998 6,733,931 16,906,453 2,652,911 - - 1,568,719 31,232,012 23,075,491 52,722,490 403,091 3,312,228 5,057,622 - 84,570,922 (53,338,910)	Above 1 year - 1,023,013 48,877,805 23,290,945 - - - 73,191,763 961,457 5,741,343 69,968 3,546,821 - - 10,319,589 62,872,174	Undated 2,433,846 - - 616,729 10,478 723,597 -
							3,784,650
							- - - - - 13,317,914
							13,317,914
							(9,553,264)

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

c) Liquidity risk (continued)

i) Exposure to liquidity risk (continued)

Maturity analysis of assets and liabilities (continued)

The table below summarises contractual expiry dates of the Group’s contingent liabilities:

31 December 2020 Guarantees Letters of credit Unutilised credit facilities Total 31 December 2019 Guarantees Letters of credit Unutilised credit facilities Total	Carrying amount 12,392,098 3,670,942 1,093,753 17,156,793 12,896,949 4,679,118 1,737,863 19,313,930	Up to 3 months 4,054,387 829,201 554,728 5,438,316 4,849,738 1,055,023 543,911 6,448,672	3 months – 1 year 4,116,187 326,966 423,515 4,866,668 4,598,397 341,830 1,152,167 6,092,394	Above 1 year 4,221,524 2,514,775 115,510
				6,851,809
				3,448,814 3,282,265 41,785
				6,772,864

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

c) Liquidity risk (continued)
i) Exposure to liquidity risk (continued)

Maturity analysis of assets and liabilities (continued)

The table below summarises the maturity profile of the Group's financial liabilities and derivatives at 31 December based on contractual undiscounted repayment obligations:

31 December 2020 Non-derivative financial liabilities Due to banks Customer deposits Debt securities Other borrowings Other liabilities Total liabilities	Carrying amount 23,036,764 55,053,996 328,208 8,217,193 2,199,555 88,835,716	Gross undiscounted cash flows 23,132,060 55,310,889 330,355 8,302,739 2,199,555 89,275,598	Less than 1 month 8,407,082 23,812,918 - 2,208,922 2,199,555 36,628,477	1-3 months 9,994,883 14,637,590 - 280,753 - 24,913,226	3 months - 1 year 2,474,162 11,981,984 257,508 3,343,283 - 18,056,937	Above 1 year 2,255,933 4,878,397 72,847 2,469,781 -
						9,676,958

Derivative financial instruments:

Generally, forward foreign exchange contracts are settled on a gross basis and interest rate swaps are settled on a net basis.

		Up to 1	Above 1
	Total	year	year
Derivative financial instruments:
Outflow	(9,619,606)	(9,619,606)	-
Inflow	9,697,014	9,697,014	-

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

c) Liquidity risk (continued)
i) Exposure to liquidity risk (continued)

Maturity analysis of assets and liabilities (continued)

31 December 2019 Non-derivative financial liabilities Due to banks Customer deposits Debt securities Other borrowings Other liabilities Total liabilities	Carrying amount 24,036,948 58,463,833 473,059 6,859,049 4,543,346 94,376,235	Gross undiscounted cash flows 24,280,750 58,920,263 478,523 7,052,506 4,543,346 95,275,388	Less than 1 month 10,674,639 19,853,723 - 750,098 4,543,346 35,821,806	1-3 months 8,203,361 15,143,143 138,780 163,030 - 23,648,314	3 months - 1 year 4,292,206 18,052,729 266,830 2,448,009 - 25,059,774	Above 1 year 1,110,544 5,870,668 72,913 3,691,369 -
						10,745,494

Derivative financial instruments:

Generally, forward foreign exchange contracts are settled on a gross basis and interest rate swaps are settled on a net basis.

		Up to 1	Above 1
	Total	year	year
Derivative financial instruments:
Outflow	(6,345,766)	(6,345,766)	-
Inflow	6,342,123	6,342,123	-

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

d) Market risks

The Group takes on exposure to market risks, which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks arise from open positions in interest rate, currency and equity products, all of which are exposed to general and specific market movements and changes in the level of volatility of market rates or prices such as interest rates, credit spreads, foreign exchange rates and equity prices. The Group separates exposures to market risk into either trading or non-trading portfolios.

The market risks arising from trading and non-trading activities are concentrated in Group Treasury and monitored by Market Risk team. Regular reports are submitted to the Board of Directors and ALCO.

A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as ‘IBOR reform’). The Group has exposures to IBORs on its financial instruments that will be replaced or reformed as part of these market-wide initiatives. There is uncertainty over the timing and the methods of transition in some jurisdictions that the Group operates in. The Group anticipates that IBOR reform will impact its risk management and hedge accounting.

i) Management of market risks

Overall authority for market risk is vested in ALCO. Financial Risk Management department is responsible for the development of detailed market risk management policies (subject to review and approval by ALCO) and for the day-to-day review and monitoring.

The Group has adopted a detailed policy framework drafted in accordance with the Qatar Central Bank guidelines for governing investments portfolio including proprietary book. The governance structure includes policies including Treasury and Investment manual, Financial Risk policy and Hedging policy, etc. These policies define the limit structure along with the risk appetite under which the investment activities are undertaken. The limits structure focuses on total investment limits which in accordance with QCB guidelines are 70% of Group’s capital and reserves along with various sub limits such as position and stop loss limits for trading activities. The policies also define various structured sensitivity limits such as VaR and duration for different asset classes within the investment portfolio. The performance of the portfolio against these limits is updated regularly to senior management including ALCO and investment committee.

Investment Committee approve all the investment decision for the Group. Financial Risk Management department is vested with the responsibility of measuring, monitoring risk and reporting risk in the portfolio.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

d) Market risks (continued)

ii) Exposure to interest rate risk

The principal risk to which the banking and trading portfolios are exposed is the risk of loss from fluctuations in the future cash flows or fair values of financial instruments because of a change in market interest rates. Interest rate risk is managed principally through monitoring interest rate gaps and by having pre-approved limits for repricing bands. ALCO is the monitoring body for compliance with these limits and is assisted by Group Treasury in its day-to-day monitoring activities.

A summary of the Group’s interest rate gap position on banking and trading portfolios is as follows:

31 December 2020 Cash and cash equivalents Due from banks Loans and advances to customers Investment securities Investment in an associate Property, furniture and equipment Other assets Total Due to banks Customer deposits Debt securities Other borrowings Other liabilities Total equity Total Interest rate sensitivity gap Cumulative interest rate sensitivity gap			Repricing in:		Non- interest sensitive 3,440,836 - 5,240,852 501,643 10,176 685,756 2,158,209 12,037,472 - - - - 3,109,541 9,794,570 12,904,111 (866,639) -
	Carrying amount 6,895,185 3,673,577 65,450,036 24,667,333 10,176 685,756 2,158,209 103,540,272 23,036,764 55,053,996 328,208 8,217,193 3,109,541 13,794,570 103,540,272 - -	Less than 3 months 3,454,349 3,078,552 60,032,562 361,426 - - - 66,926,889 18,122,290 36,911,670 29,212 7,944,080 - - 63,007,252 3,919,637 3,919,637	3-12 months - 449,371 176,622 1,996,197 - - - 2,622,190 2,715,011 10,384,553 298,996 273,113 - - 13,671,673 (11,049,483) (7,129,846)	Above 1 year - 145,654 - 21,808,067 - - - 21,953,721 2,199,463 7,757,773 - - - 4,000,000 13,957,236 7,996,485 866,639

Doha Bank Q.P.S.C.

QAR ‘000s

Notes to the consolidated financial statements As at and for the year ended 31 December 2020 4 Financial risk management (continued)

d) Market risks (continued)

ii) Exposure to interest rate risk (continued)

		Repricing in:
Carrying amount 5,803,844 7,756,944 65,784,258 26,560,585 10,478 723,597 1,568,719 108,208,425 24,036,948 58,463,833 473,059 6,859,049 5,057,622 13,317,914 108,208,425 - -	Less than 3 months 1,202,900 5,429,625 59,243,176 632,750 - - - 66,508,451 18,149,725 38,265,660 338,847 6,859,049 - - 63,613,281 2,895,170 2,895,170	3-12 months - 2,047,474 202 2,025,456 - - - 4,073,132 4,850,369 17,920,796 134,212 - - - 22,905,377 (18,832,245) (15,937,075)	Above 1 year - - 11,574 23,285,650 - - - 23,297,224 698,145 2,277,377 - - - 4,000,000 6,975,522 16,321,702 384,627	Non- interest sensitive 4,600,944 279,845 6,529,306 616,729 10,478 723,597 1,568,719
				14,329,618
				338,709 - - - 5,057,622 9,317,914
				14,714,245
				(384,627)
				-

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

d) Market risk (continued)

ii) Exposure to interest rate risk (continued)

Sensitivity analysis

The management of interest rate risk against interest rate gap limits is supplemented by monitoring the sensitivity of the Group’s financial assets and liabilities to various standard and non-standard interest rate scenarios. Standard scenarios that are considered on a monthly basis include a 100 basis points (bp) parallel fall or rise in all yield curves worldwide and a 10 bp rise or fall in the greater than 12-month portion of all yield curves. An analysis of the Group’s sensitivity to an increase or decrease in market interest rates, assuming no asymmetrical movement in yield curves and a constant financial position, is as follows:

	10 bp	10 bp
	parallel	parallel
	increase	decrease
*Sensitivity of net interest income*
2020
At 31 December	(5,089)	5,089
2019
At 31 December	(1,730)	1,730
	10 bp	10 bp
	parallel	parallel
	increase	decrease
*Sensitivity of reported equity to interest rate movements*
2020
At 31 December	(20,706)	20,706
2019
At 31 December	(39,378)	39,378

Overall non-trading interest rate risk positions are managed by Group Treasury, which uses investment securities, advances to banks, deposits from banks and derivative instruments to manage the overall position arising from the Group’s non-trading activities.

iii) Exposure to other market risks

Currency risk

The Group is exposed to fluctuations in foreign currency exchange rates. The Board of Directors sets limits on the level of exposure by currency, and in total for both overnight and intra-day positions, which are monitored daily. The Group had the following significant net exposures:

	2020	2019
Net foreign currency exposure:
Pound Sterling	3,354	5,287
Euro	29,067	3,392
Kuwaiti Dinar	32,386	49,550
Japanese Yen	646	2,775
Other currencies	399,535	55,101

Foreign currency sensitivity analysis

The following table details the Group’s sensitivity to a percentage increase or decrease in the Qatari Riyals against the relevant foreign currencies except for US Dollars which is pegged to the Qatari Riyal. The sensitivity analysis includes only outstanding foreign currency denominated items and the impact of a change in the exchange rates are as follows:

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

d) Market risk (continued)

iii) Exposure to other market risks (continued)

	Increase / (decrease) in profit	Increase / (decrease) in profit
	or loss
	2020	2019
5% increase / (decrease) in currency exchange rate
Pound Sterling	168	264
Euro	1,453	170
Kuwaiti Dinar	1,619	2,478
Japanese Yen	32	139
Other currencies	19,977	2,775

Equity price risk

Equity price risk is the risk that the fair value of equities decreases as a result of changes in the equity indices and individual stocks. The equity price risk exposure arises from equity securities classified as available-forsale and fair value through profit or loss.

The Group is also exposed to equity price risk and the sensitivity analysis thereof is as follows:

5% increase / (decrease) in Qatar Exchange 5% increase / (decrease) in Other than Qatar Exchange	2020 Effect on OCI Effect on income statement ± 10,410 - ± 1,152 - ± 11,562 -	2019	2019
	Effect on OCI ± 10,410 ± 1,152 ± 11,562	Effect on OCI ± 10,381 ± 2,340 ±12,721	Effect on income statement - -
			-

The above analysis has been prepared on the assumption that all other variables such as interest rate, foreign exchange rate, etc. are held constant and is based on historical correlation of the equity securities to the relevant index. Actual movement may be different from the one stated above.

e) Operational risks

Operational risk is the risk of loss arising from inadequate or failed internal processes, people and systems, or from external events. The Group has detailed policies and procedures that are regularly updated to ensure a robust internal control mechanism. The Group closely reviews the various recommendations issued by the Basel Committee on ‘Sound Practices for the Management and Supervision of Operational Risk’ for implementation. The Group continues to invest in risk management and mitigation strategies, such as a robust control infrastructure, business continuity management or through risk transfer mechanisms such as insurance and outsourcing.

The Group has a well-defined Operational Risk Management Framework and an independent operational risk function. The Operational Risk Management Committee oversees the implementation of an effective risk management framework that encompasses appropriate systems, practices, policies and procedures to ensure the effectiveness of risk identification, measurement, assessment, reporting and monitoring within the group.

In addition, the Internal Audit department carries out an independent assessment and provides assurance of the actual functioning of the overall Operational Risk Management Framework.

The Group manages operational risk based on a framework that enables the determination of operational risk profile of business units and how it relates to risk measurement, risk mitigation and priorities.

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

e) Operational risks (continued)

During the year, the Group activated its business continuity planning and developed response and recovery plans as part of five phases of its crisis management response to address the business disruption caused by the global pandemic on its operations and financial performance.

A number of techniques are applied to effectively manage the operational risk across the Group. These include:

Effective staff training, documented processes/procedures with appropriate controls to safeguard assets and records, regular reconciliation of accounts and transactions, introduction process of new products, reviews of outsourcing activities, information system security, segregation of duties, financial management and reporting are some of the measures adopted by the Group to manage Group-wide operational risk;
Reporting of any operational risk event, which is used to help identify where process and control requirements are needed to reduce the recurrence of risk events. Risk events are analyzed, reported, mitigated, recorded on a central database and reported quarterly to the Board of Directors; and
Introduction of a bottom-up ‘Control Risk Self-Assessment’ across business and support units including subsidiaries and overseas branches. This approach results in detailed understanding of inherent and residual risks with evaluation of controls across the Group. Therefore, it enhances the determination of specific operational risk profile for the business and support units while corrective action points are captured and the changes of the operational risk profile are monitored on an ongoing basis.

f) Capital management

Regulatory capital

The Group’s policy is to maintain a strong capital base so as to ensure investor, creditor and market confidence and to sustain future development of the business. The impact of the level of capital on shareholders’ return is also recognised and the Group recognises the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position.

The Group and its individually regulated operations have complied with all externally imposed capital requirements throughout the year. The capital adequacy ratio of the Group is calculated in accordance with the Basel III Committee guidelines as adopted by the QCB.

The Group’s regulatory capital position under Basel III and QCB regulations at 31 December was as follows:

Common Equity Tier 1 Capital Additional Tier 1 Capital Additional Tier 2 Capital Total Eligible Capital Risk weighted assets Total risk weighted assets for credit risk Risk weighted assets for market risk Risk weighted assets for operational risk Total risk weighted assets	2020 9,379,037 4,000,000 825,583 14,204,620 2020 Basel III Risk weighted amount 65,655,145 499,559 5,753,553 71,908,257	2019
		9,143,194 4,000,000 927,323
		14,070,517
		2019 Basel III Risk weighted amount 73,399,101 252,621 5,635,707
		79,287,429

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

4 Financial risk management (continued)

f) Capital management (continued)

Regulatory capital Common equity tier 1 (CET1) ratio Tier 1 Capital Ratio Total capital adequacy ratio	2020 14,221,561 13.04% 18.61% 19.75%	2019 14,070,517
		11.53% 16.58% 17.75%

The minimum requirements for Capital Adequacy Ratio under Basel III as per QCB regulations for the year ended 31 December 2020 are as follows:

	CET 1 ratio without capital conservation buffer	CET 1 ratio including capital conservation buffer	Tier 1 capital ratio including capital conservation buffer	Total capital ratio including capital conservation buffer	Total capital including capital conservation buffer and domestic systematic important bank buffer	Total capital including conservation buffer, domestic systematic important bank buffer and ICAAP Pillar II capital charge
Actual	13.04%	13.04%	18.61%	19.75%	19.75%	19.75%
Minimum QCB limit	6.00%	8.50%	10.50%	12.50%	12.50%	13.50%

5 Use of estimates and judgements

a) Key sources of estimation uncertainty

The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

i) Impairment allowances for credit losses

Assessment of whether credit risk on the financial assets has increased significantly since initial recognition and incorporation of forward looking information in the measurement of ECL, refer to note 4(b)(v).

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

5 Use of estimates and judgements (continued)

i) Impairment allowances for credit losses (continued)

ii) Determining fair values

The determination of fair value for financial assets and liabilities for which there is no observable market price requires the use of valuation techniques as described in accounting policy. For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

Where the fair values of financial assets and financial liabilities cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of liquidity and model inputs such as correlation and volatility for longer dated derivatives.

b) Critical accounting judgement in applying the Group’s accounting policies

i) Valuation of financial instruments

The Group’s accounting policy on fair value measurements is discussed in the significant accounting policies section.

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.

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. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and other premium used in estimating discount rates, bond 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.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

5 Use of estimates and judgements (continued)
b) Critical accounting judgement in applying the Group’s accounting policies (continued)
ii) Fair value measurement

The following table provides the fair value measurement hierarchy of the Group’s financial assets and liabilities measured at fair value.

Quantitative disclosures fair value measurement hierarchy for assets and liabilities as at 31 December 2020:

Date of valuation Financial assets measured at fair value: Investment securities measured at FVOCI 31 Dec 2020 Investment securities measured at FVTPL 31 Dec 2020 Derivative instruments: Interest rate swaps 31 Dec 2020 Forward foreign exchange contracts31 Dec 2020 Financial liabilities measured at fair value: Derivative instruments: Interest rate swaps 31 Dec 2020 Forward foreign exchange contracts31 Dec 2020	Level 1 11,513,998 20,239 - - 11,534,237 - - -	Level 2 4,848,510 - 57,700 92,466 4,998,676 894,928 15,058 909,986	Level 3 51,046 34,940 - - 85,986 - - -	Total 16,413,554 55,179 57,700 92,466
				16,618,899
				894,928 15,058
				909,986

There have been no transfers between Level 1, level 2 and Level 3 fair value measurement during the year.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

5 Use of estimates and judgements (continued)

b) Critical accounting judgement in applying the Group’s accounting policies (continued)

ii) Fair value measurement (continued)

Fair value hierarchy for financial instruments measured at fair value as at 31 December 2019.

Date of valuation Financial assets measured at fair value: Investment securities measured at FVOCI 31 Dec 2019 Investment securities measured at FVTPL 31 Dec 2019 Derivative instruments: Interest rate swaps 31 Dec 2019 Forward foreign exchange contracts 31 Dec 2019 Financial liabilities measured at fair value: Derivative instruments: Interest rate swaps 31 Dec 2019 Forward foreign exchange contracts 31 Dec 2019	Level 1 12,526,597 23,237 - - 12,549,834 - - -	Level 2 4,840,498 - 36,459 3,970 4,880,927 506,663 7,613 514,276	Level 3 52,813 41,571 - - 94,384 - - -	Total 17,419,908 64,808 36,459 3,970
				17,525,145
				506,663 7,613
				514,276

During the reporting period 31 December 2019, there were no transfers between Level 1, Level 2 and Level 3 fair value measurements.

iii) Financial asset and liability classification

Assessment of the business model within which the assets are held and assessment of whether the contractual terms of the financial asset are solely payments of principal and interest on the principal amount outstanding. Refer to note 3 (g) for further information.

Details of the Group’s classification of financial assets and liabilities are given in Note 7.

iv) Qualifying hedge relationships

In designating financial instruments in qualifying hedge relationships, the Group has determined that it expects the hedges to be highly effective over the period of the hedging relationship.

In accounting for derivatives as fair value hedges, the Group has determined that the hedged interest rate exposure relates to highly probable future cash flows.

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

5 Use of estimates and judgements (continued)

b) Critical accounting judgement in applying the Group’s accounting policies (continued)

v) Impairment of investments debt securities

Assessment of whether credit risk on the financial asset has increased significantly since initial recognition and incorporation of forward-looking information in the measurement of ECL. Refer to note 4(b)(v) Inputs, assumptions and techniques used for estimating impairment of financial assets for more information.

vi) Going concern

The Group’s management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Group’s ability to continue as a going concern. Therefore, the financial statements continue to be prepared on the going concern basis.

vii) Useful lives of property and equipment

The Group’s management determines the estimated useful life of property and equipment for calculating depreciation. This estimate is determined after considering the expected usage of the asset, physical wear and tear, technical or commercial obsolescence.

6 Operating segments

The Group organizes and manages its operations by two business segments, which comprise conventional banking and insurance activities.

Conventional Banking

==> picture [20 x 14] intentionally omitted <==

Corporate Banking provides a range of product and service offerings to business and corporate customers including funded and non-funded credit facilitates deposits to corporate customers. It also undertakes funding and centralised risk management activities through borrowings, issue of debt securities, use of derivatives for risk management purposes and investing in liquid assets such as shortterm placements and corporate and government debt securities.
Retail Banking provides a diversified range of products and services to individuals. The range includes loans, credit cards, deposits and other transactions with retail customers.

Insurance Activities

Insurance activities to customers include effecting contracts of insurance, carrying out contracts of insurance, arranging deals in investments and advising on investments.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

6 Operating segments (continued)

a) By operating segment

Details of each segment as of and for the year ended 31 December 2020 are stated below:

	2020	Total 2,319,791 3,237 614,081
Corporate Banking 2,205,462 - 488,447 2,693,909 88,525,339 76,652,730 17,090,189	Retail Banking 114,329 - 105,274 219,603 5,064,422 10,762,410 66,604
		2,937,109
		(830,613)
		(1,368,742) (34,680)
		703,074
		(50)
		703,024
		103,530,096 10,176
		103,540,272
		89,745,701 17,156,793

Doha Bank Q.P.S.C.

QAR ‘000s

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

6 Operating segments (continued)

a) By operating segment

	2019	Total 1,980,222 (77,246) 836,009
Corporate Banking 1,746,172 - 682,234 2,428,406 93,962,105 83,740,903 19,229,223	Retail Banking 234,050 123,376 357,426 5,819,749 9,341,693 84,707
		2,738,985
		(867,767)
		(1,117,733) 260
		753,745
		187
		753,932
		108,197,947 10,478
		108,208,425
		94,890,511 19,313,930

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

6 Operating segments (continued)

b) Geographical areas

The following table shows the geographic distribution of the Group’s operating income based on the geographical location of where the business is booked by the Group.

2020 Net operating income Net profit Total assets Total liabilities 2019 Net operating income Net profit Total assets Total liabilities	Qatar 2,809,190 748,298 98,218,411 85,627,999 2,606,295 847,602 98,194,341 86,115,875	Other GCC 103,751 (46,893) 4,498,715 3,448,307 109,979 (94,282) 9,234,320 8,150,056	India Total 24,168 2,937,109 1,619 703,024 823,146 103,540,272 669,396 89,745,702 22,711 2,738,985 612 753,932 779,764 108,208,425 624,580 94,890,511

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

7 Financial assets and liabilities

a) Accounting classifications and fair values

The table below sets out the carrying amounts and fair values of the Group’s financial assets and financial liabilities:

31 December 2020 Cash and balances with central banks Due from banks Positive fair value of derivatives Loans and advances to customers Investment securities: Measured at fair FVOCI Measured at fair FVTPL Measured at amortised cost Other assets Negative fair value of derivatives Due to banks Customer deposits Debt securities Other borrowings Other liabilities	Fair value through profit or loss Debt Equity Derivatives - - - - - - - - 150,166 - - - - - - - 55,179 - - - - - - - - 55,179 150,166 - - 909,986 - - - - - - - - - - - - - - - - - 909,986	Fair Value through other comprehensive income Debt Equity - - - - - - - - 15,960,484 453,070 - - - - - - 15,960,484 453,070 - - - - - - - - - - - - - -	Amortised cost 6,895,185 3,673,577 - 65,450,036 - - 8,198,600 1,657,040 85,874,438 - 23,036,764 55,053,996 328,208 8,217,193 1,679,961 88,316,122	Total carrying amount 6,895,185 3,673,577 150,166 65,450,036 16,413,554 55,179 8,198,600 1,657,040 102,493,337 909,986 23,036,764 55,053,996 328,208 8,217,193 1,679,961 89,226,108	Fair value 6,895,185 3,673,577 150,166 65,450,036 16,413,554 55,179 8,540,490 1,657,040
	Debt Equity - - - - - - - - - - - 55,179 - - - -
	- 55,179				102,835,227
	- - - - - - - - - - - -				909,986 23,036,764 55,053,996 328,208 8,217,193 1,679,961
	- -				89,226,108

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

7 Financial assets and liabilities (continued)

a) Accounting classifications and fair values (continued)

The table below sets out the carrying amounts and fair values of the Group’s financial assets and financial liabilities:

31 December 2019 Cash and balances with central banks Due from banks Positive fair value of derivatives Loans and advances to customers Investment securities: Measured at fair FVOCI Measured at fair FVTPL Measured at amortised cost Other assets Negative fair value of derivatives Due to banks Customer deposits Debt securities Other borrowings Other liabilities	Fair value through profit or loss Debt Equity Derivatives - - - - - - - - 40,429 - - - - - - - 64,808 - - - - - - - - 64,808 40,429 - - 514,276 - - - - - - - - - - - - - - - - - 514,276	Fair Value through other comprehensive income Debt Equity - - - - - - - - 16,867,987 551,921 - - - - - - 16,867,987 551,921 - - - - - - - - - - - - - -	Amortised cost 5,803,844 7,756,944 - 65,784,258 - - 9,075,869 1,173,267 89,594,182 - 24,036,948 58,463,833 473,059 6,859,049 4,029,697 93,862,586	Total carrying amount 5,803,844 7,756,944 40,429 65,784,258 17,419,908 64,808 9,075,869 1,173,267 107,119,327 514,276 24,036,948 58,463,833 473,059 6,859,049 4,029,697 94,376,862	Fair value 5,803,844 7,756,944 40,429 65,784,258 17,419,908 64,808 9,204,426 1,173,267
	Debt Equity - - - - - - - - - - - 64,808 - - - -
	- 64,808				107,247,884
	- - - - - - - - - - - -				514,276 24,036,948 58,463,833 473,059 6,859,049 4,029,697
	- -				94,376,862

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

8 Cash and balances with central banks

Cash Cash reserve with QCB Cash reserve with other central banks Other balances with central banks	2020 1,300,927 2,069,594 70,316 3,454,348 6,895,185	2019 472,818 2,169,707 208,413 2,952,906
		5,803,844

*Cash reserve with QCB and other central banks are mandatory reserves that are not available for use in the Group’s day to day operations.

9 Due from banks

Current accounts Placements Loans to banks Interest receivable Allowance for impairment 10 Loans and advances to customers a) By type Loans Overdrafts Bills discounted Other (Note-i) Less: Deferred profit Expected credit losses of loans and advances to customers - Performing (Stage 1 and 2) Allowance for impairment of loans and advances to customers - Non performing (Stage 3) Interest in suspense Net loans and advances to customers*	2020 399,436 1,480,484 1,793,607 2,064 (2,014) 3,673,577 2020 54,462,315 13,595,830 190,370 554,021 68,802,536 (4,692) (1,126,403) (1,423,990) (797,415) 65,450,036	2019 252,088 4,817,102 2,692,350 3,922 (8,518)
		7,756,944
		2019 57,676,395 10,276,514 308,927 2,666,157
		70,927,993 (14,164) (1,570,149) (2,659,105) (900,317)
		65,784,258

10 Loans and advances to customers

a) By type

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

10 Loans and advances to customers (continued)

a) By type

The aggregate amount of non-performing loans and advances to customers amounted QAR 4,115 million, which represents 5.98% of total loans and advances to customers (2019: QAR 4,122 million, 5.81% of total loans and advances to customers).

During the year, the Group has written-off fully provided non-performing loans amounting to QAR 3,978 million (2019: QAR 1,680 million) as per Qatar Central Bank circular no. 68/2011.

Specific impairment of loans and advances to customers includes QAR 797 million of interest in suspense (2019: QAR 900 million).

*This includes acceptances pertaining to trade finance amounting to QAR 158 million (2019: QAR 2,407 million).

Note-i:

Government and related agencies Corporate Retail	2020 11,499,046 49,450,751 7,852,739 68,802,536	2019 7,512,713 54,958,293 8,456,987
		70,927,993

b) By industry At 31 December 2020 Government and related agencies Non-banking financial institutions Industry Commercial Services Contracting Real estate Personal Others Less: Deferred profit Net impairment of loans and advances to customers	Loans 761,433 1,475,864 880,359 10,005,099 9,719,497 4,888,214 18,933,234 7,455,086 343,529 54,462,315	Overdrafts 10,737,613 75,506 22,966 1,073,473 183,000 614,298 452,149 397,653 39,172 13,595,830	Bills discounted - 6,449 74,375 66,937 37,932 4,414 200 - 63 190,370	Other - - 5,197 111,891 - 40,273 - - 396,660 554,021	Total 11,499,046 1,557,819 982,897 11,257,400 9,940,429 5,547,199 19,385,583 7,852,739 779,424
					68,802,536
					(4,692) (3,347,808)
					65,450,036

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

10 Loans and advances to customers (continued)

b) By industry (continued)

At 31 December 2019 Government and related agencies Non-banking financial institutions Industry Commercial Services Contracting Real estate Personal Others Less: Deferred profit Net impairment of loans and advances to customers	Loans 604,249 1,596,265 658,189 9,406,154 9,541,746 9,124,308 17,872,103 8,077,081 796,300 57,676,395	Overdrafts 6,908,464 5,530 38,955 1,239,464 293,273 863,216 455,443 379,114 93,055 10,276,514	Bills discounted - - 45,741 58,169 189,798 9,689 - 792 4,738 308,927	Other - - 756 2,300,198 231 141,177 - - 223,795 2,666,157	Total 7,512,713 1,601,795 743,641 13,003,985 10,025,048 10,138,390 18,327,546 8,456,987 1,117,888
					70,927,993
					(14,164) (5,129,571)
					65,784,258

c) Movement in ECL / impairment loss on loans and advances to customers

Balance at 1 January Foreign currency translation Net charge for the year Recoveries on credit impaired loans during the year Net impairment losses recorded during the year Written off/transfers during the year Balance at 31 December*	2020 5,129,571 (1,843) 2,294,883 (40,800) 2,254,083 (4,034,003) 3,347,808	2019 5,233,424 3,635
		1,709,699 (49,393)
		1,660,306 (1,767,794)
		5,129,571

*The movement includes the effect of interest suspended on loans and advances to customers as per QCB regulations amounting to QAR 449.1 million during the year (2019: QAR 498.8 million).

The net impairment loss on loans and advances to customers in the income statement includes QAR 434.4 million recovery from the loans & advances previously written off (2019: QAR 43.8).

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

10 Loans and advances to customers (continued)

c) Movement in impairment loss on loans and advances to customers – sector wise (continued)

Reconciliations of the allowance for impairment losses for loans and advances to customers, by class, is as follows:

Corporate lending	SME lending	Retail lending	Real estate mortgage lending	Total
Stage 1 Stage 2 Stage 3 Performing Credit impaired 92,949 1,292,248 3,046,517 (21,231) (549,862) 519,231	Stage 1 Stage 2 Stage 3 Performing Credit impaired 1,628 33,387 117,566 (253) (1,559) 1,811	Stage 1 Stage 2 Stage 3 Performing Credit impaired 16,515 48,034 350,163 (1,479) (7,049) 9,463	Stage 1 Stage 2 Stage 3 Performing Credit impaired 33,619 51,769 45,176 (1,892) 308 1,584	Stage 1 Stage 2 Stage 3 Performing Credit impaired 144,711 1,425,438 3,559,422 (24,855) (558,162) 532,089
10,371 49,518 2,094,263 - - (10,439)	(227) 3,588 26,322 - - (359)	7,994 4,111 68,758 - - (26,695)	247 63,669 16,760 - - (4,713)	18,385 120,886 2,206,103 - - (42,206)
(10,860) (500,344) 2,603,055 - - (3,936,483)	(480) 2,029 27,774 - -(58,769)	6,515 (2,938) 51,526 - -(38,751)	(1,645) 63,977 13,631 - - -	(6,470) (437,276) 2,695,986 - -(4,034,003)
82,089791,904 1,713,089	1,148 35,416 86,571	23,030 45,096 362,938	31,974 115,746 58,807	138,241 988,162 2,221,405

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

10 Loans and advances to customers (continued)

c) Movement in impairment loss on loans and advances to customers – sector wise (continued)

Corporate lending	SME lending	Retail lending	Real estate mortgage lending	Total
Stage 1 Stage 2 Stage 3 Performing Credit impaired 187,287 1,119,197 3,164,776 (4,294) (31,117) 35,411	Stage 1 Stage 2 Stage 3 Performing Credit impaired 2,308 43,277 107,793 (369) (7,680) 8,049	Stage 1 Stage 2 Stage 3 Performing Credit impaired 24,359 37,532 404,799 (1,232) (7,596) 8,828	Stage 1 Stage 2 Stage 3 Performing Credit impaired 9,755 101,890 30,451 (711) (2,724) 3,435	Stage 1 Stage 2 Stage 3 Performing Credit impaired 223,709 1,301,896 3,707,819 (6,606) (49,117) 55,723
(90,044) 204,168 1,494,321 - - (13,073)	(311) (2,210) 29,096 - - (2,290)	(6,612) 18,098 73,008 - - (29,343)	24,575 (47,397) 16,642 - - (4,687)	(72,392) 172,659 1,613,067 - - (49,393)
(94,338) 173,051 1,516,659 - -(1,634,918)	(680) (9,890) 34,855 - -(25,082)	(7,844) 10,502 52,493 - -(107,129)	23,864 (50,121) 15,390 - - (665)	(78,998) 123,542 1,619,397 - -(1,767,794)
92,949 1,292,248 3,046,517	1,628 33,387 117,566	16,515 48,034 350,163	33,619 51,769 45,176	144,711 1,425,438 3,559,422

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

11 Investment securities

The analysis of investment securities is detailed below:

Investment Securities measured at FVOCI* Investment Securities measured at FVTPL Investment Securities measured at amortized cost Interest receivable Net Impairment losses on investment securities measured at amortized cost Total	2020 16,268,922 55,179 8,141,932 208,220 24,674,253 (6,920) 24,667,333	2019 17,259,232 64,808 9,033,190 228,742
		26,585,972 (25,387)
		26,560,585

*Includes QAR 51.0 million ECL on debt securities (2019: QAR 16.3 million)

**The Group has pledged State of Qatar Bonds amounting to QAR 8,900 million (2019: QAR 7,747 million) against repurchase agreements.

a) Fair Value Through Other Comprehensive Income

		2020
	Quoted	Unquoted	Total
Equities	402,024	51,046	453,070
State of Qatar Debt Securities	11,606,694	-	11,606,694
Other Debt Securities	4,209,158	-	4,209,158
	16,217,876	51,046	16,268,922

b) Fair Value Through Profit or Loss

b) Fair Value Through Profit or Loss
		2020
	Quoted	Unquoted	Total

Equities	4,669	-	4,669
Mutual Funds and Equities	13,633	34,940	48,573
Other Debt Securities	1,937	-	1,937
	20,239	34,940	55,179

c) Amortised Cost

		2020
	Quoted	Unquoted	Total
By Issuer	7,500,920 253,668 (6,902)	- 387,344 (18)
State of Qatar Debt Securities			7,500,920
Other Debt Securities			641,012
Net impairment loss			(6,920)
	7,747,686	387,326	8,135,012
	7,747,686 - 7,747,686
By Interest Rate		387,326 - 387,326
Fixed Rate Securities			8,135,012 -
Floating Rate Securities
			8,135,012

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

11 Investment securities (continued)

a) Fair Value Through Other Comprehensive Income

		2019
	Quoted	Unquoted	Total
Equities	499,108	52,813	551,921
State of Qatar Debt Securities	11,841,437	-	11,841,437
Other Debt Securities	4,865,874	-	4,865,874
	17,206,419	52,813	17,259,232

b) Fair Value Through Profit or Loss

		2019
	Quoted	Unquoted	Total

Mutual Funds and Equities	23,237	41,571	64,808
	23,237	41,571	64,808
c) Amortised Cost
		2019
	Quoted	Unquoted	Total
By Issuer	8,084,648 282,898 (18,863)	- 665,644 (6,524)
State of Qatar Debt Securities			8,084,648
Other Debt Securities			948,542
Net impairment loss			(25,387)
	8,348,683	659,120	9,007,803
	8,348,683 -
By Interest Rate		659,120 -
Fixed Rate Securities			9,007,803
Floating Rate Securities			-
	8,348,683	659,120	9,007,803

Doha Bank Q.P.S.C.

As at and for the year ended 31 December 2020

QAR ‘000s

Notes to the consolidated financial statements

11 Investment securities (continued)

c) Movement in ECL / impairment losses on investment securities

Balance at 1 January Provision for impairment loss created during the year Write off during the year Balance at 31 December 12 Investment in an associate Balance at 1 January Foreign currency translation Share of results Cash dividend Balance at 31 December	2020 25,387 126 (18,593) 6,920 2020 10,478 (252) (50) - 10,176	2019 24,582 2,201 (1,396)
		25,387
		2019 10,510 (219) 187 -
		10,478

The financial position and results of the associates based on audited financial statements, as at and for the year ended 31 December are as follows:

31 December Total assets Total liabilities Total revenue (Loss) / profit Share of (Loss) / profit	2020 2019 52,978 50,931 39,079 36,543 11,086 10,583 (114) 424 (50) 187

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

13 Property, furniture and equipment

Cost: Balance as at 1 January Additions/ transfers Capitalization WIP Disposals/Write-off Depreciation: Balance at 1 January Depreciation Disposals/Write-off Net Book Valueas at 31 December 2020 Cost: Balance at 1 January 'Recognition of right-of- use asset on initial application of IFRS 16 Adjusted balance as at 1 January Additions/ transfers Disposals/Write-off Depreciation: Balance at 1 January Depreciation Disposals/Write-off Net Book Valueas at 31 December 2019	Land and buildings 974,924 45,240 13,062 (188) 1,033,038 355,067 69,934 - 425,001 608,037 Land and buildings 792,216 130,656 922,872 52,052 - 974,924 282,611 72,456 - 355,067 619,857	Leasehold improvements 201,845 2,987 - - 204,832 167,995 11,521 - 179,516 25,316 Leasehold improvements 195,810 - 195,810 7,883 (1,848) 201,845 156,482 13,293 (1,780) 167,995 33,850	2020 Furniture and equipment 541,539 16,851 - (780) 557,610 476,841 33,379 (780) 509,440 48,170 2019 Furniture and equipment 525,626 1,502 527,129 25,055 (10,645) 541,539 453,991 33,295 (10,445) 476,841 64,698	Vehicles 12,360 1,497 - (1,210) 12,647 7,168 2,456 (1,210) 8,414 4,233 Vehicles 5,742 5,104 10,846 1,983 (469) 12,360 4,841 2,796 (469) 7,168 5,192	Total 1,730,668 66,575 13,062 (2,178)
					1,808,127
					1,007,071
					117,290
					(1,990)
					1,122,371
					685,756
					Total 1,519,394 137,262
					1,656,657 86,973 (12,962)
					1,730,668
					897,925
					121,840
					(12,694)
					1,007,071
					723,597

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

13 Property, furniture and equipment (continued)

The Group leases branches, ATM machines, vehicles and computer equipment. Information about leases for which the Group is a lessee is presented below.

Group is a lessee is presented below.
	Land and buildings	Furniture and equipment	Vehicles	Total
At 31 December 2020
Recognition of right-of-use asset at 1 January	141,960	1,354	4,686	148,000
Additions	45,212	616	869	46,697
Depreciation charge for the year	(35,132)	(1,328)	(2,150)	(38,610)
Balance at 31 December	152,040	642	3,405	156,087



	Land and buildings	Furniture and equipment	Vehicles	Total
At 31 December 2019
Recognition of right-of-use asset at 1 January	130,656	1,502	5,104	137,262
Additions	52,052	1,272	1,983	55,307
Depreciation charge for the year	(40,748)	(1,420)	(2,401)	(44,569)
Balance at 31 December	141,960	1,354	4,686	148,000

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

14 Other assets

Prepaid expenses Repossessed collateral* Positive fair value of derivatives (Note 34) Deferred tax asset Sundry debtors Collateral margin Others	2020 70,772 102,381 150,166 177,850 52,857 1,328,759 275,424 2,158,209	2019 43,173 134,000 40,429 177,850 55,816 755,133 362,318
		1,568,719

*This represents the value of the properties acquired in settlement of debts. The fair values of these properties as at 31 December 2020 are not materially different from the carrying values.

15 Due to banks

Balances due to central banks Current accounts Short-term loan from banks Repo borrowings Interest payable 16 Customer deposits a) By type Current and call deposits Saving deposits Time deposits Interest payable b) By sector Government and semi government agencies Individuals Corporates Non-banking financial institutions Interest payable	2020 3,194,244 81,357 9,073,640 10,669,299 18,224 23,036,764 2020 9,197,448 2,957,812 42,654,395 244,341 55,053,996 2020 20,136,392 12,429,260 21,330,838 913,165 244,341 55,053,996	2019 - 247,837 13,850,187 9,895,525 43,399
		24,036,948
		2019 9,496,990 2,379,553 46,167,095 420,195
		58,463,833
		2019 23,801,730 11,681,945 20,820,404 1,739,559 420,195
		58,463,833

16 Customer deposits

a) By type

b) By sector

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

17 Debt securities

The Group has issued subordinated debt notes and senior guaranteed notes as follows:

Senior guaranteed notes Interest payable	2020 327,430 778 328,208	2019 471,908 1,151
		473,059

Note

During current year, the Group issued USD 63 million (2019: USD 55 million) and JPY 3.0 billion (2019: JPY 8.1 billion) senior unsecured debt under its updated EMTN programme. Interest on these ranges from xx% (2019: xx%).

18 Other borrowings

Term loan facilities Interest payable Interest on these ranges from xx% (2019: xx%). The table below shows the maturity profile of other borrowings. Up to 1 year Between 1 and 3 years 19 Other liabilities Accrued expense payable Provision for end of service benefits (note-i) Staff provident fund Tax payable Negative fair value of derivatives (note 34) Unearned income Cash margins Dividend payable Unclaimed balances Proposed transfer to social and sport fund Lease liabilities (note-ii) Allowance for Impairment for loan commitments and financial guarantees Others Total*	2020 8,200,026 17,167 8,217,193 2020 5,806,659 2,410,534 8,217,193 2020 63,044 137,453 41,975 1,146 909,986 129,632 389,962 45,503 13,245 17,576 153,599 259,029 947,391 3,109,541	2019 6,824,310 34,739
		6,859,049
		2019 3,030,356 3,828,693
		6,859,049
		2019 72,984 143,039 46,338 1,437 514,276 125,664 387,985 48,533 12,327 18,848 146,283 244,286 3,295,622
		5,057,622

*This includes acceptances pertaining to trade finance amounting to QAR 157 million (2019: QAR 2,407 million).

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

19 Other liabilities (continued)

Note-i Provision for end of service benefits Balance at 1 January Provision for the year Provisions used during the year Balance at 31 December	2020 143,039 11,892 (17,478) 137,453	2019 133,524 18,366 (8,851)
		143,039

Note-ii

Lease liabilities include current and non-current liabilities amounting to QAR 4.7 million (2019: QAR 9.6 million) and QAR 148.9 million (2019: 136.7 million), respectively.

20 Equity

a. Share capital

*Authorised number of ordinary shares (in thousands)* On issue at the beginning of the reporting year On issue at 31 December	Ordinary	shares
	2020 3,100,467 3,100,467	2019 3,100,467
		3,100,467

At 31 December 2020, the authorised share capital comprised 3,100,467 thousands ordinary shares (2019: 3,100,467 thousands). These instruments have a par value of QAR 1 (2019: QAR 1). All issued shares are fully paid.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Group.

b. Legal reserve

In accordance with Qatar Central Bank’s Law No. 13 of 2012, 10% of the net profit for the year is required to be transferred to legal reserve until the legal reserve equals 100% of the paid up capital. This reserve is not available for the Bank for distribution except in circumstances specified in the Qatar Commercial Companies’ Law No. 11 of 2015 and is subject to the approval of QCB.

The legal reserve includes share premium received on issuance of new shares in accordance with Qatar Commercial Companies Law 11 of 2015.

c.

Risk reserve

In accordance with the Qatar Central Bank regulations, a minimum requirement of 2.5% of the net loans and advances to customers, except for facilities granted to Government, is required as risk reserve to cover any contingencies.

The Group has not transferred additional amount to its risk reserve during the year ended 31 December 2020 (2019: QAR 712.4 million).

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

20 Equity (continued)

d. Fair value reserve

This reserve comprises the fair value changes recognised on available-for-sale/ fair value through other comprehensive income (FVOCI) financial assets.

Balance as at 1 January Impact of revaluation Reclassified to income statement Net Movement during the Year Balance as at 31 December *	Total 2020 155,043 633,884 (635,935) (2,051) 152,992	Total 2019 (227,271) 723,789 (341,475)
		382,314
		155,043

*Includes net realised loss on equity investments classified as FVOCI.

e. Foreign currency translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations.

f. Proposed Dividend

The Board of Directors of the Group has proposed a XX cash dividend for the year ended 2020 (2019: Nil) which is subject to approval at the Annual General Meeting of the shareholders.

g. Instrument eligible as additional capital

Issued on 31 December 2013 Issued on 30 June 2016	2020 2,000,000 2,000,000 4,000,000	2019 2,000,000 2,000,000
		4,000,000

The Group has issued regulatory Tier I capital notes totaling to QAR 4 billion. These notes are perpetual, subordinated, unsecured and each has been priced at a fixed rate for the first six years and shall be re-priced thereafter. The coupon is discretionary and the event on non-payment is not considered as an event of default. The notes carry no maturity date and have been classified under Tier 1 capital.

21 Interest income

Balance with central banks Due from banks and non-banking financial institutions Debt securities Loans and advances to customers	2020 12,237 63,736 858,280 2,809,517 3,743,770	2019 29,690 82,576 931,660 3,123,143
		4,167,069

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

21 Interest income (continued)

The amounts reported above include interest income, calculated using the effective interest method that relate to the following items:

Financial assets measured at amortised cost Financial assets measured at fair value Total 22 Interest expense Due to banks Customer deposits Debt securities Others Others represent interest expense related to lease assets. 23 Fee and commission income Credit related fees Brokerage fees Bank services fee Commission on unfunded facilities Others 24 Fee and commission expense Bank fees Card related fees Others 25 Net foreign exchange gain Dealing in foreign currencies Revaluation of assets and liabilities	3,213,903 529,867 3,743,770 2020 529,568 874,923 15,619 3,869 1,423,979 2020 54,543 1,346 246,322 99,615 14,608 416,434 2020 556 105,659 5,879 112,094 2020 (12,147) 117,990 105,843	3,503,550 663,519
		4,167,069
		2019 838,756 1,334,247 10,023 3,821
		2,186,847
		2019 99,703 481 286,032 118,506 15,981
		520,703
		2019 365 114,630 11,612
		126,607
		2019 4,780 106,744
		111,524

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

26 Net income from investment securities
	2020	2019
Net gain from sale of investments measured at FVOCI	150,431	273,657
Dividend income	28,206	35,627
Changes in fair value of investment securities measured at FVTPL	5,040	(3,560)
	183,677	305,724
27 Other operating income
	2020	2019
Rental income	11,807	12,908
Others	8,414	11,757
	20,221	24,665
28 Staff costs
	2020	2019
Staff cost	4 23,404	468,418
Staff pension fund costs	4,869	4,943
End of service benefits	11,892	18,366
Training	1,069	1,564
	441,234	493,291
29 Other expenses
	2020	2019
Advertising	19,001	27,477
Professional fees	31,352	35,294
Communication and insurance	48,780	49,283
Board of Directors’ remuneration	12,697	164
Occupancy and maintenance	31,925	36,747
Computer and IT costs	51,352	46,353
Printing and stationery	6,271	8,848
Travel and entertainment costs	1,595	4,396
Others*	106,146	111,331
	309,119	319,893
*Includes impairment of QAR 31.6 million on repossessed collateral as disclosed in note 14 (2019: Nil).
30 Tax expense
	2020	2019
Current tax expense
Current year	1,269	1,439
Adjustments for prior years	-	(30,583)
	1,269	(29,144)
Deferred tax expense
Temporary differences	-	-
Income tax expense / (reversal)	1,269	(29,144)

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

31 Basic and diluted earnings per share

Earnings per share of the Group is calculated by dividing profit for the year attributable to the equity holders (further adjusted for interest expense on Tier 1 capital notes) of the Bank by the weighted average number of ordinary shares in outstanding during the year:

Profit for the year attributable to the equity holders of the Group Deduct: Interest on Tier 1 capital notes Net profit attributable to equity holders of the Group Weighted average number of outstanding shares (in thousands) Basic and diluted earnings per share (QAR)	2020 703,024 (203,000) 500,024 3,100,467 0.16	2019 753,932 (220,000)
		533,932 3,100,467
		0.17

The earnings per share for the comparatives has been restated to reflect the share split. Refer Note 20(a).

The weighted average number of shares are as follows:

*In thousands of shares* Weighted average number of shares at 31 December	2020 2019 3,100,467 3,100,467

32 Contingent liabilities and other commitments

Contingent liabilities Unused facilities Guarantees Letters of credit Others Other commitments Forward foreign exchange contracts Interest rate swaps Total	2020 1,093,753 12,392,098 3,670,942 59,694 17,216,487 9,604,548 6,604,533 16,209,081 33,425,568	2019 1,737,863 12,896,949 4,679,118 49,819
		19,363,749
		6,338,153 7,110,363
		13,448,516
		32,812,265

Unused facilities

Commitments to extend credit represent contractual commitments to make loans and revolving credits. The majority of these expire within a year. Since commitments may expire without being drawn upon, the total contractual amounts do not necessarily represent future cash requirements.

Guarantees and Letters of credit

Guarantees and letters of credit commit the Group to make payments on behalf of customers in the event of a specific event. Guarantees and standby letters of credit carry the same credit risk as loans.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

33 Cash and cash equivalents Cash and balances with central banks* Due from banks and other financial institutions maturing within 3 months	2020 4,755,276 2,246,470 7,001,746	2019 3,425,724 3,772,953
		7,198,677

*Cash and balances with central banks do not include the mandatory cash reserve.

Doha Bank Q.P.S.C.

Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

34 Derivatives

				Notional	/ expected amount by term to maturity	/ expected amount by term to maturity	/ expected amount by term to maturity
	Positive	Negative	Notional	within	3 - 12	1-5	More than
	fair value	fair value	Amount	3 months	months	years	5 years

At 31 December 2020:
Derivatives held for trading:
Forward foreign exchange contracts	92,466	15,058	9,604,548	7,296,520	1,946,330	36,698	-

Derivatives held for fair value hedges:
Interest rate swaps	57,700	894,928	6,604,533	-	182,075	3,096,590	3,325,868

Total	150,166	909,986	16,209,081	7,296,520	2,128,405	3,458,288	3,325,868


				Notional / expected amount by term to maturity
	Positive	Negative	Notional	within	3 - 12	1-5	More than
	fair value	fair value	Amount	3 months	months	years	5 years

At 31 December 2019:
Derivatives held for trading:
Forward foreign exchange contracts	3,970	7,613	6,338,153	1,844,301	4,493,852	-	-

Derivatives held for fair value hedges:
Interest rate swaps	36,459	506,663	7,110,363	72,830	36,415	2,967,681	4,033,437

Total	40,429	514,276	13,448,516	1,917,131	4,530,267	2,967,681	4,033,437

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

35 Related parties

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 entities over which the Group exercises significant influence, major shareholders, directors and key management personnel of the Group. The Group enters into transactions, arrangements and agreements involving directors, senior management and their related concerns in the ordinary course of business at commercial interest and commission rates.

The related party transactions and balances included in these consolidated financial statements are as follows:

	2020	2019
Assets:
Loans and advances to customers	1,821,563	2,368,267
Liabilities:
Customer deposits	669,281	714,340
Unfunded items:
Contingent liabilities and other commitments	600,477	661,588
Other assets	8,305	8,305
Income statement items:
Interest, commission and other income	57,078	65,747
Interest, commission and other expense	19,724	15,224

No impairment losses have been recorded against balances outstanding during the year with key management personnel.

Key management personnel (including Board of Directors) compensation for the year comprised:

Salaries and other benefits End of service indemnity benefits and provident fund	2020 51,597 1,298 52,895	2019 41,528 2,974
		44,502

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

36 Impact of COVID-19

The coronavirus (“COVID-19”) pandemic has spread across various geographies globally, causing disruption to business and economic activities. COVID-19 has brought about uncertainties in the global economic environment. The fiscal and monetary authorities, both domestic and international, have announced various support measures across the globe to counter possible adverse implications.

The Bank’s operations are concentrated in economies that are relatively dependent on the price of crude oil. During the financial reporting period, oil prices have witnessed unprecedented volatility. The Bank is closely monitoring the situation and has activated its business continuity planning and other risk management practices to manage the potential business disruption the COVID-19 outbreak may have on its operations and financial performance.

IASB Guidance

On 27 March 2020, the IASB issued a guidance note on accounting for expected credit losses in the light of current uncertainty arising from the Covid-19 pandemic. The guidance note states that IFRS 9 requires the application of judgement and both requires and allows entities to adjust their approach to determining ECLs in different circumstances. A number of assumptions and linkages underlying the way ECLs have been implemented to date may no longer hold in the current environment. Entities should not continue to apply their existing ECL methodology mechanically.

Further, to assess significant increase in credit risk (SICR) IFRS 9 requires that entities assess changes in the risk of a default occurring over the expected life of a financial instrument. Both the assessment of SICR and the measurement of ECLs are required to be based on reasonable and supportable information that is available to an entity without undue cost or effort. Entities are required to develop estimates based on the best available information about past events, current conditions and forecasts of economic conditions. In assessing forecast conditions, consideration should be given both to the effects of Covid-19 and the significant government support measures being undertaken.

QCB support programs and initiatives

In response to COVID-19, QCB launched a support program (“QCB support program”) for the affected sectors. The support program mainly encompasses the following:

Deferral of loan installments for affected sectors;
Maximum rate to be charged during the deferral of installment period to be capped at 2.5%;
Zero-cost repo facilities for bank meeting the criteria; and
Point of sale (“POS”) and ATM withdrawal fees;

(a) Expected credit losses

The Bank has performed an assessment of COVID-19 which has resulted in changes to the expected credit loss methodology and valuation estimates and judgements as at and for the year ended 31 December 2020. These are disclosed in note 4(b)(v).

(a) Valuation estimates and judgements

The Bank has considered potential impacts of the current economic volatility in determination of the reported amounts of the Bank’s financial and non-financial assets and these are considered to represent management's best assessment based on observable information. Markets however remain volatile and the recorded amounts remain sensitive to market fluctuations.

The impact of such uncertain economic environment is judgmental and the Bank will continue to reassess its position and the related impact on a regular basis.

As with any economic forecasts, the projections and likelihoods of the occurrence are subject to a high degree of inherent uncertainty and therefore the actual outcomes may be significantly different to those projected.

Doha Bank Q.P.S.C. Notes to the consolidated financial statements As at and for the year ended 31 December 2020

QAR ‘000s

36 Impact of COVID-19 (continued)

(c) Accounting for modified loans and advances

As part of QCB support program as detailed above, the Bank has deferred payments on lending facilities for those companies that qualify as affected sectors. The payment reliefs are considered as short-term liquidity support to address the borrowers’ potential cash flow issues. The Bank has effected the payment reliefs by deferring the installments with no additional costs to be borne by the customer. The accounting impact of these changes in terms of the credit facilities has been assessed and accounted for in accordance with the requirements of IFRS 9 as a modification of loan arrangement in interest income.

(d) Accounting for zero rate repo facilities

The QCB has advised banks to extend new financing to affected sectors at reduced rates, which is to be supported by zero-cost repo facilities from QCB, and extended guarantees from the government of the State of Qatar to local banks to support these affected sectors. The benefit arising out of the zero rate repos was not considered to be material for the period.

37 Comparative information

Certain comparative information has been reclassified where necessary to preserve consistency with the presentation in the current period. However, such reclassifications did not have any effect on the statement of income or the consolidated equity of the Group for the comparative year.

Doha Bank Q.P.S.C.

Supplementary information As at 31 December 2020

QAR ‘000s

FINANCIAL STATEMENTS OF THE PARENT

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTS

Statement of Financial Position – Parent Bank

As at 31 December ASSETS Cash and balances with central banks Due from banks Loans and advances to customers Investment securities Investment in an associate Property, furniture and equipment Other assets TOTAL ASSETS LIABILITIES Due to banks Customer deposits Debt securities Other borrowings Other liabilities TOTAL LIABILITIES EQUITY Share capital Legal reserve Risk reserve Fair value reserves Foreign currency translation reserve Retained earnings TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK Instrument eligible as additional capital TOTAL EQUITY TOTAL LIABILITIES AND EQUITY	2020 6,895,185 3,619,175 65,450,036 24,717,229 10,176 684,936 2,106,078 103,482,815 23,036,764 55,097,695 328,208 8,217,193 3,013,534 89,693,394 3,100,467 5,080,853 849,600 151,973 (62,587) 669,115 9,789,421 4,000,000 13,789,421 103,482,815	2019 5,803,844 7,710,358 65,784,258 26,613,540 10,478 720,611 1,455,021 108,098,110 24,036,948 58,563,777 473,059 6,859,049 4,844,233 94,777,066 3,100,467 5,080,853 849,600 154,172 (58,846) 194,798 9,321,044 4,000,000 13,321,044 108,098,110

Doha Bank Q.P.S.C.

Supplementary information For the year ended 31 December 2020

QAR ‘000s

FINANCIAL STATEMENTS OF THE PARENT BANK (CONTINUED)

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTS (CONTINUED)

Income Statement – Parent Bank

Interest income Interest expense Net interest income Fee and commission income Fee and commission expense Net fee and commission income Net foreign exchange gain Net income / (loss) from investment securities Other operating income Net operating income Staff costs Depreciation Net impairment reversal / (loss) on investment securities Net impairment loss on loans and advances to customers Net impairment reversal on other financial assets Other expenses Profit for the year before tax Income tax (expense) / reversal Profit for the year	2020 3,743,770 (1,425,150) 2,318,620 416,434 (112,094) 304,340 105,843 183,657 21,273 310,773 2,933,733 (430,948) (115,368) (34,680) (1,368,742) 38,299 (326,082) (2,237,521) 696,212 (1,269) 694,943	2019 4,167,069 (2,188,054)
		1,979,015
		520,703 (126,607)
		394,096
		111,524 305,521 24,355
		441,400
		2,814,511 (483,112) (119,616) 260 (1,117,733) 38,113 (342,963)
		(2,025,051) 789,460 29,144
		818,604

AI assistant

Doha Bank Q.P.S.C. — Annual Report 2020

10819_10-k_2021-02-08_eb5fe0c2-e5e6-4728-9daf-f375d69916b4.pdf

INDEPENDENT AUDITOR’S REPORT

Report on the audit of the Consolidated Financial Statements

Key audit matters

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

Other information

Responsibilities of the Board of Directors for the consolidated financial statements

Auditor’s Responsibilities for the audit of the consolidated financial statements

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

Auditor’s responsibilities for the audit of the consolidated financial statements (continued)

Report on other legal and regulatory requirements

Consolidated income statement For the year ended 31 December 2020

1 Reporting entity

2 Basis of preparation

a) Statement of compliance

b) Basis of measurement

c) Functional and presentation currency

2 Basis of preparation (continued)

d) Use of estimates and judgements

3 Significant accounting policies

a) New, amended standards and interpretations

IBOR Transition

Standards issued but not yet effective

3 Significant accounting policies (continued)

a) New, amended standards and interpretations (continued)

Standards issued but not yet effective (continued)

b) Basis of consolidation

c) Business combinations and goodwill

3 Significant accounting policies (continued)

c) Business combinations and goodwill (continued)

d) Associates

3 Significant accounting policies (continued)

e) Foreign currency

f) Foreign operations

g) Financial assets and financial liabilities

i) Recognition and initial measurement

ii) Classification

Financial assets

Financial assets (continued)

Business model assessment

Assessment whether contractual cash flows are solely payments of principal and interest

3 Significant accounting policies (continued)

g) Financial assets and financial liabilities (continued)

ii) Classification (continued)

Reclassifications

Financial liabilities

iii) Derecognition

iv) Modification of financial assets and liabilities

Financial assets

3 Significant accounting policies (continued)

iv) Modification of financial assets and liabilities

Financial assets (continued)

Financial liabilities

v) Offsetting

vi) Measurement principles

Amortised cost measurement

Fair value measurement

Fair value measurement (continued)

vii) Identification and measurement of impairment

Measurement of ECL

Restructured financial assets

3 Significant accounting policies (continued)

g) Financial assets and financial liabilities (continued)

vii) Identification and measurement of impairment (continued)

Credit-impaired financial assets

h) Cash and cash equivalents

i) Due from banks and loans and advances to customers

Write-off of loans and advances to customers

3 Significant accounting policies (continued)

j) Investment securities

k) Derivatives

Derivatives held for risk management purposes and hedge accounting

3 Significant accounting policies (continued)

Hedge Accounting

Fair value hedges

Other non-trading derivatives

Derivatives held for trading purposes

Doha Bank Q.P.S.C. Annual Report 2020