Omar Mahmood, head of Financial Services for KPMG in the Middle East & South Asia, and partner at KPMG in Qatar
KPMG’s latest edition of the ‘GCC listed banks’ results’ report has shown that Qatar’s banking sector witnessed positive results in 2019, with an average 5.5 percent growth in net profit, which is attributable to higher margins, continued cost control, and a clear focus on risk. The banking sector continued to prove strength and resilience as Qatar banks saw growth in their asset base by 9.3 percent despite the liquidity pressure.
Market sentiment has also reflected these fundamentals with the share prices of all listed banks, except one, showing an upward trend, although this trend has reversed in 2020 with an overall decline of 10.6 percent in listed bank share prices in Qatar from 1 January 2020 to 30 April 2020.
Speaking about the report, Omar Mahmood, head of Financial Services for KPMG in the Middle East & South Asia, and partner at KPMG in Qatar, commented, “The financial trends identified through our analysis were largely positive, which, given the unique political and economic circumstances the region has witnessed in recent years, is particularly impressive, reflecting the continued resilience of the banking sector.”
On another note, the COVID-19 pandemic that the world is facing since the beginning of the year 2020 is having unprecedented impact on the financial markets globally and locally and creating a unique situation for the industry because of the implications for operating models, employees, suppliers, customers, and the drop in oil prices that all affected financial results.
Banking experts agree that the sector will be dealing with the effects of this pandemic for the foreseeable future, leading the banking sector to evolve, and only agile and flexible banks that are willing to transform will succeed and secure their financial strength for future growth.
On the future of the financial services sector in light of the current pandemic, Mahmood commented: “We are witnessing banks evolving at a faster pace than ever before and in some cases transforming their business models and venturing into “new age banking”, be it through the use of Artificial Intelligence (AI), Robotic Process Automation (RPA), or by launching digital only branches to serve their customer base more effectively.
We expect banks to continue to aggressively pursue technological advancement and use revamped business platforms, by partnering and collaborating with various fintech firms.” Additional insights in the report find that although regional banks have remained resilient in terms of profitability and asset growth, they do however continue to focus on managing the credit quality of their loan portfolios to ensure this resilience can be maintained.
The report titled ‘GCC listed banks’ results: New Age Banking (Access Report), analyses the results of selected listed banks in the region. It summarizes bank’s results against selected key performance indicators for the year ended 31 December 2019 and compares these with the same information for the year ended 31 December 2018.
