The banking sector in Qatar remains solid, strong and robust despite an unjust siege imposed on Qatar by some neighbouring countries. Qatar’s banking system is healthy with ample liquidity, high asset quality and strong capitalisation.
The Secretary-General of the Union of Arab banks (UAB), Wissam Fattouh, said Qatar’s banking sector enjoys high flexibility as a result of the prudent monetary policy, which took it to the top of the Arab banking systems.
He said that the siege failed to affect the banking system and added Qatar National Bank ranked top among the largest Arab banks. An analytical study issued recently by the General Secretariat of the Union of Arab Banks, based in Beirut, concluded that the Qatari banking sector ranks third among Arab banking sectors in terms of asset size, accounting for about 11 percent of the total assets of the Arab banking sector, and 10 percent of its deposits.
The study said total assets of the Qatari banking sector stood at about $382.5bn at the end of the second quarter of 2018, representing a 2.1 percent growth rate at the end of 2017, and public infrastructure investments in preparation for the 2022 World Cup and the economic diversification programme have provided an enabling environment for sustained growth in the banking sector.
The banking sector’s assets to GDP ratio stood at 225 percent in 2017 compared to 186 percent in 2015, and this indicates that the banking sector has contributed significantly to the Qatari economy, the study said.
Public and private sector deposits reached about $224.8bn, and the deposits in Qatari banks are expected to grow further next year, supported by higher oil and gas revenues. The Secretary-General of UAB said the results of the economic blockade were limited as a result of its implemented strategy of not relying on the basic economy which is the “gas economy”. He said the diversification of Qatar’s internal and external investments gave its economy greater flexibility which enabled the sector to respond to economic crises.
Qatar Central Bank has a very high reserve level of foreign currency, which is the main pillar of the Qatari riyal. QCB’s foreign exchange reserves rose 0.3 percent month-on-month to reach $45.4bn in July, equating to seven months of import cover, according to QNB’s Monthly Monitor chart. Also, credit rating agency Moody’s Investors Service upgraded the outlook for Qatar’s banking system to stable from negative, reflecting the resilience of the country’s economy and banking system to the ongoing siege, as well as the stable outlook on the Government of Qatar’s Aa3 long-term issuer rating. All these figures indicate robustness and flexibility of the banking sector in Qatar.
Moreover, the actions of the monetary authorities to provide foreign exchange to individuals and companies and to protect the local currency reflect the confidence of the citizens and investors in Qatar’s banking sector.
