Qatar banks are strong enough to face any pressure. The stress tests done by the Qatar Central Bank (QCB) has proven that the banks in Qatar are strong enough to face any internal and external pressures.
QCB Governor, in an interview to QNA recently, said that high capitalisation of banks in Qatar enables them to face internal and external risks. The stress tests carried out by the Bank were based on the maximum assumptions of shocks to the banks whether through internal or external factors.
Regarding the ability of local banks to provide liquidity and meet the financial requirement of the State, the Governor explained that the banking sector in the country has been working on strengthening basic liquidity structures since the beginning of the unjust blockade on the State.
Qatar’s financial sector, in particular, the banking sector remained resilient, supported by sufficient capital buffers, low NPL ratio and healthy asset growth. With proactive support from the government and the Central Bank, the financial sector mitigated the challenges faced, after the economic blockade.
QCB’s strategy during the first months of the siege focused on ensuring sufficient liquidity and reassuring the deposit holders of the Bank’s full commitment to the maturity dates of the withdrawals. Therefore, periodic and regular meetings were held with officials of the financial institutions to identify any potential liquidity challenges and to develop appropriate plans to deal with them proactively.
Total assets in Qatar’s banking sector, excluding Qatar Development Bank, at the end of August 2018 have registered a growth of nearly 5 percent year on year. The share of total credit was about 67 percent of total assets, while the share of investment was about 16.3 percent. On the liabilities side, resident deposits accounted for 47 percent of total liabilities while banks balances were around 18 percent.
The share of Islamic banks operating in the State of Qatar amounted to about 26 percent of the total assets of the ten local banks by the end of August 2018, which is almost its share at the end of 2017.
The stability of oil prices in conjunction with the current account surplus are expected to improve the liquidity of local and foreign currency. This confirms the readiness of the Qatar’s banking sector to meet the growing demand for loans, both public and private.
Qatar’s financial sector, in particular, the banking sector has remained resilient, supported by sufficient capital buffers, low non performing loan ratio and healthy asset growth.
