Interview: Sheikh Faisal bin Abdulaziz bin Jassem Al Thani

How is the banking sector responding to low levels of domestic deposits? 

SHEIKH FAISAL BIN ABDULAZIZ BIN JASSEM AL THANI: The market has seen a contraction in the level of deposits available domestically, and this has led to upward pressure on interest rates. Despite this, we continuously seek to globalise our liquidity management capabilities in order to minimise our dependency on any single geographical market. From a funding perspective, Ahli Bank’s growing geographical diversification in recent years has helped us maintain relationships with some of the largest global institutions, thus ensuring our access to stable medium-term sources of funding.

What is your outlook for further developing Qatar’s participation in international debt markets?

SHEIKH FAISAL: Qatar’s financial sector has been very active in international debt markets in recent years as banks plan ahead for the new Basel III regulations. Ahli Bank’s debut bond issue in 2016 of $500m as part of our Euro Medium Term Note Programme was successful and 2.4 times oversubscribed. Middle East investors took up the largest share at 55%, followed by Asia with 20%, the UK with 15%, the rest of Europe at 6% and others at 4%. Also in 2016 the government of Qatar launched its debut sovereign bond issue, which saw high demand and reinforced ongoing investor appetite for the country and its National Vision 2030. Debt markets globally will continue to see increased activity as the Basel III regulatory environment changes the way banks operate in the future. Qatar’s financial sector benefits from strong regulatory support from Qatar Central Bank through its determination to maintain and enhance an already vibrant and disciplined sector of the country’s economy. In the medium term, irrespective of any recovery in oil prices, we expect to see continued growth in bond issuance as a tool to manage funding requirements for many Qatar-based businesses across a range of sectors. International credit rating agencies have predicted that growth across the GCC will be subdued in 2017, but Standard and Poor’s has given Qatar a stable outlook for the year.

In which sectors do you see the greatest potential to support Qatar’s economic diversification?

SHEIKH FAISAL: The hydrocarbons sector is expected to continue being the dominant contributor to GDP, albeit with a reduced share. Infrastructure developments will have a cascading effect on the prospects of all downstream sectors related to contracting, while retail and fast-moving consumer goods can also be expected to benefit. The hospitality sector is also forecasted to show growth considering the government’s focus on tourism, conferences, exhibitions and the 2022 FIFA World Cup.

How is the increasing demographic of low-income migrant workers impacting retail banking?

SHEIKH FAISAL: We have seen significant growth in our retail and private banking franchises in recent years, as we focus on the needs of all our customer segments by launching new products and widening the services offered through our branch ATMs. In order to meet the needs of low-income migrant workers and support the wage protection initiative, we launched a payroll card proposition which enables employers to pay monthly salaries below QR6000 ($1650) directly to the employee’s Ahli Bank debit card, usable inside and outside Qatar. Employees also benefit from no monthly charges, no minimum balance requirements and free use of all Ahli Bank ATMs. Furthermore, our user-friendly technology offers product information and selectors designed to help customers choose the right products. Additionally, we have cash and cheque deposit functionality at our branch ATMs, a 24/7 contact centre, online banking services and a mobile banking application.