Interview: Abdulla Mubarak Al Khalifa
Where do you identify the primary drivers of credit expansion in the banking sector?
ABDULLA MUBARAK AL KHALIFA: Now that the 2022 FIFA World Cup is behind us, Qatar is entering a new phase of growth by focusing on expanding its liquefied natural gas (LNG) capacity through the North Field – the world’s largest non-associated gas field. This project involves the addition of six new LNG trains, making it one of the largest capital expenditure and industrial engineering projects globally. The sector stands to benefit by facilitating credit to contractors engaged in project development and execution, and funding projects in the downstream petrochemical industries. The broader economy can expect to see positive effects from the LNG expansion.
In addition, the country remains committed to diversification efforts aligned with Qatar National Vision 2030. Private sector growth will be sustained through systemic changes, initiatives supporting small and medium-sized enterprises, the promotion of foreign direct investment, labour reforms and the ongoing process of granting permanent residency to qualified individuals.
How can large banks support Qatar and the region’s infrastructure diversification strategies?
AL KHALIFA: Qatar National Vision 2030 aims to transform the economy from a reliance on hydrocarbons to a knowledge-based model, focusing on human, social, economic and environmental development. Achieving these goals requires an unprecedented surge in infrastructure investment across all sectors.
Financial institutions play a crucial role as intermediaries in supporting this diversification, offering necessary funding and liquidity for project execution. Large banks, with their strong balance sheets, top-tier ratings and robust capitalisation, can lead in originating funding and structuring customised solutions for project participants. Their significant international presence allows them to provide thought leadership and facilitate connections between customers and opportunities.
To what extent can new technology and digitalisation transform the way banks operate?
AL KHALIFA: The sector faces constant change driven by shifts in regulations, customer behaviour, and the emergence of new competitors such as financial technology, big tech and non-bank players. This dynamic landscape challenges traditional banking operations, leading to technological disruption and financial disintermediation. Innovation driven by new technologies and digitalisation can significantly impact the banking sector’s bottom line by creating new revenue opportunities and improving operational efficiency. This not only extends the banks’ presence, but also nurtures existing relationships while enhancing their offerings.
Digitalisation can be strategically deployed in various business-driven areas, including wealth management, bancassurance and customer-centric payment systems. Simultaneously, support- and control-related functions can benefit from automation, artificial intelligence integration and machine learning to enhance efficiency and risk management. Leveraging data and analytics also provides opportunities to identify new customer needs and offer innovative business solutions.
What does the mergers and acquisition (M&A) landscape indicate about regional banking competition?
AL KHALIFA: In recent years GCC banks have seen an increase in M&A activity. Fragmented banking markets are consolidating as smaller institutions lack the strength and capital for large-scale projects and investment spending. In addition, overbanked markets provide opportunities for synergies, optimising efficiency and capital allocation. The resulting consolidation has given rise to national champions with stronger balance sheets and capital reserves, and more distinctive branding. This trend suggests a future characterised by fewer major players, boosting pricing power, product quality and customer service. Such banks will define growth strategies for expansion regionally and beyond.
