Banking
From The Report: Qatar 2012
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Banking in Qatar has long been a robust business. The sector weathered the international credit crunch well and has since achieved double-digit asset growth, and leading players are establishing strong overseas positions as they grow out of a highly competitive local market. According to the Qatar Central Bank (QCB), in April 2012 the sector’s total assets stood at QR727.2bn ($199.7bn), up from QR587.6bn ($161.4bn) a year earlier, equivalent to 23.8% growth. Moreover, strong government backing means secure capital adequacy ratios are sometimes triple the Basel II requirements. The sector’s huge potential and focus on development projects provide the promise of continued business; indeed, most banks are bullish that assets, profits, loans and deposits will keep growing in 2013.

The chapter includes interviews with Sheikh Abdullah Saud Al Thani, Governor of QC); Sheikh Bandar bin Mohamed bin Saud Al Thani, CEO of Qatar Credit Bureau (Qatar CB); Abdul Hakeem Mostafawi, CEO of HSBC; and Sheikh Faisal bin Abdulaziz bin Jassem Al Thani, Chairman of Ahli Bank.

Articles from this Chapter

Overview

Onwards and upwards: The rapid growth seen in recent years looks set to continue
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With Qatar experiencing strong and protracted economic growth, built largely on the back of a globally significant hydrocarbons sector, banking in this Gulf state has long been a robust business. The sector weathered the international credit crunch well and has since achieved double-digit asset growth, despite more recent global financial woes, and leading players are establishing strong overseas positions as they grow out of a highly competitive local market. The sector enjoys strong government…

Analysis

International appeal: The sector is host to a diverse group of foreign players
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Key to Qatar’s crowded banking sector is its foreign bank branches. By year-end 2011, these lenders held QR32.2bn ($8.8bn) in assets, equivalent to a 4.8% share of the market, down from 7.7% in 2010. Nonetheless, foreign banks have achieved notable success in the country in the long run, with the segment achieving a 12.7% compound annual growth rate in assets between 2007 and 2010. MARKET LEADER: The leading foreign bank in terms of market share is HSBC Qatar, which in 2011 had assets of…

Interview

OBG talks to Sheikh Abdullah Saud Al Thani, Governor, Qatar Central Bank (QCB)
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Interview: Sheikh Abdullah Saud Al Thani Given the positive economic performance in 2011, what was the strategy behind the interest cut? SHEIKH ABDULLAH SAUD AL THANI: To support and sustain growth momentum in 2011, the QCB reduced its key policy rate – the Qatar Monetary Market Rate (QMR) for lending – by 50 basis points from 5.5% to 5.0% on April 5, 2011. It was further reduced by 50 basis points to 4.5% on August 11, 2011. The reduction was driven by the pressure of global developments…

Analysis

Rich pickings: A rundown of the sector’s major players
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With six local conventional commercial banks, four Islamic finance houses, seven foreign bank branches and a development bank, Qatar has a wide range of financial intermediaries. The conventional commercial banks are led by Qatar National Bank (QNB), which reported in October 2012 that its total assets had increased 25.3% since September 30, 2011 to reach QR351bn ($96.38bn). At the end of 2011 QNB’s total assets amounted to QR302bn ($82.9bn), according to its annual report. Meanwhile, its loans,…

Interview

OBG talks to Sheikh Bandar bin Mohamed bin Saud Al Thani, CEO, Qatar Credit Bureau (Qatar CB)
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Interview: Sheikh Bandar bin Mohamed bin Saud Al Thani Are you happy with the progress Qatar CB has made in minimising write-offs and defaults? SHEIKH BANDAR BIN MOHAMED BIN SAUD AL THANI: It is too early to express sentiment one way or the other. Qatar CB has now been operating under Qatar Central Bank for just over a year, and it will take another three-to-five years before we will be able to identify a significant impact on write-offs and defaults. I am happy that banks are now able to see customer…

Analysis

All change: Separation of Islamic finance and credit restrictions head the recent adjustments to the system
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Several important regulatory moves impacted Qatar’s banking system in 2011 within the framework of ongoing initiatives to reduce risk and household debt exposure while moving towards the long-debated goal of a single regulatory authority. The first of these major changes was a February 2011 regulation that obliged conventional banks to close their Islamic windows by the end of the year. The Qatar Central Bank (QCB) announced the move, immediately freezing conventional banks’ ability to open…

Interview

OBG talks to Sheikh Faisal bin Abdulaziz bin Jassem Al Thani, Chairman, Ahli Bank
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Interview: Sheikh Faisal bin Abdulaziz bin Jassem Al Thani What do you identify as the most significant impediments to industry consolidation? SHEIKH FAISAL BIN ABDULAZIZ BIN JASEEM AL THANI: It is unfortunate that we have seen limited merger and acquisition activity in the GCC, despite the cracks global economic performance has created in the market. In my opinion, the most significant barriers are threefold: lack of a visionary board, lack of capital market rules on mergers and acquisitions,…

Interview

OBG talks to Abdul Hakeem Mostafawi, CEO, HSBC
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Interview: Abdul Hakeem Mostafawi What reforms need to be addressed to facilitate further growth in real estate project financing? ABDUL HAKEEM MOSTAFAWI: The regulatory framework needs to be addressed in a way that examines the supply chain and takes into account all stakeholders. It is difficult to assess risk due to the ambiguities around financing. Real estate is a local banking activity, unless initiatives offer unique circumstances or a high level of government support. It is important to…