Qatar banks confident in future growth

 20 Jul 2017 - 0:57

Qatar banks confident in future growth
People removing cash from ATMs in Qatar (Reuters)

By Satish Kanady / The Peninsula

A vast majority of banks in Qatar believe that systemic risk in the country’s banking sector will decrease or remain the same in the current year. A ‘risk perception survey-2017’, conducted by Qatar Central Bank (QCB), found almost all the banks expressing confidence in the financial stability of the country’s banking sector.

“Around 70 percent of the respondent banks opined the systemic risk in the banking sector will decrease or remain the same in the current year and the year ahead’, the QCB said in its survey conducted as part of its eighth Financial Stability Review.

The perception of the respondent banks on credit and market risk also indicate a higher majority expect the risk levels will either decrease or remain at the same level during 2017 and 2018. On then liquidity risk, the opinion is equally distributed on positive and negative perception.

The Survey also sought the banks to rank the key global and macro-economic risks factors that have impacted Qatar financial system according to their opinion. The results prove that majority of banks ranked ‘low oil prices’ among the top 2 higher risk events during last year, current year and the year to come. In addition, around 40-60 percent of banks ranked “geopolitical risk” among top 2 risk event in the current year and in 2018.
Majority of the respondent banks has considered all other risk events as comparatively lower significance.

The survey captured banks perception on the major risk events from the given set of events pertaining to credit, liquidity, market and operational risks.

Even though the respondent banks perception is not unique as the perception on top 1 risk varies across the banks, 40-60 percent of respondents opined default from real estate developers and contractors are considered as major risk among the credit risk events for 2017 and 2018.

Among liquidity risk, withdrawal by wholesale depositors is considered as top 1 risk by 40-60 percent of the respondents. Interest rate shock is considered as top 1 market risk event by 20-40 percent of respondents.

A majority of the banks responded risk from cyber world will be the major operational risk in the current and the year ahead.

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