Doha, Qatar: The non-performing loan (NPL) ratio of Qatari banks is expected to decline to 3.4 percent in 2026-2027 which signals enhanced bank soundness and asset quality, attributable to improved credit risk management.
In a post on its X platform, Qatar Central Bank (QCB) noted that according to latest S&P outlook for the Qatari banks, the sector is set to remain resilient in this year. This growth is underpinned by solid economic expansion, improving asset quality, and supportive market fundamentals.
The strong coverage ratios (around 128 percent in September 2025) provide substantial cushion against potential credit deterioration.
A non-performing loan ratio decline signifies improving bank health and asset quality, resulting from factors like loan write-offs, better credit risk management, economic recovery, and regulatory actions, leading to reduced credit risk and increased financial stability.
It further said, the real GDP growth is projected to average 5 percent in 2026-2028, up from 2.7 percent in 2024-2025. This growth will have positive spillovers on the non-hydrocarbon economy and government revenues.
A supportive regulatory environment and steady private sector leverage will support banking resilience. Strong capitalisation continues to anchor financial stability, the S&P outlook noted.
The profitability remains sufficient to support internal capital generation buoyed by improving credit conditions. The banking system has sufficient liquid assets and a highly supportive government to withstand geopolitical challenges, it added.
Qatar Central Bank remains steadfast in its commitment to fostering leading and valuable initiatives by providing the necessary infrastructure and legislative support for the growth of the financial technology sector in the country, supporting companies within this sector to introduce innovative solutions, drive sectoral development, and enhance operational efficiency and innovation in banking services, aligned with national vision of the country.
In line with Qatar National Vision 2030, the country’s long-term development plan, the Third Financial Sector Strategy 2024-30 aims to boost innovation throughout the sector, enhance efficiency and investor protection, and contribute to efforts to unlock Qatar’s full economic potential.
The financial strategy is in line with the wider QCB Strategy 2024-30, which aims to strengthen the financial sector and enhance resilience to external shocks, both regionally and globally. The strategy seeks to help the sector adapt to market changes, with a focus on sustainable finance and the integration of ESG principles in regulatory frameworks, digitalisation and the adoption of artificial intelligence, and leveraging opportunities within fintech.
The strategy has four pillars – banking, insurance, capital markets and the digital finance ecosystem – with cross-cutting themes including governance and regulatory oversight; Islamic finance; digital innovation and advanced technologies; environmental, social and governance (ESG) and sustainability; and talent and capabilities.
For banking, the strategy calls for enhanced measures to promote transparency, accountability, and trust; enhanced efficiency, improved customer experience and innovation; and talent and capabilities to increase knowledge transfer and adapt to changing market conditions.
