THE banking system in Qatar remains firm and strong despite challenges created by COVID-19 pandemic. The joint coordination of all the stakeholders in the country ranging from public authorities, public and private institutions, have contributed to ensure stability of Qatar banking sector.
According to PwC’s “Qatar Banking Report” for first quarter (Q1) of 2020, the aggregated total assets of the eight listed commercial banks in Qatar, over the first quarter, grew QR29bn, or 1.8 percent compared to fiscal year 2019 to reach QR1.65trillion.
The bank’s aggregated loans and advances reached QR1.16 trillion, growing 23.7 percent considering the three-year period to Q1, 2017. The aggregated profits of the eight listed commercial banks showed a small decline of 1 percent on March 31, 2020 compared to Q1, 2019, which resulted from increased expenses mainly driven by a short-term raise of net impairment losses on loans and advances to customers.
In Qatar, Islamic banks continued to boast higher utilisation of assets, with a loan-to-deposit ratio greater than conventional banks. Qatari Islamic banks boasted a higher ratio of 96.8 percent during Q1-2020 as compared to 90.0 percent in the case of conventional banks, according to report by Kamco Invest. Qatari Islamic banks have a much higher utilization of deposits as against some other regional lenders that have a higher ratio for conventional banks. Net Interest Margins for Islamic banks in Qatar stood at 2.7 percent as compared to 2.6 percent for conventional banks during the quarter, noted the report.
The eight listed commercial banks’ aggregate loans and advances to customer deposits ratio stood at 104.4 percent as at March 31, 2020, increasing by 0.84 percentage points from its corresponding value as at December 31, 2019, and by 2.44 percentage points from 101.9 percent as at March 31, 2017.
The banking system is part of Qatar’s growing economy which has successfully overcome COVID-19 challenges. The economy has also overcome the challenges posed by unjust blockade imposed on Qatar by siege countries. A recent report issued by Qatar Chamber in June revealed that more than 47,000 new companies have been established in Qatar during the years of blockade, in addition to attracting more foreign investments in light of the availability of legislation, facilities and incentives provided by the State to attract foreign investments.
The strong banking system reflects the prudent economic management by the State of Qatar and the Qatar Central Bank despite the challenges associated with COVID-19.
