The Qatar Financial Centre of Regulatory Authority (QFCRA) regulated financial institutions have registered around 13 percent rise in their total assets which increased to QR44bn in 2020 compared to QR39bn in 2019.
The total assets have risen by around 51 percent since 2018, according to a report released by PwC. The growth in assets shows that Qatar Financial Centre (QFC) and QFCRA have built a robust business environment that continues to attract foreign investments, despite macroeconomic uncertainty.
“QFCRA reported robust 2020 financial and operational results, including an increase in new license issues of 63.7 percent as compared to 2019, underscoring confidence in the potential for future growth,” said PwC in its ‘Qatar’s Banking Sector report FY2020’ report released, yesterday. “The rapid growth of assets is especially reflected in the rise of the total loans and advances, which increased from QR18.2bn as at December 31, 2018 and from QR25.8bn as at December 31 2019 to QR29.8bn as at December 31, 2020,” it added.
The data highlights the core business and nature of the lending activity of the QFCRA’s regulated financial institutions, which predominantly serve clients by lending loans. The proportion of loan and advances over total assets is at 68 percent at the end of December 2020, while an additional 24.1 percent is represented by total investments over total assets.
“QFC continues to attract organisations from a wide range of industries. Despite pandemic-induced headwinds QFC experienced growth of its financial services and non-financial services sectors. With QFC’s growth was bolstered by new types of licenses being issued, such as fintech start-ups and scale-ups, a new legal service policy supporting licensed law firms to work with foreign clients, and new regulations enabling financial institutions establish a representative office in Qatar,” said Ahmed AlKiswani, Regional Financial Services Partner, PwC Middle East.
QFCRA’s regulated financial institutions have seen an increase of the net interest margin (NIM), as the interest yield decreased less than the interest costs, therefore improving profitability.
The aggregated NIM of the QFCRA’s regulated financial institutions increased from 1 percent as at December 31, 2018, to 1.7 percent as at December 31, 2020, while the interest yield decreased from 4 percent as at December 31, 2018 to 2.8 percent as at December 31, 2020. The increasing margins positively impacted the aggregated Return on Assets of the QFCRA’s regulated financial institutions, increasing from 0.6 percent as at December 31, 2019 to 1 percent as at December 31, 2020.
