Defying the global trends, Qatar’s banking sector is remaining healthy, with high capital ratios and a low level of delinquent loans. Low oil prices have imparted some pressure on deposit mobilisation. However, Qatari banks were able to mobilise funds through other sources without impacting much on the cost or availability of credit, HE Sheikh Abdullah bin Saud Al Thani, (pictured) Governor of Qatar Central Bank (QCB) has said.
In an interview to the Euromoney, ahead of its upcoming Qatar Conference in December, the central bank governor outlined the current strengths and advantages of Qatar’s banking sector, as well as the challenges he anticipates the nation’s economy will face in the coming period.
In relation to Qatar’s banking sector, Sheikh Abdullah is confident of its health and prospects. He noteed that, Qatar Central Bank’s recently-published financial stability report highlighted, the Qatari banking sector remained as one of the healthiest in the GCC region.
“In its recent Global Financial Stability report, the IMF has noted that financial Institutions in advanced economies face a number of cyclical and structural challenges. Weak profitability of the banks could erode the capital buffers overtime and undermine their ability to support growth,” said Sheikh Abdullah referring to the state of financial sector in the advanced economies.
“Contrary to this, the banking sector in Qatar has remained healthy overall, with high capital ratios and a low level of delinquent loans.”, he said.
Sheikh Abdullah provided a number of metrics to demonstrate the health of the sector. He noted that, in 2015, return on average assets (RoAA) stood at 2 percent, while return on average equity stood at 16.2 percent. The central bank’s work in implementing the Basel III framework since 2014 and also strengthening macro-prudential measures to promote financial stability have played a key role in ensuring sustainable economic growth. Going forward, creating a conducive financial environment to support economic diversification while promoting monetary and financial stability remains the paramount goal for the Qatar Central Bank.
“The financial sector in Qatar has an important role to play in its transformation to an advanced country as envisaged in Qatar National Vision 2030. In order to fulfil the goals set by QNV 2030, during 2013, QCB implemented a Strategic Plan (2013-16) in coordination with Qatar Financial Markets Authority (QFMA), and Qatar Financial Centre Regulatory Authority (QFCRA) to enhance the regulation, expand macro prudential oversight and to strengthen financial market infrastructure, among others,” he noted. Qatar Central Bank is the co-host of The Euromoney Qatar Conference 2016.
