Qatari banks have proven their strength and role in the comprehensive economic development that the country is currently witnessing, as they contributed strongly to financing investment, commercial, industrial and tourism projects during the last period, and the budgets of the banking system in the country increased to reach record levels that topped the list of Middle Eastern banks in 2022.
Qatari banks were able to occupy advanced positions in the list, as Qatar Islamic Bank ranked 12th, while Commercial Bank ranked 18th, and Masraf Al Rayan ranked 20th.
The assets of the banking sector rose to nearly 2 trillion riyals until the end of last month, of which 482.9 billion riyals are the assets of Islamic banks, 1262.8 billion riyals are conventional banks, and 12.82 billion riyals are the budget of specialized banks. As for Arab and foreign banks, their budgets reached 35.88 billion riyals.
Qatari banks occupied advanced positions in the overall list of the 50 most powerful banks in the Middle East, led by Qatar National Group, which topped the list of the 10 most powerful banks, and the list of the 50 most powerful banks in the Middle East.
QNB Group topped the list of the 30 most powerful banks in the Middle East for the year 2022, which was issued by Forbes International.
The new classification comes from the global institution to confirm the strength of the banking system and Qatari banks and their occupation of the leading position thanks to the strength of their financial centers, the services and products they provide in the markets and their internal and external investments.
The group topped the list headed by Mr. Abdullah Mubarak Al Khalifa, CEO of the group, with a market capitalization of $51.9 billion, revenues of $14 billion, net profits of $3.6 billion, and assets of about $300.3 billion until the middle of the year.
It is the largest banking institution in the Middle East and Africa, and the second largest entity in the region by asset value after Aramco. The group is active in more than 31 countries within 3 continents, and the number of its employees exceeds 27 thousand employees across a thousand sites.
QNB Group acquired stakes in a number of financial institutions, including 20% in (Ecobank) based in Togo, 38.6% in the Jordanian Housing Bank for Trade and Finance, 40% in the Commercial International Bank in the Emirates, as well as about 100% in (QNB) Tunisia. . In April 2022, the bank allowed an increase in foreign ownership to 100%.
Strong rating of banks
The banking sector is one of the most vital sectors of the Qatari economy, and when the “Covid-19” pandemic hit the world, banks made sure that their economies remained strong by using measures such as postponing loan payments, debt restructuring and lending to key sectors.
Moody’s credit rating agency confirms the strength of the banking system in Qatar, and the ability of Qatari banks to deal with the challenges posed by the Corona pandemic. The agency added, in its latest report on Qatari banks, that the current situation of banks operating in Qatar and the strength of their financial centers supports the planned merger. Between Masraf Al Rayan and Al Khaleeji Bank, to form a strong banking entity, as the share of the new entity is expected to rise to 10% of the market.
Moody’s revealed that the new entity’s strong asset quality reflects the fact that its credit portfolio is dominated by major borrowers linked to a number of key sectors, the first of which is the government sector, and large private companies operating in state-sponsored projects.
The rating agency indicates that the merger with Al Khaliji raises the share of the new entity to 10%, and the merger works to make Al Rayan the second largest bank in Qatar and the largest Islamic bank in the country, and the capital will remain a source of strength for the merged entity, with expectations that the bank will maintain a high percentage of Total operating costs as credit growth will be largely funded by internal capital generation.
Enhance financial stability
The National Development Strategy of the State of Qatar affirms that there are four pillars of development. One of these pillars is the sustainability of economic prosperity. In this regard, one of the challenges mentioned in the Qatar National Vision 2030 is “choosing and managing a path that achieves prosperity and avoids economic imbalances and tensions.” Providing economic stability is a prerequisite for urging investors to make long-term commitments to expand the production base.
Although any economy is vulnerable to crises, chronic or long-term fluctuations such as violent financial turmoil can negatively affect economic activity. Perhaps Qatar is one of the few countries in which waves of fluctuations did not lead to undesirable consequences, as happened in some economies that are mainly linked to exports of natural resources. Therefore, the government realizes, through its national vision and development strategy, that if development slows down in the hydrocarbon resource sector, a sound macroeconomic policy that supports a stable environment will play a decisive role in the expansion and prosperity of non-hydrocarbon sectors.
In this regard, and in line with the state’s policy and the framework of its vision and strategy, the Qatar Central Bank seeks to enhance and maintain financial stability in Qatar by adopting a two-pronged policy:
The first axis is to prevent the system from being exposed to an unacceptable level of risk, and preventive measures emphasize the need to regularly monitor and supervise all banks and financial institutions, in order to speed up early detection of weaknesses in the financial system.
Despite the application of supervision and hedging, it is impossible to completely protect the financial system against all kinds of risks. Therefore, the second axis is based on remedial policies that seek to contain the crisis as soon as possible and prevent its spread.
On the other hand, the Qatar Central Bank achieves financial stability by creating an appropriate financial environment, in addition to preparing and monitoring indicators of solvency and financial soundness on a regular basis.
