Arab News, Monday, Jan 16, 2023 | Jamadi Al Thani 23, 1444
Qatari banks to build more profits in 2023: Report
Banks in Qatar are expected to amass profits and bolster their capital and
liquidity positions in 2023, driven by a more accommodating global and regional
climate, post the successful completion of the FIFA World Cup, MEED reported,
According to the report, Qatari lenders had
immense tournament-linked lending opportunities that began years ago, and it
will help them gain more profits in 2023.
“For the full year 2023, we’re expecting sector
average profitability metrics to actually be slightly higher than pre-pandemic
levels,” said Redmond Ramsdale of Fitch Ratings.
The MEED report further noted that credit rating
agencies see the banking sector in Qatar having guarded optimism in 2023, as
their strong provisioning levels will help them maintain a good run for the
“Our sector outlook for the Qatari banking sector
is neutral. That's supported by what we’re expecting, which is a reasonable
operating environment for the banks for this year,” said Ramsdale.
He added: “We’re expecting sector credit growth of
about 4 percent this year, roughly in line with other Gulf Cooperation Council
According to the report, domestic liquidity
conditions are expected to help reduce Qatari banks’ reliance on external
funding, which is widely considered one of the main structural weaknesses in the
country’s banking sector.
“The Qatari banking sector is the most dependent
in the whole GCC on non-domestic funding. That has come down moderately, with
improved liquidity conditions in Qatar, which is supported by higher oil
prices,” added Ramsdale.
The report, however, noted that the banking sector
in Qatar may face some challenges. This could be due to the oversupply of office
space and commercial real estate in the country, as most of the banks have high
exposure to the real estate sector.