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Qatar’s banking sector ‘stable'

Moody's Investors Service has assigned Qatar’s rated banks a ‘stable outlook’, reflecting strong macro-economic conditions and improved bank franchises.

"The country's strong operating environment and high level of prosperity have brought new and better quality banking opportunities," says Moody's analyst Constantinos Kypreos.
A report by Moody’s also says that Qatar banks are enhancing their franchises by expanding retail and Islamic banking, and greater geographical diversification.

Challenges to the sector include increased competition from newly established and foreign banks, including those that will be based in the Qatar Financial Centre.

Other threats include credit and funding concentrations, the correction of the Doha Securities Market and the still-developing nature of the banks' risk management systems, said Moody’s.

“The Qatar Central Bank (QCB) aims to exercise sufficient prudential control and supervision of the banking sector and to harmonise Qatari banking regulations with international standards as well as address specific risk areas,” stated the credit ratings agency.

“Nonetheless, Moody's considers that there is scope for further improvements, in particular on the qualitative aspects of banking supervision and on upgrading risk-assessment capacity."

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