Large foreign banks and bigger local lenders likely to benefit most from investments
Qatar will spend about $57 billion over the next decade on infrastructure including stadiums to support the soccer World Cup in 2022, which will boost lending at the country’s banks, Moody’s Investors Service said.
In a report emailed today, Moody’s analyst Elena Panayiotou said: “We expect all Qatari banks to benefit from stronger economic activity and higher credit demand over the next 12 years.”
The spending will create long-term business growth opportunities for the banks and “enhance franchise development in their domestic market,” she said.
The country plans to spend $4 billion on the stadium construction and refurbishment program. A new 200,000 population city called Lusail, north of the capital, is scheduled to be built over the next decade and will feature the stadium that hosts the World Cup final.
Qatar expects to construct a rail and metro network, costing more than $25 billion, in Doha and extending to cities outside the capital.
Qatar’s overall banking assets of $129.4 billion at the end of 2009 represented about 130 percent of its gross domestic product, which is a low ratio compared with other developed markets, Moody’s said.
Large foreign banks based in Qatar and the bigger local lenders led by Qatar National Bank SAQ are likely to benefit the most from the investments, according to the report.
Qatar, the world’s biggest liquefied natural gas exporter, is already spending billions of dollars on property, financial services and aviation. Its economy is poised to grow 16 percent in 2010 and 18.6 percent in 2011, according to the Washington based International Monetary Fund.
Securing longer-term funding will be a key challenge for Qatari banks as the country invests in infrastructure, Moody’s said. This will probably boost issues of longer-term bonds in international markets to address maturity mismatches, according to the Moody’s report.