Qatar's banking sector remains healthy with high capital ratios and a low level of delinquent loans despite the impact of low oil prices, according to the governor of the country's central bank.
Sheikh Abdullah Bin Saud Al Thani said in an interview ahead of the upcoming Euromoney Qatar Conference in December, that he is confident of the sector's health and prospects.
He said the Qatar Central Bank’s recently-published financial stability report highlighted that the Qatari banking sector remained one of the healthiest in the GCC region.
“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,” he said.
“Contrary to this, the banking sector in Qatar has remained healthy overall, with high capital ratios and a low level of delinquent loans. Needless to say, 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 said that, in 2015, return on average assets (RoAA) stood at 2 percent, while return on average equity stood at 16.2 percent.
Going forward, he said creating a conducive financial environment to support economic diversification while promoting monetary and financial stability remained the paramount goal for the Qatar Central Bank.
He also said the Central Bank would seek to continue to stimulate the private sector, encouraging the growth of SMEs and encouraging data protection.
“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,” he added.
His comments come as Qatar's foreign trade surplus shrank by 25.8 percent from a year earlier to QR8.8 billion ($2.42 billion) in September, according to data from the Ministry of Development Planning and Statistics.
The surplus slumped from more than QR11.9 billion in the year-earlier period because of low natural gas and oil prices. Exports of petroleum gases and other gaseous hydrocarbons fell 13.5 percent to QR11.4 billion, according to the data.
Qatar Central Bank is the co-host of The Euromoney Qatar Conference 2016, which will bring together leaders from government and enterprise across Qatar, as well as international bankers and financial experts from December 6-7 in Doha.
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