facebooktwittertelegramwhatsapp
copy short urlprintemail
+ A
A -
webmaster
Satyendra Pathak
Doha
Qatar’s eight publicly listed commercial banks weathered macroeconomic headwinds and demonstrated resilience throughout 2020 with growth of assets despite volatility caused by the COVID-19 pandemic and drop in oil prices, PwC in Qatar has said in a report released on Sunday.
According to PwC’s 2020 Qatar Banking Sector Report, the aggregated assets of the eight listed commercial banks regulated by the Qatar Central Bank (QCB) grew 7.3 percent to reach QR1.74 trillion at the end of 2020 as compared to 2019.
“The increase in assets is reflected in the 7 percent growth of total aggregated loan and advances that reached QR1.2 trillion. Such increases show that the lending activity remains healthy, driven by diversified sources of funding,” the report said.
Of the total assets as of December 31, 2020, the report said, Islamic banks’ market share was 20.5 percent (QR 357 billion), in comparison to the 79.5 percent (QR1.39 trillion) that was reported by the conventional banks.
“The total loans and advances of the eight listed banks totalled QR1.2 trillion as of December 31, 2020. The total market share provided by Islamic banks stood at 20.5 percent (QR246 billion), compared to the 79.5 percent (QR 953 billion) that was disclosed by the conventional banks as at 31 December 2020,” the report said.
In Qatar, the report said, institutions addressed volatility by remaining united and increasing collaboration between the public and private sector.
“The QCB played a vital role in the ecosystem, by combining supervision activities with a series of measures significantly mitigating economic volatility and assisting recovery across the private sector,” the report said.
For example, the report said, QCB offered repurchase facilities at a zero interest that helped banks to receive liquidity and reduce the interest and return rate for affected sectors, ultimately boosting their ability to repay the loans in the long run.
“The eight listed commercial banks have proactively responded to QCB’s support policies as well as revised their financial models based on emerging macro trends. Macro trends are reflected into the financial aggregated data reported by the eight listed commercial banks which show the resilience of the sector through volatility. Financial Year 2020 is marked by growth of assets, streamlined non-interest costs as well as an overall decreased profitability level,” the report said.
Commenting on the performance of listed Qatari banks in 2020, PwC Qatar Financial Services Leaders Burak Zatiturk said, “Measures introduced by QCB provided the much needed liquidity amid times of increased volatility. During 2020, the expansionary lending activity of listed banks is testament to market confidence in the business environment and the Qatari economy.”
With banks maintaining a consistent lending strategy despite a volatile market in 2020, Zatiturk said, “We can see signs of mid-to-long-term optimism for Qatar’s resilience, the evolution of its robust financial industry and GDP growth. In the near-term, we will see banks continuing to focus efforts on transformation, through the adoption of digital technologies, such as RegTech in order to future-proof their operating models.”
In addition to the strength and agility demonstrated by the eight listed commercial banks in Qatar, the report said, the Qatar Financial Centre (QFC) and the Qatar Financial Centre of Regulatory Authority (QFCRA) have built a robust business environment that continues to attract foreign investments, despite macroeconomic uncertainty.
QFCRA reported robust financial and operational results in 2020 including an increase in new licence issues of 63.7 percent as compared to 2019 underscoring confidence in the potential for future growth. Moreover, QFCRA’s regulated financial institutions reported total assets of QR44 billion in 2020, a rise of 12.8 percent as compared to 2019 and a significant 51.2 percent increase as compared to 2018.
“The growth in total assets is reflected in the rise of the aggregated loans and advances of QFCRA FIs. Total loans and advances grew from QR25.8 billion in 2019 to QR29.8 billion in 2020, with a growth rate of 15.5 percent in 2020 and 63.7 percent in the last three years. The aggregated total profits of QFCRA FIs witnessed an increase from QR240.2 million 2019 to QR443.5 million in December 2020, growing at a rate of 84.6 percent,” the report said.
“QFC is a fast-growing onshore financial and business centre in Qatar, supporting foreign businesses to set up in Qatar. In 2020, around 334 new licences were granted for organisations to operate in QFC. Organisations being licenced come from a wide range of industries represented by both financial and non-financial institutions such as sports, IT, finance and media and banks.
“QFC’s growth was bolstered by new types of licences being issued, such as fintech start-ups and scale-ups, a new legal service policy supporting licenced law firms to work with foreign clients, and new regulations enabling financial institutions to establish a representative office in Qatar. In addition to these recently implemented measures, QFC has several characteristics that are attracting foreign investors,” the report said.
PwC Middle East Regional Financial Services Partner Ahmed AlKiswani said, “QFC continues to attract organisations from a wide range of industries. Despite pandemic-induced headwinds, QFC experienced growth in its financial services and non-financial services sectors. QFC’s growth was bolstered by new types of licences being issued, such as fintech start-ups and scale-ups, a new legal service policy supporting licenced law firms to work with foreign clients, and new regulations enabling financial institutions to establish a representative office in Qatar.”
“Qatar’s financial industry has demonstrated its agility and resilience throughout 2020, supported by enabling regulations and central bank policies. The banking sector remains in a position of strength, ready to capitalise on new technologies and a diversified investor base, in order to continue to be a catalyst for economic development and growth,” the report said.
copy short url   Copy
07/06/2021
428