Qatar Banking Sector Resilient to Covid-19
The Qatar trade Summit is held virtually on 24-25 November 2020 under the theme “Transcending into a self- reliant economy amidst COVID-19”
Dr. R. Seetharaman, CEO of Doha Bank spoke on Key note “Qatar Banking Growth 2020: Reflecting on Qatari resilience” on 24th Nov 2020.
Dr. R. Seetharaman gave insight on Qatar economy. He said “Qatar economy expected to contract by 4.5% in 2020 and recover by 2.5% in 2021. On the hydrocarbon sector, the first phase of the North Field expansion project will increase Qatar’s LNG production capacity from 77 million tons per annum (Mtpa) to 110 Mtpa. The second phase of the expansion project, called the North Field South Project (NFS), is set to further boost Qatar’s LNG production capacity from 110 Mtpa to 126 Mtpa. This could contribute to both economic growth and lending in Qatar. Qatar trade exceeded $100bn in 2019 with Asia contributing 80% of its exports.”
Dr. R. Seetharaman highlighted the developments in Qatar during COVID-19. He said “Qatar sold $10bn bonds in April 2020. It offered interest equivalent to 300 basis points (bps) over U.S. Treasuries for a $2-billion five-year tranche, 305 bps over the same benchmark for a $3-billion 10-year tranche and 4.4% for the 30-year paper of $5billion. Qatar central came with various procedures to combat the risk of coronavirus COVID-19 pandemic. This includes the emergency procedures, Loans and liabilities of sectors affected due to procedures taken to combat the spread of COVID-19, Guarantees for local banks and National Guarantee Program to support the private sector. The Lending growth is close to 7% YTD till 3rd Quarter 2020. The Lending growth till 3rd Quarter 2020 in Government sector – 4.7%, Real estate- 4.1%, Consumption – 4.6%, Contracting -10%, Services -12.4%, Trading -12% and Deposit growth – 3.6%. The Money supply (M1, M2 and M3) has increased during the year. The Qatar Banking sector has demonstrated its resilience to COVID-19 on account of these measures.”
Dr. R. Seetharaman gave insight on non-hydrocarbon developments in Qatar. He said “The Hamad port opened in Sept 2017 has general cargo terminal with a capacity of 1.7 million tonnes annually. This has contributed to Qatar’s trade and infrastructure development. Qatar’s world-class free trade zones, Umm Alhoul and Ras Bufontas, offer opportunities and benefits for businesses seeking to expand and invest globally. Qatar free zone gives companies access to fast growing nearby markets in the Middle East, North Africa, Europe and Western Asia, and will contribute to the economic growth of Qatar and increase the diversification of the Qatari economy. Corporates in free zones can explore funding and Non-funding facilities from Banks. 8 Stadiums are planned for FIFA 2022, which had given boost to contract and project finance in Qatar.”
Dr. R. Seetharaman gave insight on reforms in Qatar. He said “The Law no 1 of 2019 regulate the investment of Non – Qatari capital opens way for ownership. Investment incentives include allocation of land. This has improved the investment climate in Qatar. In May 2020, the Public – private partnership law was introduced. It covered various PPP models including BOT Model. The Private sector is expected to leverage from this new law. In October 2020, Qatar has allowed foreigners to own property. Non-Qatari individuals could own properties in nine areas, up from three before, while the number of areas where foreigners may use real estate subject to usufruct has also been increased to 16, bringing the total number of areas designated for ownership and usufruct by non-Qataris to 25.This can give boost to property sector lending.”
Dr. R. Seetharaman highlighted on technology and development in Qatar. He said “Qatar FinTech Hub “QFTH”, which is co-founded by Qatar Development Bank (QDB) aims to develop the Fintech industry in Qatar, in accordance with the Qatar National Fintech Strategy created by Qatar Central Bank “QCB”, and to contribute and reiterate Qatar’s position as a leading international FinTech hub in the region, as outlined in the Qatar National Vision 2030. TASMU SMART Qatar program will serve as a platform for the realization of a digital economy and a smart future. It aims to transform Qatar into a world-class smart city that has the latest digital solutions to increase the standard of living and increase Qatar’s competitiveness, internationally.”