Qatar Central Bank (QCB) Governor Sheikh Abdullah bin Saoud al Thani, has said that the banking system in Qatar has not been affected by the Saudi-led siege. He dismissed reports which said that the financial system was affected by the siege and added that these reports aimed at influencing customers domestically and abroad.
“Pressure tests QCB runs regularly have proved that the effect of even the strictest siege measure on the sector is minimal and there is no high risk, thanks to sufficient capital and the low rate of non-performing debts as well as the sector’s liquidity and profitability,” Sheikh Abdullah said.
He informed that QCB is in regular touch with the banks and monitored the developments. This helps in advising banks to deal with the situation and prepare for any emergency situation in the future.
Though the government and the QCB are capable to support banks through immense sovereign fund and large international reserves, Sheikh Abdullah said, due to precautionary considerations, neither QCB nor the government should be the lender of first resort but rather the last resort.
Sheikh Abdullah pointed out some examples that prove the strength of the banking system in the country. The local liquidity at the end of July 2017, two months after the beginning of the cruel siege, grew by more than 8.3 percent over July last year, an increase of 2.4 percent from May before the siege began. This is in addition to a 1.7 percent rise in the monetary base at the end of July compared to the end of 2016, he said.
He also noted that the total assets of commercial banks in the country grew by 10.9 percent at the end of July over the same period in 2016 to cross QR1.3 trillion.
Customers’ deposits reached QR772.5 billion during the same period, an increase of 12.8 percent over the same period last year. They also grew by more than 1.3 percent compared to last May despite a 15 percent fall in non-resident deposits.
Sheikh Abdullah also pointed out the credit facilitations provided by commercial banks to their customers during the period by 11.6 percent compared to the same period last year.