Qatar's liquidity improves after $9bn bond sale

DOHA: The availability of funds in the Qatari banking system, which earlier this year became a more serious issue than during the 2008 financial crisis, is improving after the country";s $9bn bond sale in May, Doha Bank Chief Executive Officer Dr. R Seetharaman said.

'The second quarter was an improvement compared to the first quarter, and the third quarter has also been following the right trend,” he said in a TV interview with Bloomberg Markets Middle East on Tuesday. 'We";re likely to see similar in the coming quarters.”, Bloomberg quoted him as saying.

Bank liquidity in the six-nation Gulf Cooperation Council, which includes the United Arab Emirates and Saudi Arabia, has been tightening as a more than 50 percent slump in crude oil prices since mid-2014 slows deposit growth and pushes governments to boost borrowing. The situation in Qatar became a bigger issue at the start of the year than it was in 2008, Seetharaman said in May, the same month that the government sold $9bn of Eurobonds in the Middle East";s biggest-ever bond issue.

Lenders in Qatar had experienced 'extraordinary stress” this year amid the tightening liquidity and were forced to adapt their businesses to the low-oil environment, Seetharaman said in May.”

'Banks were also facing a narrowing in net interest margins and higher interest expenses, he said. With the $9bn bond sale, the cost of funding is also coming down for banks,” Seetharaman said.

The Peninsula