(MENAFN- Gulf Times) Local lenders see lower credit risks in Qatar's banking sector next year even as they have expressed confidence in its financial stability, QCB said in a report.
Qatar's banks opined that systemic and market risks in the sector might decline this year and in 2019, it said.
Participating in a QCB survey, majority of the local banks felt that overall credit risk either decreased or remained the same in 2017.
'More than 90% of the survey respondents (banks) expressed that the confidence in the financial stability of the banking sector has increased, QCB said in its 9th Financial Stability Review.
However, a large percentage of banks opined an increase in credit risk this year, 'but would lower again in 2019.
Systemic and market risks may decline in 2018 and 2019 as opined by a majority of the banks.
With regard to liquidity risk, a higher percentage of banks opined the reverse for 2018. However, more than two thirds of the banks opined the risk from liquidity will reduce in 2019.
The survey also sought the banks to rank the key global and macro-economic risks factors that have impacted Qatar's financial system from a given list of major vulnerabilities.
Geopolitical issues is considered as the 'major risk as opined by a 'good majority of banks in 2017.
They also opined that the risk level from this vulnerability may continue in the current year (2018) as well.
Risk from lower oil prices, which came as the topmost risk in the last year survey, is expected to be reduced in the coming years.
'All other risk events are considered to have comparatively lower significance by the respondents, QCB said.
The survey also captured banks perception on the major risk events from the given set of events pertaining to credit, liquidity, market and operational risks.
Between 60% and 80% of the Qatari banks opined that they consider risk from real estate developers and contractors as the 'major risk from the given list of credit vulnerabilities, QCB noted.
However, a majority of the banks responded that the risk level will decrease or remain the same in 2019.
With regard to liquidity and market risk, banks' opinion differs in choosing the top most risk.
'Increase in vulnerability on account of ‘reduced liquidity flow from international market' may increase in 2018 as opined by a larger number of banks, QCB said.
Risk from cyber world continues to top the major risks in this year's survey. It also figures among the list of operational risks, Qatar Central Bank said.
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