Moody's Affirms Qatari Banks Mitigated Risks Of Unexpected Shocks

Doha, Qatar: Moody's, a global credit rating agency, praised the resilience of Qatari banks, highlighting their growth and strong capital of Qatari banks, and their ability to face challenges.

This came in a recent report where it stated that banks in Qatar have strong liquidity coverage ratios, in addition to their ability to attract financial inflows through diverse deposits.

The report added that Qatari banks were primarily financed during the recent period through customer deposits, which accounted for approximately 52% of total assets by the end of June 2024; while adding that the deposits from government and government-owned entities were estimated at about 36% of total deposits in the same period.

Moody's also praised the success of Qatari banks in developing and attracting deposits from the domestic private sector while also building on foreign and international deposits.

It further highlighted the growth witnessed by the credit sector, which is in line with the country's economic growth trajectory, specifically credit directed to the private sector, which is expected to grow significantly during the current year. In this context, Moody's forecasts that private sector credit growth during the current year will range between 3% and 4%.

Moody's explained that a major role was played by the regulations issued by the Qatar Central Bank, which aimed at reducing the overreliance of Qatari banks on foreign financing, which contributed to supporting financial stability, and also made it possible to reduce the banks' foreign liabilities to 33% of the total liabilities at the end of June 2024.

It further expects that banks will shift towards a longer-term financing structure in a lower interest rate environment, noting that the banks' stocks of liquid assets amounted to about 24.7% of total assets at the end of March 2024, which provides a sound buffer against any market fluctuations or risks.

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