(MENAFN- The Peninsula)
Deepak John
|
The Peninsula
Doha, Qatar: Qatar has been following the Qatar National Vision 2030 long-term development plan, which outlines the objective of economic diversification, with financial services – including banking – playing a pivotal role in this endeavour.
The key banking sector indicators have registered growth in October this year compared to last year. The total domestic credit of commercial banks soared by 6.4 percent year-on-year to QR1.3 trillion in October 2024 and the total assets of commercial banks operating in Qatar have increased by 3.5 percent to QR2 trillion in the same period according to official data released by Qatar Central Bank (QCB).
The key highlights from October 2024 Monthly Monetary Bulletin showed that there was a surge of 5.5 percent in the total domestic deposits on yearly basis to reach QR842.7bn in October this year.
QCB post further stated that the total broad money supply (M2) increased by 1.7 percent to reach QR733.5bn in October 2024 on a year-on-year basis.
The banking sector is undergoing a transformative shift, adapting to global economic trends and embracing technological advancements. This evolution is marked by a commitment to risk management, FinTech innovation, and international standards, positioning the sector for sustained growth and stability.
The Third Financial Sector Strategic Plan prioritises banking as one of its four strategic pillars, alongside insurance, capital markets and the digital ecosystem. Three growth areas have been selected for banks: tailored finance, specialised advisory services, and digital banking and payment services. At the same time, the plan sets foundational targets of enhanced regulatory measures and efficiency, developing talent and capabilities for the sector.
Furthermore, specific numerical targets have been established. By 2030 the aim is for the financial services sector to contribute some QR84bn ($23bn) to GDP, with the sector achieving a compound annual growth rate of 4.7 percent. In terms of commercial credit, by 2030 the plan aims for 77 percent of this going to private companies with 7 percent of the total going to SMEs.
Diversification is therefore not only a target for the economy as a whole, but for the banking sector as well. Tailored financing includes new product launches, both in conventional and Islamic banking, while specialised advisory services include developing non-interest revenue and overseas expansion.
Savings and investment products for foreign residents are also encouraging Qatar's many foreign residents to take out mortgages and investment in the country to deepen their involvement in the local economy.
Consistent with this vision, the QCB published a series of long-term strategies with the release of the Third Financial Sector Strategic Plan. This plan for the sector aligns with and complements the broader goals of the (NDS-3).
The NDS-3 outlines seven strategic national objectives for the coming period, ranging from sustainable economic growth, to quality of life and societal cohesion.
The achievement of sustainable economic growth hinges on diversifying away from hydrocarbons, with a number of clusters proposed for this purpose. These clusters are further categorised into growth, enabling, resilience and future clusters, with financial services seen as one of three enabling factors.
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