Qatar’s banking sector remains “safe, sound and solid”; HE the QCB Governor Sheikh Abdulla bin Saoud al-Thani said and noted the central bank expects the country's banking sector to register sustainable growth, supported by favourable macroeconomic environment in the post pandemic era.
The Government and QCB took proactive steps to contain the impact of the Covid-19 pandemic, with a particular focus on support for small and medium enterprises, Sheikh Abdulla said in KPMG’s ‘Qatar Banking Perspectives 2021’.
A distinct part of these measures included injecting capital into systemically important sectors, thereby to an extent, neutralising the short-term impact on the financial market.
“It is important that our banking sector has sufficient space to perform its intermediation function, while addressing the unfolding risks. The sector has a high capital cushion level while the loan delinquency levels are low. At the same time, liquidity improved as banks were able to obtain funds from both external and domestic sources.
“Overall, the banking sector in Qatar remains safe, sound and solid,” Sheikh Abdulla said.
On QCB’s priorities in the short, medium and long term to further strengthen the local banking sector, he said “recent projections by the IMF signal a gradual economic recovery in 2021, though the recovery appears to be uneven.
“Concerted efforts on vaccination and other support measures facilitated Qatar’s economy to rebound back to normalcy. Given the strength of our banking system, the supportive measures initiated by QCB will make the sector resilient enough to withstand pandemic-induced stress.”
Sheikh Abdulla said, “QCB’s strategy and priorities are broadly based on the framework provided in our Second Strategic Plan (SSP). The focus of SSP has been to create a regulatory framework that fosters growth, promotes innovation and financial technology whilst dealing with the issues of cybersecurity.
“On the regulatory front, in the short term we are focusing on updating the Basel requirements, IFSB criteria and governance structure. In the short to medium term, we are focusing on enhancing the liquidity structure of the banking sector, with an emphasis on stable financial resources and mitigating foreign currency and market risks.
“The management and mitigation of credit risk in co-operation with Qatar Credit Bureau and consolidating Shariah-compliant criteria for Islamic banks are also in the pipeline. In the long term, taking on board the evolving domestic and global macroeconomic developments, QCB will be focusing on strengthening the financial sector infrastructure as envisaged in the Qatar National vision 2030.”
About the biggest challenges and learnings he had observed during the pandemic (over the last 18 months, the QCB Governor said, "A year and half into the pandemic, global economies are still grappling with its negative impacts while growth prospects remain uncertain. With comprehensive support measures and an efficient vaccination rollout, Qatar’s economy is back to normalcy in almost all sectors.
“Several lessons emerged from the Covid-19 crisis. The pandemic necessitated the accelerated implementation of technology in work operations and services. Fintech has become a bigger enabler to the financial sector industry. Central banks experienced challenges in upgrading the risk management framework to address the plausible risk from the alignment of technology with the financial sector industry.
“The mitigation of operational risks to ensure business continuity became issues of paramount importance. Nevertheless, the major global lesson from the Covid-19 crisis is that investments in public health infrastructure must be continuously maintained to safeguard economies and protect human capital from this type of health crisis in future.”
The Government and QCB took proactive steps to contain the impact of the Covid-19 pandemic, with a particular focus on support for small and medium enterprises, Sheikh Abdulla said in KPMG’s ‘Qatar Banking Perspectives 2021’.
A distinct part of these measures included injecting capital into systemically important sectors, thereby to an extent, neutralising the short-term impact on the financial market.
“It is important that our banking sector has sufficient space to perform its intermediation function, while addressing the unfolding risks. The sector has a high capital cushion level while the loan delinquency levels are low. At the same time, liquidity improved as banks were able to obtain funds from both external and domestic sources.
“Overall, the banking sector in Qatar remains safe, sound and solid,” Sheikh Abdulla said.
On QCB’s priorities in the short, medium and long term to further strengthen the local banking sector, he said “recent projections by the IMF signal a gradual economic recovery in 2021, though the recovery appears to be uneven.
“Concerted efforts on vaccination and other support measures facilitated Qatar’s economy to rebound back to normalcy. Given the strength of our banking system, the supportive measures initiated by QCB will make the sector resilient enough to withstand pandemic-induced stress.”
Sheikh Abdulla said, “QCB’s strategy and priorities are broadly based on the framework provided in our Second Strategic Plan (SSP). The focus of SSP has been to create a regulatory framework that fosters growth, promotes innovation and financial technology whilst dealing with the issues of cybersecurity.
“On the regulatory front, in the short term we are focusing on updating the Basel requirements, IFSB criteria and governance structure. In the short to medium term, we are focusing on enhancing the liquidity structure of the banking sector, with an emphasis on stable financial resources and mitigating foreign currency and market risks.
“The management and mitigation of credit risk in co-operation with Qatar Credit Bureau and consolidating Shariah-compliant criteria for Islamic banks are also in the pipeline. In the long term, taking on board the evolving domestic and global macroeconomic developments, QCB will be focusing on strengthening the financial sector infrastructure as envisaged in the Qatar National vision 2030.”
About the biggest challenges and learnings he had observed during the pandemic (over the last 18 months, the QCB Governor said, "A year and half into the pandemic, global economies are still grappling with its negative impacts while growth prospects remain uncertain. With comprehensive support measures and an efficient vaccination rollout, Qatar’s economy is back to normalcy in almost all sectors.
“Several lessons emerged from the Covid-19 crisis. The pandemic necessitated the accelerated implementation of technology in work operations and services. Fintech has become a bigger enabler to the financial sector industry. Central banks experienced challenges in upgrading the risk management framework to address the plausible risk from the alignment of technology with the financial sector industry.
“The mitigation of operational risks to ensure business continuity became issues of paramount importance. Nevertheless, the major global lesson from the Covid-19 crisis is that investments in public health infrastructure must be continuously maintained to safeguard economies and protect human capital from this type of health crisis in future.”
