QCB Governor: Banking, Financial System Steadfast Against Siege Arbitrary Measures

Doha, October 04 (QNA) - HE Qatar Central Bank (QCB) Governor Sheikh Abdullah bin Saoud Al-Thani reaffirmed that the State of Qatar's banking system is steadfast in the face of the arbitrary measures taken by the siege countries thanks to its strength and efficiency. Speaking to Lusail newspaper, HE the QCB governor described as false the circulated reports that the State of Qatar's banking and financial system was negatively affected by the siege saying that such reports aim to influence the customers of the banking system and those who deal with it domestically and abroad. HE Sheikh Abdullah bin Saoud Al-Thani said the pressure tests that QCB runs regularly proved that the effect of the most strict measures on the sector is minimal and has no high risk thanks to the sufficiency of capital and the low rate of non-performing debts as well as the sector's liquidity and profitability. He added that QCB has regularly met with banks and closely monitored the developments related to regulatory liquidity and liquidity with banks, due to the geopolitical risks and the current abnormal events and in line with the overall objective of financial stability. He pointed out that the bank is doing this as part of its duties in total prudential supervision, which helps in advising banks to deal with developments of the situation and helps in preparation for any emergency that may occur in the future. Although the government and QCB are able to support banks through the substantial sovereign fund and large international reserves that they have, HE Sheikh Abdullah bin Saoud Al-Thani said, but due to precautionary considerations, neither QCB nor the government should be the lender of first resort but rather the last resort, in line with the best international practices that the State of Qatar follows. He noted in this regard that QCB does not interfere in the liquidity management of any bank as long as it meets prudential requirements. HE the QCB governor said that a quick look at the latest declared monetary and financial developments domestically and internationally will show that these rumors are false and will indicate the strength and solidity of the State of Qatar's banking and financial system despite all the exceptional circumstances that the country has been subjected to because of the unjust siege. He mentioned some examples that prove the strength of the banking and financial system in the country, including that the local liquidity represented by the broad definition of monetary offering at the end of July 2017, almost two months after the beginning of the cruel siege, has grown by more than 8.3 percent compared to the end of July last year, an increase of 2.4 percent from May before the siege began, in addition to a 1.7 percent rise in the monetary base at the end of July compared to the end of 2016. Sheikh Abdullah bin Saoud Al-Thani noted that the total assets of commercial banks in the country grew by 10.9 percent at the end of July compared to the same period of 2016 to reach more than QR 1.3 trillion. The QCB governor said that customers' deposits reached QR 772.5 billion during the same period, an increase of 12.8 percent over the same period last year. They also grew by more than 1.3 percent compared to last May despite a 15 percent fall in non-resident deposits due to the withdrawal of their deposits from the Qatari banking system. He also highlighted the increase in credit facilitations provided by commercial banks to their customers during the same period by 11.6 percent compared to the same period last year. The year-on-year net profit to shareholders' equity amounted to more than 14 percent and 1.6 percent of total assets. The QCB governor said the capital adequacy ratio of national banks at the end of July was 15.6 percent compared to 14.8 percent at the end of July 2016. The average coverage ratio of liquidity at national banks during the same period was 132.3 percent compared to 122 percent at the end of July 2016. (QNA)