The Islamic Finance Handbook: A Practitioner's Guide to the Global Markets

23QatarFinance Sector Overview

Steve Troop

Advisor to the Chairman and Board of Directors, Barwa Bank

These are exceptional times for Qatar's financial services sector. It has developed rapidly, showing growth year after year, against the turbulent backdrop of the global financial crisis, and it is one of the largest contributors to the country's economy, second only to the hydrocarbon industry.

Qatar was recently named the Middle East's most competitive market by the World Economic Forum, and it is set to be upgraded from “frontier market” to “emerging market” status by the MSCI stock index in May 2014.

The Qatari financial services sector is very well capitalized and complies with Basel 3 requirements easily. The sector enjoys a robust regulatory framework and a history of strong government support.

Although asset growth was relatively slow in 2013, it accelerated in the second half of the year, particularly the fourth quarter as infrastructural project momentum built. Furthermore, Qatar's financial sector is in robust health in terms of low levels of nonperforming loans and very positive provision coverage ratios of these loans at all banks.

An increasing trend is the internationalism of Qatari banks, driven by the success of Qatar as its influence becomes global. In 2013, the country witnessed the completion of a number of successful acquisitions, including Qatar National Bank in Egypt, the Commercial Bank of Qatar in Turkey, and Masraf al Rayyan's acquisition of the Islamic ...