DOHA: The crashing oil prices and Qatar’s reported decision to prioritise its proposed mega projects are unlikely to impact the asset quality or the profitability of banks in the country. Qatar’s banking sector is expected to grow by 14 to 15 percent this year, Dr R Seetharaman (pictured), Chief Executive Officer, Doha Bank, said yesterday.
Its’ true that oil prices have declined nearly 50 percent and there are reports of project shelving. But decline in crude prices is not going to shake Qatar’s economic stability as its revenue come from diverse sources, Dr Seetharaman noted.
Qatar has got strong revenue sources and they are sustainable too .The country’s Sovereign Wealth Fund is well in multiple market and multiple sectors. If you look at the latest GDP numbers, non-hydrocarbon sector represents over 50 percent of the country’s GDP. Going by IMF’s latest growth projects for Qatar, the country’s banking sector should grow by 14 to 15 percent”.
Doha Bank is synchronising with Qatari growth and we will allocate our resources in multiple forms, whichever model it is working on a sustainable way. Our market share in project financing is very strong we have strong cross-border operations. Doha Bank’s brand equity is very strong in the growth markets like Dubai, Abu Dhabi and India. “Whenever and wherever there are opportunities, we will put money into it. The price of oil is not an issue”, Doha Bank CEO said.
This doesn’t mean Qatar’s banking sector is not entirely without risks. On the 2015 market challenges, Dr Seetharaman said the banking model is fast changing across the world and Doha Bank is in the process of redefining its business model. He said the bank is looking to bring down its Non-Performing Loan (NPL) to two percent in 2015 from the current 3.5 percent or an estimated QR1.56bn. “ As long as we provide adequate provision, there is no real risk in NPL”, he said.
