Doha: The contribution of Qatar’s Islamic banks to finance the Consumer Sector was greater than that of other sectors. The contribution ratio in financing this sector stood at 45.4 percent of entire credit to this sector by the conventional banks, Bait Al-Mashura’s Islamic Finance Report on Qatar noted.
The credit facilities to the Industry sector increased in 2018 compared to previous years. The contribution of Islamic banking finance to the industry sector represented 36.7 percent of the total finance, followed by the real estate sector with 36.2 percent. Meanwhile, the finance of Islamic banks focused on the private sector and to individual finance, compared to conventional banks, which were mostly focused on the government sector.
The proportion of Islamic bank finance directed towards the local sector is higher than its traditional counterparts. During the five-year period, the compound annual growth rate of finances in Islamic banks in the State of Qatar was 5.7 percent. The highest average growth rate for QIB was 11.4 percent, followed by QIIB with 4.7 percent, then Masraf Al Rayan with 4.5 percent and finally Barwa Bank with a growth rate of 3.6 percent.
In view of the areas of finance for Islamic banks, compared to 2017, finances directed to the real estate sector accounted for 26 percent, exceeding the finances granted to governmental and semi-governmental entities, which amounted to 22 percent of the total finance of Islamic banks. The report noted that the finances directed to the industrial sector increased by 39 percent compared to 2017 to reach 4 percent of the total finance of Islamic banks.
The Islamic banks in Qatar continue to achieve positive results and high growth rates. In 2018, revenues amounted to QR16.2bn, with an increase of 10.4 percent over 2017. The revenues from finance and investment activities represented 89.4 percent of the total revenues of these banks. All Islamic banks generated profits with positive growth rates. The profits of Islamic banks in Qatar exceeded QR6.5bn, with an increase of 8.5 percent over 2017. The QIB achieved the highest growth rate of 14.5 percent, followed by QIIB with 6 percent and Masraf Al Rayan with 5 percent.
The compound annual growth rate for Islamic banks over the last five years was 4.9 percent, where QIB ranked first with a compound annual growth rate of 11.5 percent, followed by Barwa Bank, QIIB and Masraf Al Rayan.
Dr. Khalid Al Sulaiti, Deputy Chairman of Bait Al-Mashura Finance, said the results of 2018 showed more stability and strength for the Islamic finance sector, overcoming the effects of the unjust blockade imposed on Qatar and its economic consequences.
“This sector continues to impose its competitiveness on the world in terms of size and performance, and the legislative and regulatory environment in which it operates. The experience of the Islamic finance institutions during this period represents an important field for researchers and scholars regarding the management of emergent financial and economic crises.”
Source from: The Peninsula