Moody’s outlook for Qatar’s banking system remains stable

Doha: The outlook for Qatar’s banking system remains stable as continued spending on the country’s infrastructure projects will drive modest economic growth and support lending, Moody’s Investors Service said in a report yesterday.

“Higher oil prices have improved government finances and supported spending on infrastructure, including preparations for the 2022 FIFA World Cup,” said Nitish Bhojnagarwala, VP-Senior Credit Officer at Moody’s. “Banks’ sound profitability, capital and liquidity should stay broadly stable, even as problem loans increase slightly because of continued challenges in the construction, contracting and real estate sectors.”

Moody’s expects problem loans to increase to 2.4 percent of total loans by June 2020 from 2.1 percent at the end of 2018, while Qatar’s real GDP rises 2.1 percent in 2019 and 2.2 percent in 2020, driven mainly by growth in the non-hydrocarbon sector of the economy.

Banks’ return on assets will remain broadly stable at around 1.5 percent going into 2020.

Source from: The Peninsula