Qatar’s banking sector assets outside the country grew last year after a ‘considerable decline’ observed in 2017 in the aftermath of blockade, QCB data show.
Qatar Central Bank data on geographical distribution of cross border assets from domestic banks shows they have increased their assets outside Qatar by around 2%.
This increase was ‘solely concentrated’ in European countries, while assets with other regions have ‘declined’.
Among the geographical regions, assets with GCC region ‘declined the most’ by around 18%. Assets with European region increased significantly by 32%.
Accordingly, the share of domestic banks assets with Europe increased from 30.1% in 2017 to 38.7% in 2018.
Share of assets in GCC countries have reduced by around four percentage points, QCB said.
Among the various asset class, credit declined the most by 11%, contributed mainly by decline of credit provided to GCC countries (20%) and other countries (24%).
However, credit provided to European region increased by 21%. On the contrary, assets with financial institutions increased by 43% supported by a substantial growth of 88% to European region.
Assets with financial institutions in GCC region and other Mena region declined considerably during the year.
Investment asset grew by 3% on account of 20% growth in investment assets in other Mena region, Qatar Central Bank’s 10th Financial Stability Review (FSR) has shown.
In all other region investment assets declined, it said.
On the liability side, domestic banks liability to outside Qatar increased heavily by around 22% in 2018. Except for GCC region, liability to all other region increased.
Liability with European region increased the most by 40% while liability to ‘other countries’ increased by 21%.
Consequently, the share of European region increased from 48.6% in 2017 to 56.2% in 2018.
Liabilities to GCC region declined to 11% in the current year from 18.8% in 2017.
Customer deposits from European region increased by 56%. Increase from North American region was another 32% while from ‘other countries’ it increased by 39%.
Decline in customer deposits was only from the GCC region (29%) for obvious reasons. Liabilities to financial institutions increased by 13% and mostly contributed by financial institution from the European region.
Liabilities to GCC financial institutions on the contrary declined by a whopping 37%, QCB said.
Banking sector’s assets outside Qatar grew after a considerable decline observed in 2017 in the aftermath of the blockade.
On the other hand, cross border liabilities of the banking sector rebounded strongly after a significant decline in 2017.
The improvement in banking sector liabilities is broad based where all the components of cross-border liabilities increased substantially.
As noted earlier, QCB said ‘rebound in non-resident deposits provided the growth momentum while placements and borrowings from the foreign financial institutions also improved quite substantially.
‘This increase in funded liabilities from outside Qatar reflects confidence of the international investors and financial institutions in the Qatari banking sector. The increase in cross-border liabilities leads to an increase in the share of this liability class from 26.5% in 2017 to 30.5% in 2018,’ QCB said.
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