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Qatari banks' provisions surge to $1.81 billion

DUBAI: Qatari banks' loan provisioning growth slowed in September, central bank data showed yesterday, as the Gulf economy continued to rebound.

Total provisions increased 0.7 per cent on the month to 6.59 billion Qatari riyals ($1.81bn) at the end of September, after rising 2.7pc in August.

Fitch ratings agency said that Qatari banks emerged relatively unscathed from the global financial crisis with strong profitability, healthy assets, liquidity and capital.

High credit risks on loans to domestic real estate taken during the lending boom, however, continued to pressure banks' standalone risk profiles, the ratings agency said.

Some Qatari banks have taken large provisions for exposure to debt-ridden Saudi family firms in the past, while the government pumped funds into the sector last year to keep it stable following the global financial crisis.

Bank loans rose 1.4pc on the month to 268.4bn riyals in September, after edging up 0.8pc in August, and were 22pc higher than a year earlier.

Banks have also benefited from spending on infrastructure projects.

Qatar's economy surged 20.4pc in the second quarter from a year earlier, after shrinking 4.1pc in the first quarter. A poll forecasts the economy will grow 15.5pc this year.

Major Qatari banks reported robust third-quarter results this week, with Qatar National Bank posting a 41.5pc jump in net profit on increased loans, and Commercial Bank of Qatar reporting a 28.9pc increase in quarterly profit.

In March, Qatar said it would allow banks to diversify their revenue base and bolster trading income by buying shares of listed companies and re-entering the brokerage business.

Total assets in the Opec member's banking sector rose 2.2pc month-on-month in September after a 0.1pc dip in August. Qatar's central bank said in a stability review this week that the banking system was sound and banks had comfortable provisioning against bad loans.



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