| Kippreport.com

Moving at Variable Speed

May 21, 2012 3:43 by kippreport

The Qatari bank­ing system’s total assets grew by an average of 31 percent between 2002 and 2011, and S&P views this high-paced credit growth as a potential risk factor. Additionally, the Qatari banking system displays high con­centration in lending to cyclical sectors, such as real estate and construction, which increases the credit risk for Qatar’s banks.

Peter Vayanos, a Partner at Booz & Co, is also confident about the situation in Saudi Arabia and Qatar. “The financial services in­dustries in these two countries are buoyant, largely due to the strength of the underly­ing macro economical situation. These two countries have lined up large programmes with lots of infrastructure spending, due to oil and gas revenues. Besides strengthen­ing and expanding the oil- and gas-related infrastructure, the aim is to build up ca­pabilities like roads, hospitals, and in the case of Qatar, necessary sporting and tour­ism infrastructure required for the Football World Cup tournament, which will be held there in 2022. We see both these countries as being very stable, and unless there is a major event, like say the Iran war, we expect the build-up and stability to continue.”

 

UAE: Work in progress

The situation in the UAE continues to improve, even though analysts agree it is pretty much a case of a work in progress. Although lending growth by the banks in the UAE has come back to the positive territory, it remains far from the levels that are neces­sary to ensure that companies have access to adequate credit, in order to ensure growth in the non-oil economy.

 

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Tags: banking industry, emaar, enbd, gcc, GIH, Global banking crisis, NPA, QNB, the Central Bank of UAE, UAE