As the crisis between the GCC remains unresolved, the adverse impact of the crisis and the blockade on Qatar cannot be ignored. It was recently reported that Qatar's credit rating has been downgraded by the international rating agencies (S&P, Moody's and Fitch) and Qatari banks have been asked to seek borrowing and funding from the international banking market. However, Qatar has and continues to exert every effort to minimize and limit impact of the crisis on the Qatari economy and continues to take steady steps forward.
The governor of Qatar Central Bank, Sheikh Abdullah Saoud Al Thani, has stated that the local banks are capable of facing any possible 'abnormal conditions' resulting from the siege imposed on the country. He proclaimed that the Qatari banking system is strong and efficient with deposits in the banks being in excess of QAR39.3 billion (US$10.43 billion).
Perhaps the key development that occurred recently was the opening of Hamad Port, the largest port in the Middle East, in Doha. The port will eventually cover around 20 sq km and will have an annual capacity of 7.5 million shipping containers, and separate terminals dedicated to general cargo, cereals, vehicles and livestock.
As an update on the proposed tripartite merger between Masraf Al Rayan, Barwa Bank and the International Bank of Qatar, it was recently announced that the merger is in its final phase of concluding the legal and financial studies, as noted by Barwa Bank's CEO, Khalid Al Subeai. He also noted that once the studies are completed, the report will be submitted to the board of directors and the shareholders. The banks will jointly announce the merger after the legal and regulatory procedures are completed.
Qatar Islamic Bank has signed a QAR1.6 billion (US$424.54 million) financing deal with AlJaber Engineering (JEC) to support JEC's current project to execute the design and construction of strategic food security facilities and warehouses at the newly opened Hamad Port. The project consists of specialized facilities for the processing, manufacturing and refining of rice, raw sugar and edible oils. These products will be available for local, regional and global use. One more feature of the project will be a specialized facility for the recycling of waste products arising from the processing of basic commodities to create animal feed.
Qatar National Bank announced that its London branch has received the approvals of the Prudential Regulation Authority and the Financial Conduct Authority for its regulated home finance license designed to assist individual customers with buying property in the UK. QInvest's income-generating Ijarah fund, which provides investors access to income-generating assets in developed markets, was oversubscribed.
As we now head to the final portion of the year, it is expected that activity will pick up again in the Qatari banking sector. It is hoped that the impact of the ongoing GCC crisis on the Qatari economy and s minimal and the market continues to operate as normal.
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