Market Dynamics

Qatari Banks Post Robust Growth Underpinned by Sound Fiscal Measures says Qatar Central Bank Governor Business Seminar Tracks Market Trend: International Investors Continue to Invest in the Region
Measures undertaken by the Qatar Central Bank and the government to ensure the stability of the country’s banking sector during the global financial crisis has led to a robust growth within that industry said Qatar’s chief financial authority. HE Shaikh Abdulla bin Saoud Al Thani, the Governor of Qatar Central Bank, told an august gathering of finance industry experts that “the total assets of local banks operating in Qatar grew by 16.5 per cent in 2009, and reached 21.2 per cent by the end of the first quarter of 2010.” HE Shaikh Abdulla was the Chief Guest at the business seminar on ‘Changing Market Dynamics’ jointly organised by Doha Bank and Doha Bank Assurance Company. It was attended by Doha Bank’s HE Shaikh Fahad Bin Mohammad Bin Jabor Al Thani, Chairman of the Board of Directors, Mr. Ahmed Abdul Rahman Yousuf Obaidan Fakhroo,Vice Chairman, HE Sheikh Abdul Rehman Bin Mohammad Bin Jabor Al Thani, Managing Director, and members of the Board of Directors. Doha Bank’s Group CEO Mr R Seetharaman welcomed the guests and introduced the panel of speakers who included senior executives from JP Morgan, Morgan Stanley and Lal Bahadur Shastri Institute of Management (India). The seminar, held at the Four Season’s hotel in Doha, dealt with the changing face of financial markets – stock, currency, commodities, insurance, and properties among others. In his opening address HE Shaikh Abdulla noted that the efficacy of the measures undertaken by Qatar’s Central Bank and the Qatari government to protect Qatar from the global recession was reflected in the growth figures reported by the banks and the financial institutions. “Customer deposits of local banks rose by more than 16 per cent in 2009 compared to the previous year, and topped 32.4 per cent by the end of the first quarter of 2010,” he said. Noting other positive indicators resulting from such measures HE Shaikh Abdulla said the credit facilities granted to customers by local banks increased by more than 14 per cent in 2009 compared to 2008, and it reached 31.1 per cent during the first quarter of 2010, confirming the banks’ commitment to project finance.
“Capital adequacy achieved during 2009 was 15 per cent compared to the minimum ratio specified by 10 per cent. Irregular loans to total loans and credit facilities were 1.7 per cent only by the end of 2009, reflecting the quality of assets in commercial banks. Net profit to return on average equity was about 19.3 per cent during 2009, while the net profit to the average total assets was about 2.6 per cent,” said HE Shaikh Abdulla. The Governor’s address was followed by a panel discussion moderated by Mr Seetharaman, which addressed the need for realigning the local, regional, global and regulatory business model. Cesar Perez, Chief Investment Strategist for EMEA, JP Morgan, spoke on the 2010 Economic Outlook, Investment Themes and Opportunities – EMEA Region. Looking at factors that will drive asset returns he noted that “reflationary policies are working now, but stimulus exit strategies and regulatory risks alongside still-healing economies pose significant risks in 2010.” He saw plenty of evidence that global recovery is on track, but said that “still extreme monetary and fiscal stimulus is unlikely to go away soon.” Klaus Froehlic – Head of Global Capital Markets, Morgan Stanley, spoke on MENA Capital Markets in a Global Context. He said while the world seems to be in recovery Europe is causing trouble. However, the Middle East region is largely unaffected at present by European Sovereign Crisis. He said the regional contagion from Dubai restructuring has been contained and international investors continue to invest in the region diversifying into other countries. “2009 – 2011 are the years of restructurings. The Sukuk market is active – especially in Asia. The IPO market is open in US, Europe and Asia… why not GCC? There is increasing interest in the region from international investors,” he concluded. Dr. K C Mishra, Director, Lal Bahadur Shastri Institute of Management (India), speaking on insurance trends remarked that there are interesting times are ahead in insurance and pension sectors. “Regulators are to be proactive and imaginative rather than policing the system to strangulate growth.” He noted that long term life insurance growth trend is about eight per cent and general insurance four per cent. “But emerging markets grow at almost thrice the global long term rates in short term. Takaful segment is the highest growing insurance segment of the world - growing at three to four times the global average; health, liability and motor segments are growing at a faster rate,” said Dr Mishra. Mr Seetharaman said the business seminar was part of the bank’s continuing community outreach campaign “to serve and develop business and commercial relationship within the community which will be mutually beneficial. Our innovation outshines our rivals, and the list of products and services we have introduced to our markets is long, and we continue to develop plans for the future which will extend our lead in many areas.” HE Shaikh Abdulla commended the bank for taking the lead in hosting such seminars bringing together experts to discuss and present the market trends. He said “I would like to thank Doha Bank for hosting this seminar and for its constant interest in knowledge sharing, which only proves its constant commitment and care towards both its retail and corporate customers. Doha Bank’s selection of the topic of this seminar reflects its concern about its customers and its commitment to spread and share banking knowledge.” For 30 years Doha Bank has been providing innovative and competitive banking solutions for its customers and clients. NOTE TO EDITORS: Transcripts of the speeches are available on request.