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Chart showing drop in Qatari finances. Credit Rating falls. Photo courtesy of Moody's

Qatar’s credit rating drops dramatically

Posted on August 8, 2017August 8, 2017 By rayhanania No Comments on Qatar’s credit rating drops dramatically
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Qatar’s credit rating drops dramatically

Moody’s has today changed the outlook on Qatar’s banking system to negative from stable due to the weakening operating conditions and continued funding pressures facing Qatari banks. The outlook also captures the potential weakening capacity of the Qatar government to support the country’s banks.

The outlook expresses Moody’s expectation of how bank creditworthiness will evolve in Qatar over the next 12-18 months.

“Qatari banks’ reliance on confidence-sensitive external funding has increased in recent years due to a significant decline in oil-related revenues” said Nitish Bhojnagarwala, a Vice President at Moody’s. “This leaves them vulnerable to shifts in investor sentiment.”

“We expect system-wide problem loans to increase to around 2.2% of gross loans by 2018, up from 1.7% as of December 2016” says Mr. Bhojnagarwala. Despite this increase, the non-performing loan (NPL) ratio will remain among the lowest in the GCC heading into 2018.

Chart showing drop in Qatari finances. Credit Rating falls. Photo courtesy of Moody's
Chart showing drop in Qatari finances. Credit Rating falls. Photo courtesy of Moody’s

Key takeaways:

o   Moody’s expects Qatar’s GDP growth to slow to 2.4% in 2017 from exceptionally high rates of around 13.3% recorded during the 2006-2014 period

o   Domestic credit growth will also slow to the 5%-7% range for 2017 and 2018, down from 15% in 2015.

o   Moody’s notes that asset quality will dip slightly due to the gradual economic slowdown, combined with Qatar’s ongoing dispute with some neighboring countries and continued challenges in the construction and contracting sector.

o   Nonetheless, Moody’s says capitalisation will continue to remain strong providing Qatari banks with substantial cushions to absorb losses.

o   Moody’s expects tangible common equity to increase to around 15.5% of risk-weighted assets by end 2018 from 14.4%, as of December 2016, driven by slower-than-normal credit growth and higher profit retention.

o   A prolonged regional dispute could trigger some outflows of foreign deposits and other external funding (which represents around 36% of total banking system liabilities as of May 2017). As a result, the banks’ high liquidity buffers (at 24% as of total assets as of December 2016) would likely reduce, as domestic deposits remain tight due to reduced oil revenues.

o   Against this backdrop, Qatari banks’ profitability will likely decline, with return-on-assets declining to around 1.4% for 2017, from 1.6% in 2016, driven by increases in funding and provisioning costs.

Comments and observations courtesy of Nitish Bhojnagarwala, a Vice President at Moody’s.

ملخص البيان الصحفي

وكالة Moody’s تغير نظرتها المستقبلية للنظام المصرفي القطري من مستقرة إلى سلبية بسبب ضعف بيئة التشغيل

دبي، 8 أغسطس/آب 2017 – غيّرت وكالة Moody’s لخدمات المستثمرين اليوم نظرتها المستقبلية للنظام المصرفي القطري من مستقرة إلى سلبية بسبب ضعف بيئة التشغيل وضغوط التمويل المستمرة التي تواجه البنوك القطرية. وقالت وكالة التصنيف أن النظرة المستقبلية تعكس أيضًا الضعف المحتمل في قدرة الحكومة القطرية على دعم البنوك.

وذكرت وكالة التصنيف أن النظرة  المستقبلية السالبة تعبر عن توقعاتها لكيفية تطور الجدارة الائتمانية للقطاع المصرفي القطري على مدى الأشهر 12-18 المقبلة.

وفي هذ السياق، قال نيتيش بوجناغاروالا، نائب الرئيس ومحلل لدى شركة Moody’s:”إن اعتماد البنوك القطرية على التمويل الخارجي الذي يتأثر بثقة المستثمرين قد ارتفع في السنوات الأخيرة  بسبب الانخفاض الملحوظ في العائدات النفطية مما جعلها عرضة للتحولات في ميول المستثمرين”.

هذا، وتتوقع وكالة Moody’s أن يتباطأ نمو الناتج المحلي الإجمالي إلى 2.4% في 2017 من معدلات مرتفعة استثنائية  بلغت نحو 13.3٪ سجلها القطاع خلال الفترة 2006-2014، ولكن مع ذلك تظل هذه المعدلات الأعلى خليجيا  مدفوعًة بارتفاع مستويات الانفاق  الحكومي استعدادًا لكأس العالم لكرة القدم المزمع عقده في عام 2022.  ونتيجة لذلك، سيتباطأ نمو الائتمان المحلي أيضًا بمعدل 5% إلى 7% لعامي 2017 و2018، منخفضًا من نسبة 15% حققها في عام 2015.

وتتوقع وكالة التصنيف أن يؤدي التباطؤ الاقتصادي التدريجي، مقترنًا بالنزاع الحالي لقطر مع بعض البلدان المجاورة، والتحديات المستمرة في قطاع البناء والمقاولات، إلى تراجع طفيف في جودة الأصول. وأضاف السيد بوجناغاروالا:”نحن نتوقع أن ترتفع القروض المتعثرة للقطاع المصرفي بشكل عام  لتصل إلى حوالي 2.2% من إجمالي القروض بحلول عام 2018، مرتفعة بنسبة 1.7% بنهاية ديسمبر 2016″. ولكن على الرغم من هذه الزيادة، ستبقى نسبة القروض متعثرة السداد ضمن المستوى الأدنى خليجيا حتى حلول عام 2018.

ومع ذلك، ستظل رسملة البنوك القطرية قوية مما يزودها بقدرة كبيرة على استيعاب الخسائر. وتتوقع وكالة Moody’sأن ترتفع نسبة حقوق الملكية الملموسة إلى حوالي 15.5% من نسبة الأصول البنكية الخاضعة لتقييم مخاطر الائتمان بنهاية عام 2018 من نسبة 14.4% حققتها في ديسمبر 2016، مدفوعة  بنمو أقل من المتوقع للائتمان مع احتفاظها بأرباح مرتفعة.

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rayhanania
rayhanania
Op-Ed writer, author, radio host, podcaster at The Arab Daily News
Ray Hanania is an award-winning columnist, author & former Chicago City Hall reporter (1977-1992). A veteran who served during the Vietnam War and the recipient of four SPJ Peter Lisagor Awards for column writing, Hanania writes weekly opinion columns on mainstream American & Chicagoland topics for the Southwest News-Herald, Des Plaines Valley News, the Regional News, The Reporter Newspapers, and Suburban Chicagoland.  

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Hanania also writes about Middle East issues for the Arab News, and The Arab Daily News criticizing government policies in the Israeli-Palestinian conflict.

Hanania was named "Best Ethnic American Columnist" by the New America Media in November 2007, and is the 2009 recipient of the SPJ National Sigma Delta Chi Award for column writing.

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