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
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
Ray Hanania is an award winning political and humor columnist who analyzes American and Middle East politics, and life in general. He is an author of several books.
"I write about three topics, the Middle East, politics and life in general. I often take my life experiences and offer them in an entertaining way to readers, and I take on the toughest topics like the Israel-Palestine conflict and don't pull any punches about what I feel is fair. But, my priority is always about writing the good story."
Hanania covered Chicago Politics and Chicago City Hall from 1976 through 1992. Hanania began writing in 1975 when he published The Middle Eastern Voice newspaper in Chicago (1975-1977). He later published “The National Arab American Times” newspaper which was distributed through 12,500 Middle East food stores in 48 American States (2004-2007).
Hanania writes weekly columns on Middle East and American Arab issues for the Arab News in Saudi Arabia at www.ArabNews.com, and at www.TheArabDailyNews.com, www.TheDailyHookah.com and at SuburbanChicagoland.com. He has also published weekly columns in the Jerusalem Post newspaper, YNetNews.com, Newsday Newspaper in New York, the Orlando Sentinel Newspapers, and the Arlington Heights Daily Herald.
Palestinian, American Arab and Christian, Hanania’s parents originate from Jerusalem and Bethlehem.
Hanania is the recipient of four (4) Chicago Headline Club “Peter Lisagor Awards” for Column writing. In November 2006, he was named “Best Ethnic American Columnist” by the New American Media. In 2009, Hanania received the prestigious Sigma Delta Chi Award for Writing from the Society of Professional Journalists. He is the recipient of the MT Mehdi Courage in Journalism Award. He was honored for his writing skills with two (2) Chicago Stick-o-Type awards from the Chicago Newspaper Guild. In 1990, Hanania was nominated by the Chicago Sun-Times editors for a Pulitzer Prize for his four-part series on the Palestinian Intifada.
His writings have also been honored by two national Awards from ADC for his writing, and from the National Arab American Journalists Association.
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