According to Moody's, Qatari banks have excelled in maintaining robust liquidity coverage ratios, bolstered by a diverse range of deposits. Domestic private sector deposits account for a significant portion, supplemented by foreign and international financial inflows. By June 2024, customer deposits made up around 52% of total assets, reflecting the banks’ ability to attract substantial capital from various sources. Government and government-owned entities also play a crucial role in the sector, contributing about 36% of total deposits.
One of the key strengths identified in the report is the banks’ strategic focus on the public sector for a large share of their credit lending. This focus has minimized credit risks and reduced the likelihood of defaults, providing greater financial stability. Additionally, private sector credit is projected to see moderate growth this year, estimated between 3% and 4%, with the implementation of large-scale national projects driving this trend.
Moody's emphasized that the prudent regulations issued by the Qatar Central Bank (QCB) have been instrumental in reinforcing the financial system. These regulations have curtailed over-reliance on foreign funding, reducing foreign liabilities from 39% at the end of 2021 to 33% by mid-2024. Banks have successfully diversified their foreign liabilities across various maturities and regions, enhancing the resilience of their financial structure.
Further underpinning their strong financial standing, Qatari banks held liquid assets amounting to roughly 24.7% of total assets as of March 2024. This liquidity provides a substantial buffer against market fluctuations, enabling the banks to continue their growth trajectory even in a challenging global financial environment.