Long-term outlook for Qatari banks positive, says PwC

PwC Middle East said in a report released on Sunday said that the long-term outlook for the financial sector in Qatar is positive, but there will likely be some short- to mid-term volatility.

In its latest Qatar Banking Sector report, the PwC Middle East has highlighted positive financial performance as the country’s financial institutions firm up their core banking activities with initiatives aimed at digital innovation, customer and data protection, data infrastructure establishment, and sustainability practices.

Banks in Qatar have reported gradual growth in balance sheet and financing portfolio. Earnings metrics, including gross income, operating income, and profit before tax demonstrate growth and highlight high adaptability to the changing interest rate environment, the report said.

According to the report, assets of Qatari banks increased by 3.6 percent, reflecting expansion in the banks’ overall holdings.

Gross loans and advances grew by 3.3 percent, indicating increased lending activities. Deposits rose by 2.7 percent, showcasing continued inflow of customer funds but at a slower pace than assets, due to remaining economic uncertainty and post-World Cup growth trajectory.

Gross income surged by 25.6 percent due to rapidly rising interest rates, which most of the banks have been able to capitalize upon.

Operating income and Profit Before Tax increased by 18.1 percent and 20.2 percent respectively, showing improved operational efficiency as revenue growth has only been partially offset by repriced liabilities.

Banks in the country have been continuously developing their digital capabilities by prioritizing customer-centric approaches and digital innovation, according to the report.

Developing new digital products, embracing an open banking mindset and establishing strategic partnerships with FinTech companies, guided by complementary regulations, are all factors helping to strengthen their positions.

Qatar Financial Services Sector Leader at PwC Middle East Ahmed AlKiswani said, “Qatar is strategically positioning itself as a leading FinTech hub in the Middle East and a pioneer in digital transformation and sustainability within the financial services sector. We remain confident that the financial sector in Qatar is well placed to adapt to a changing financial environment and continue to grow.”