Moody's revealed that the outlook for the banking system in Qatar remains stable, supported by the continued spending on infrastructure projects and high oil prices.
According to Moody's, the public spending will support economic growth and borrowing activity, reflecting positively on the profitability of banks, capital and broadly stable liquidity. The report showed that high oil prices improved government funding and boosted infrastructure spending, including the preparations for the 2022 World Cup.
The agency forecast the non-performing loans to rise to 2.4 percent of total loans by June 2020, from 2.1 percent at the end of 2018.
The rise in non-performing loans was attributed to the continuing challenges in the construction and real estate sector. Moreover, Moody's forecasts Qatar's real GDP growth of 2.1 percent in 2019 and 2.2 percent in 2020, mainly benefiting from the non-oil sector growth.
The agency believes that the banks' return on assets will remain broadly stable at around 1.5 percent by 2020.
Source (Al-Arabi Al-Jadeed Newspaper, Edited)
