Moody's Investors Service revealed that Qatari banks' ability to generate income remains strong, despite the high provisioning fees associated with the Corona epidemic.
According to the agency, the large capital reserves of local banks, the current oil prices and the Gulf reconciliation, support the financial performance of the banks during 2021, despite the existing challenges.
On January 5, reconciliation with the countries of the region was announced after the dispute with Doha that lasted for more than 3 years, and had negative effects on trade and investment. However, Qatar’s economy has shown resilience. The rise in oil prices, above $60 a barrel, supports Qatar's general budget, which estimated a conservative price of $40 a barrel only during 2021.
The report indicated that the pressures of the Coronavirus will keep provision costs high at the Qatari banks this year, with the deterioration of the quality of loans, despite the flexible 2020 results. According to the report, the total operating profits of banks increased by 4% to reach 43.9 billion riyals (12 billion dollars) in 2020, compared to 42.1 billion riyals (11.66 billion dollars) in the previous year.
The report also showed that the Qatari banks achieved flexible profits in 2020, despite the additional pressure of the pandemic on profits.
Source (Al-Araby Al-Jadeed Newspaper, Edited)
