*Qatari banks able to maintain strong financial position
HE the Governor of Qatar Central Bank (QCB) Sheikh Abdullah bin Saud al-Thani hailed the ability of Qatari banks to maintain the strength of their financial position despite the Covid-19 pandemic, stressing that measures to confront it did not affect the financing policies of the banking sector in the country.
He said that the financing policies of banks are achieving their goals, indicating that the domestic credit growth exceeded QR 1 trillion at the end of 2020.
In an interview with a local newspaper , HE Sheikh Abdullah bin Saud al-Thani said that QCB has adopted continuous proactive plans to face local and regional economic challenges, especially in light of the Covid-19 pandemic outbreak.
The QCB Governor revealed the reasons that led to the drop in banks' profits in 2020 to about 8.1%, foremost among which is banks' hedges and additional allocations against expected credit losses, which have become a requirement for Qatari banks with the application of the International Accounting Standard and the corresponding standard for Islamic banks since 2018, as well as irregular debt and the allocations of impairment of assets due to unfavourable developments in 2020.
HE Sheikh Abdullah bin Saud al-Thani affirmed that QCB is ready to support small and medium-sized enterprises (SMEs), in order to achieve and raise the level of self-sufficiency in all sectors and provide comfortable liquidity while directing interest rates to the required level.
He pointed out that QCB, through the banking sector, is ready to support the private sector, especially the SMEs, and push forward the Qatari economy towards self-sufficiency, by enhancing credit growth as appropriate, adding that QCB proactively carries out liquidity management processes to ensure comfortable liquidity for the banking system, while directing rates interest to the desired level.
He said that the resilience shown by the Qatari economy is a combination of factors, including the policy measures taken by QCB and the economic diversification strategy adopted over the years, which have contributed and will continue to contribute to transforming challenges into opportunities that enhance the growth of the Qatari economy.
HE Sheikh Abdullah reviewed the measures taken to ensure the protection of the banking sector from the risks of money laundering in accordance with a national strategy to combat the financing of terrorism, emphasising that Qatar has one of the lowest crime rates in the world, and it is also one of the safest countries in the world. However, this did not prevent the State and QCB from taking a set of measures to ensure that the financial and banking sector is protected from money laundering and terrorist financing risks, through a number of legislations, he added.
He continued to say that QCB has an independent department for anti-money laundering and terrorist financing, which carries out the tasks of monitoring and supervising financial institutions through its various units, which includes field control unit, office supervision, a department for support, coordination and cooperation, and a section for technical analysis. Qatar Central Bank, he said, issued a set of executive instructions and regulations to combat money laundering, terrorism financing and the financing of weapons of mass destruction proliferation in financial institutions from December 2019 to January 2021.
HE Sheikh Abdullah also revealed five measures set by QCB to ensure the transparency of the operations of exchange companies in the country through a complete online system, to follow up, control and analyze all financial transfers.
The QCB governor referred to the reasons for prohibiting the circulation of digital currencies, saying that central banks around the world have not reached a specific agreement in terms of the mechanism of dealing with digital currencies, especially those that are not denominated in any assets, noting that QCB has banned the circulation of digital currencies that are not denominated in any assets, due to their high price volatility and the associated identity risks.
He added that with regard to the digital currency of the central bank, many central banks in the world, including the Qatar Central Bank, have studied the possibility of launching the digital currency of the central bank, and the extent of the impact of this currency on the management of monetary policy and financial stability.
Regarding preparation for dealing with Basel standards and rules and how the share of Islamic banks will be, he said that developing Qatar Central Bank's instructions to comply with the latest amendments introduced by the Basel Committee is an ongoing process, as Basel's instructions are applied up-to-date and some of them are already implemented, such as those in the joint project between QCB and all national banks.
He added that Qatar Central Bank is in the process of issuing a capital adequacy standard for both conventional and Islamic banks during the current year, to be ready for application to banks starting in 2023.
Regarding the bond and sukuk issuance, HE Sheikh Abdullah affirmed that the bank did not issue any sukuk in 2020, and that the decision depends on the needs of the Ministry of Finance, and treasury bills amounting to QR 7.2bn have been reissued, and the balance of treasury bills is currently QR 3bn.
He said that the financing policies of banks are achieving their goals, indicating that the domestic credit growth exceeded QR 1 trillion at the end of 2020.
In an interview with a local newspaper , HE Sheikh Abdullah bin Saud al-Thani said that QCB has adopted continuous proactive plans to face local and regional economic challenges, especially in light of the Covid-19 pandemic outbreak.
The QCB Governor revealed the reasons that led to the drop in banks' profits in 2020 to about 8.1%, foremost among which is banks' hedges and additional allocations against expected credit losses, which have become a requirement for Qatari banks with the application of the International Accounting Standard and the corresponding standard for Islamic banks since 2018, as well as irregular debt and the allocations of impairment of assets due to unfavourable developments in 2020.
HE Sheikh Abdullah bin Saud al-Thani affirmed that QCB is ready to support small and medium-sized enterprises (SMEs), in order to achieve and raise the level of self-sufficiency in all sectors and provide comfortable liquidity while directing interest rates to the required level.
He pointed out that QCB, through the banking sector, is ready to support the private sector, especially the SMEs, and push forward the Qatari economy towards self-sufficiency, by enhancing credit growth as appropriate, adding that QCB proactively carries out liquidity management processes to ensure comfortable liquidity for the banking system, while directing rates interest to the desired level.
He said that the resilience shown by the Qatari economy is a combination of factors, including the policy measures taken by QCB and the economic diversification strategy adopted over the years, which have contributed and will continue to contribute to transforming challenges into opportunities that enhance the growth of the Qatari economy.
HE Sheikh Abdullah reviewed the measures taken to ensure the protection of the banking sector from the risks of money laundering in accordance with a national strategy to combat the financing of terrorism, emphasising that Qatar has one of the lowest crime rates in the world, and it is also one of the safest countries in the world. However, this did not prevent the State and QCB from taking a set of measures to ensure that the financial and banking sector is protected from money laundering and terrorist financing risks, through a number of legislations, he added.
He continued to say that QCB has an independent department for anti-money laundering and terrorist financing, which carries out the tasks of monitoring and supervising financial institutions through its various units, which includes field control unit, office supervision, a department for support, coordination and cooperation, and a section for technical analysis. Qatar Central Bank, he said, issued a set of executive instructions and regulations to combat money laundering, terrorism financing and the financing of weapons of mass destruction proliferation in financial institutions from December 2019 to January 2021.
HE Sheikh Abdullah also revealed five measures set by QCB to ensure the transparency of the operations of exchange companies in the country through a complete online system, to follow up, control and analyze all financial transfers.
The QCB governor referred to the reasons for prohibiting the circulation of digital currencies, saying that central banks around the world have not reached a specific agreement in terms of the mechanism of dealing with digital currencies, especially those that are not denominated in any assets, noting that QCB has banned the circulation of digital currencies that are not denominated in any assets, due to their high price volatility and the associated identity risks.
He added that with regard to the digital currency of the central bank, many central banks in the world, including the Qatar Central Bank, have studied the possibility of launching the digital currency of the central bank, and the extent of the impact of this currency on the management of monetary policy and financial stability.
Regarding preparation for dealing with Basel standards and rules and how the share of Islamic banks will be, he said that developing Qatar Central Bank's instructions to comply with the latest amendments introduced by the Basel Committee is an ongoing process, as Basel's instructions are applied up-to-date and some of them are already implemented, such as those in the joint project between QCB and all national banks.
He added that Qatar Central Bank is in the process of issuing a capital adequacy standard for both conventional and Islamic banks during the current year, to be ready for application to banks starting in 2023.
Regarding the bond and sukuk issuance, HE Sheikh Abdullah affirmed that the bank did not issue any sukuk in 2020, and that the decision depends on the needs of the Ministry of Finance, and treasury bills amounting to QR 7.2bn have been reissued, and the balance of treasury bills is currently QR 3bn.