Half of the local banks "opined an increase in confidence in the stability" of the country’s banking sector in the Qatar Central Bank’s Risk Perception Survey (RPS) 2021.
Rest of the respondents "observed that their confidence on stability" remains unchanged, the QCB said in its latest Financial Stability Report.
Among the seven identified global risks, almost all the local banks reported risk from Covid-19 pandemic was among the top two risks in 2021.
However, in 2022, the perception of most of these banks has changed, the QCB said.
Only 35% of the respondents opined that the pandemic will continue to be among the top two risks in 2022.
Among the other global risks, 41% of the respondents opined ‘lower energy prices’ was among the top two risks in 2020.
The percentage of respondents having this perception, however, fell to 30%-35% in 2021 and 2022, the QCB noted.
Risk from expected global slowdown is considered among the top two risks in 2021 and 2022 by around 50% of the respondents.
Among the given six macro-economic risks, ‘reduction in market liquidity’ and ‘lower domestic growth’ were considered among the top two risks by more than 50% of the respondents in 2020.
In 2021 as well as in 2022, nearly 70% respondents opined, risk from ‘lower domestic growth’ as top one or top two risk.
The QCB survey also "captured banks perception" on the major risk events from the given set of events pertaining to credit, liquidity, market, and operational risks.
Among the given vulnerabilities, “default from real estate developers” and “default from large borrowers” are considered by majority of the banks as the major risk factors.
In case of liquidity risk, “deposit withdrawal from wholesale depositors” was considered the major risk factor.
Among the given market risk factors, the perception of the banks differs and none of the risk factor is considered as major risk by more than 50% of the respondents in 2021 and 2022, the QCB noted.
However, in 2020, risk from exchange rate was considered the top one or two risks by around 55% of the respondents.
As in the previous year’s surveys, a large majority of the banks consider “risks from cyber world” as the major risk factor while other risk factors are considered major risk by less than 40% of the respondents, according to the survey.
According to the QCB, the banking sector’s perceptions regarding the potential vulnerabilities that can affect the sector provide leads to financial stability policy formulation.
This was the purpose behind the Risk Perception Survey (RPS) held among the locally operating banks under the jurisdiction of the QCB early last year.
Based on the received responses, the analysis collated the banking sectors’ expectations and perception about the risk factors in 2020, 2021 and 2022, the QCB noted.