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Seven out of eight Qatari banks rated by Moody’s saw improvement in 2021 and their combined net profit rose by nine percent to QAR 22.2 billion ($6 billion).
Moody’s said in a new report that financial results for seven of the eight Qatari banks the agency rated improved in 2021, driven by an increase in both net interest income and non-interest income, such as fees and commissions.
“Aggregate return on assets was 1.2 percent, still below the 1.4 percent for 2019, as provisioning charges climbed 25 percent,” the agency said.
“We expect bottom-line profitability to continue to improve in 2022 as operating income continues to grow while provisioning efforts may ease,’’ said Nitish Bhojnagarwala, VP-Senior Credit Officer at Moody’s Investors Service.
Moody’s said net interest income increased, mainly due to lower interest expenses and total operating income rose by 10 percent during 2021.
Growth in operating profit was also supported by an increase in non-interest income, which rose nine percent year-on-year, after declining 11 percent in 2020.
Despite the increase, provisioning remained lower than for some other banks in the region, Moody’s said.
“We expect provisions to stabilise as the economy recovers, supported by Qatari banks' large exposure to the strongly rated Government of Qatar (Aa3 stable).”
(Writing by Imogen Lillywhite; editing by Seban Scaria)
