DOHA: The banking sector in Qatar is becoming highly competitive and challenging, as some of the foreign banks have started to increase their presence in the market, says Kuwait-based Global Investment House (GIH).
The sector has witnessed a couple of mergers and acquisitions in 2004. National Bank of Kuwait (NBK) became the international shareholder of the erstwhile Grindlays Qatar Bank which is now known as International Bank of Qatar (IBQ).
NBK has a 20 per cent stake in the capital of IBQ. In another development, Bahrain's Ahli United Bank (AUB) acquired 40 per cent stake in Al Ahli Bank of Qatar and it has been renamed as Ahli Bank QSC.
Apart from this, Mashreqbank also plans to spread out its foothold in the Qatari market. "With these the banking sector in Qatar will experience a new dimension of competition in retail as well as institutional segments," the report said.
In a major step for a Qatari bank, QNB went global and bought a key London-based wealth management group. The 135m deal acquired Ansbacher Holdings, a subsidiary of South Africa's FirstRand, the country's second largest bank by assets. The acquisition is a milestone for QNB as it became the first GCC bank to buy an international financial institution of the repute of Ansbacher. To tap the growing importance of Islamic finance, especially in the GCC region, many conventional banks are venturing into Islamic banking which will further change the face of the banking sector in Qatar, the report added.
During the period 2000-2004, total credit facilities grew at a CAGR of 14.2pc to reach QR49.5bn, while total domestic credit grew by 14.7pc to QR48.3bn. Almost all the sectors have witnessed double digit CAGR in their credit offtake, during 2000-2004, except few such as merchandise, credit outside Qatar and others.
During the first nine months of 2005, total credit facilities of the banking sector grew by 27.1 pc to QR62.9bn from QR49.5bn at the year end 2004.
In Qatar, large banks such as QNB, Doha Bank and Commercialbank dominate the banking industry by virtue of their size, reach and coverage. The large banks also have competitive advantage over the smaller banks on account of their strong brand equity and distribution coverage. Our comparison of the banks in this section would remain confined to only the six listed local banks of Qatar which account for about 85% of the total assets (as of September 2005) in the local banking industry. The Qatari banking sector is dominated by the Qatar National Bank. In terms of assets, QNB has a dominant presence in the domestic banking industry accounting for 47.1pc of the total banking assets of the listed Qatari banks. In terms of total deposits it accounts for 47.2pc of total banking deposits of the listed banks.
The bank held 51.2pc market share of net loans and advances. However, since last few years, QNB is losing its market share in all categories. Among the six listed banks, Commercial Bank held second position in terms of size of assets, customer deposits and loans & advances as of Sept. 2005. The bank held 19pc market share in terms of assets, 18.5pc in deposits and 16.5pc of net loans and advances segment. Doha Bank held third position in terms of all the three categories namely, total assets, deposits and net loans & advances, the report said.
© The Peninsula 2005
