Listed Banking Assets Grow Over 8% in Qatar to $389.4Bn In
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OIL GAINS | Page 2 Q2 SCORE | Page 5 IMF warns Apple Arab states posts jump over debt in profi ts Thursday, May 3, 2018 Sha’baan 17, 1439 AH GULF TIMES DELIVERING GREAT BENEFITS : Page 16 QNB to launch e-commerce platform ‘QNB-Simplify’ with BUSINESS Mastercard in boost for ties Fed keeps interest rates unchanged, says Listed banking assets inflation near target Reuters Washington The Federal Reserve held interest rates steady yesterday grow over 8% in Qatar to and expressed confidence that a recent rise in inflation to near the US central bank’s 2% target would be sustained, leaving it on track to raise borrowing costs in June. The Fed’s rate-setting committee also downplayed a recent slowdown in economic and job growth, saying that activity had been expanding at a moderate rate and job $389.4bn in 2017: KPMG gains, on average, had been strong in recent months. In a statement following the end of a two-day policy By Pratap John On the report, Omar Mah- meeting, the Fed said inflation had “moved close” to its Chief Business Reporter mood, head (Financial Services) target and that “on a 12-month basis is expected to run for KPMG in the Middle East & near the Committee’s symmetric 2% objective over the South Asia, and partner at KPMG medium term.” otal listed banking sector in Qatar, said, “Overall it has been The Fed’s decision to leave its benchmark overnight assets in Qatar increased a strong year for listed banks in lending rate in a target range of between 1.50% and 1.75% Tby 8.1% to $389.4bn in Qatar. While profi tability, as- was unanimous. 2017 from $360.2bn in 2016, driv- sets and capital have all increased Investors had all but ruled out another increase at this en by growth in corporate lend- from the comparative year, banks meeting. The Fed raised rates in March. ing, cash and equivalents and in- in Qatar have also managed to The Fed’s overall confidence in the economic outlook vestment securities, a new report reduce costs by 1.9% on average, was also highlighted by its assertion that business fixed has shown. resulting in a sector cost-to- investment had continued to grow strongly. This, according to KPMG, was income ratio of less than 30%, It added that risks to the outlook appear roughly balanced, the “highest” asset growth rate which is the lowest in the region. removing a previous reference to “near-term risks.” among all Gulf Co-operation These positive report fi ndings are Fed chairman Jerome Powell has maintained that the Council countries last year. particularly impressive, given the central bank will pursue a middle-of-the-road approach to This growth can be predomi- unique year for Qatar, both politi- monetary policy, continuing to gradually lift rates in the nantly attributed to the increase in cally and economically, and con- face of a robust economy that had yet to spark a jump in fi nancing asset balances (70%) and tinue to refl ect the resilience of inflation. higher investment securities (15%). Qatar’s banking sector.” But data released on Monday showed that price gains are In its ‘GCC Listed Banks Re- Mahmood said, “Despite this now eff ectively at the Fed’s 2% target after years of falling sults’ report, KPMG said the mar- success banks are still very well short of that mark. ket is dominated by QNB, which aware of the challenges that re- The Fed’s preferred measure of inflation soared 1.9% in had a market share of 56.3% of main. Impairment charges, non- the 12 months through March, the biggest increase since total listed banking assets at end- performing ratios and funding February 2017, after increasing 1.6% in the year through 2017, up from 2016, while Islamic costs have all increased, while February, the US Commerce Department reported. banks had a combined market At 29.5%, Qatar’s listed banks have the “lowest” CIR on average across the GCC. PICTURE: Nasar T K liquidity continues to be a key Fed policymakers had anticipated the rise and have share of 20.8%. focus area. Banks are therefore stressed that their 2% target is not a ceiling. In 2017, profi tability for listed the Islamic sector, reported a de- which banks continue to focus on The report said the Qatar Cen- reshaping strategies, targeting The central bank currently forecasts another two rate rises banks increased by 5% on aver- cline in their CIRs, which KPMG and maintain at low levels. tral Bank takes a “proactive” ap- higher quality domestic assets this year, although an increasing number of policymakers age from the previous year. This noted, “helped overall average Capital Adequacy Ratios proach to regulating banks in and looking at diversifi ed funding see three as possible. was mainly a result of higher net dip” below 30% for the fi rst time (CARs), for all except two banks Qatar. It has issued Basel III regu- sources. Investors overwhelmingly expect a rate hike at the Fed’s interest income, which increased in a number of years. are at higher levels when com- lations for all banks, which have “The focus on innovation and next policy meeting on June 12-13. by 3.8% and a further reduction Banks have continued to invest pared with 2016, refl ecting the been applied in a phased manner, effi ciency will continue as banks The pace of rate increases has picked up since the Fed in costs, despite a higher impair- in short and long-term cost-sav- “conservative approach” to busi- and has implemented numer- in Qatar look to diff erentiate began its tightening cycle in December 2015. ment charge on loans. ing initiatives. ness during the year, coupled ous regulatory requirements that themselves in a competitive mar- It raised rates once in 2016, but lifted borrowing costs Listed banks in Qatar continue Overall profi tability for listed with the specifi c capital-raising have been applied in more devel- ket, given the funding cost pres- three times last year amid a strengthening economy and to have some of the lowest cost- Qatari banks has increased year- activities undertaken. oped fi nancial markets, covering sures being faced, as well as the labour market. to-income ratios (CIR) in the re- on-year by 5%. All banks, except In addition, the regulatory cap- areas such as stress testing, capi- increasing regulatory require- Although economic growth slowed to an annualised rate gion, KPMG said. for two, reported an increase in ital adequacy requirements have tal planning, liquidity manage- ments, such as Basel III and IFRS of 2.3% in the first quarter, a period that has tended to be At 29.5%, Qatar’s listed banks net profi t from 2016, with con- been, and continue to, increase ment and recovery and resolution 9. We expect there to be contin- weaker in recent years, and job gains cooled in March, a have the “lowest” CIR, on average ventional banks outperforming with the gradual phasing in of Ba- planning. ued control around the cost side pickup is expected in the months ahead, fuelled in part by across the GCC, refl ecting “cost their Islamic counterparts. sel III regulations, with the mini- Currently, 18 banks operate of the business to ensure profi t- the Trump administration’s tax cuts and fiscal stimulus. consciousness” across the sector This increase can be primarily mum capital adequacy regulatory under the QCB, of which 11 are able growth remains and cost-to- The economy is now in its second-longest expansion since and the country as a whole. attributed to higher net interest requirement expected to reach national banks. Four of these are income ratios are maintained at World War II. All except two banks, both in income and a decrease in costs, 17% for some banks by 2018. Islamic banks. low levels.” Milaha launches direct container feeder service German envoy lauds Qatar’s between Qatar and Iraq eff orts to fi nd new markets Milaha, a Doha-based maritime transport more convenience through greater port and logistics conglomerate, launched a coverage and reduced transit times,” said direct container feeder service between Milaha’s president and chief executive Qatar and Iraq. Abdulrahman Essa al-Mannai. and ‘recalibrate’ businesses The new service, which will be an expan- This new service will contribute to the sion of the existing Qatar-Kuwait service reconstruction eff orts in Iraq, and will that the company launched last year, will also help boost the growing trade and By Peter Alagos the sidelines of the recently-con- ing eff orts to resolve the Gulf crisis follow a Hamad Port-Umm Qasr (Iraq)- economic relations between Qatar and Business Reporter cluded Hannover Fair 2018, Muzel “as quickly as possible.” Shuwaikh (Kuwait)-Hamad Port rotation, Iraq, he said. said “while Qatar has lost some “It is a regional crisis and they are and will be initially served by one vessel Milaha continues to enhance its interna- markets in the region, it gained going to solve it, but we, as many with a 1,015 TEU (twenty foot equivalent tional presence and diverse portfolio of ermany has lauded the Qa- even more customers in the vicinity other partners – the US, France, unit) capacity and 110 reefer plugs. maritime and logistics services. Since last tari government, including and up to Asia.” and Germany - we’re putting our The service will have a transit time of two year, the company has expanded into Gmajor private sector players, “This is a new challenge but hands together to assist in fi nding days, making it particularly ideal for dry several new shipping routes and acceler- for its eff orts to “recalibrate” the as you take it positively, this just a quick and proper solution so that and refrigerated food stuff , consumer ated deployment of new supply chain country’s business environment shows how vibrant Qatar is, and we can restart and reboot the situ- electronics, and construction materials, solutions across a number of countries.