Nine-month total assets of 8 listed commercial banks up 3.7% to QR1.69tn: PwC
The total aggregate assets of eight listed commercial banks in Qatar grew 3.7% in the first nine months of 2020 to reach QR 1.69 billion, according to a PwC report.
Local banks showed steady growth in 2020 despite the implications of the Covid-19 pandemic, according to the PwC study.
Findings from PwC’s latest 2020 Qatar Banking Sector Report, covering eight listed commercial banks, revealed that Qatar financial institutions are accelerating transformation programs to build financial institutions of the future aimed at increasing profitability and lending business by reaching out to new customer segments.
As restrictions taken in the first half of 2020 gradually ease, the next six months will provide the rare opportunity to embrace change at an unprecedented rate with businesses and customers alike.
To design the financial institutions of the future, there are key priorities to focus on, including integrating digital into traditional branches to attract a younger and digitally savvy customer base, as well as using new methods to assess creditworthiness and better understand the client. , noted PwC.
The positive growth recorded in the third quarter of 2020 accelerated between June 30 and September 30 of last year, when the total aggregate assets of the eight listed commercial banks increased the growth rate by 1.8%, compared with 0.13% growth between June and March. 2020.
On the income statement, the total profits of the eight listed commercial banks reached QR 17.1 billion, down 10.9% from the third quarter of 2019, PwC noted.
Profits remain under pressure due to an intensification of aggregate provisions over the nine months of 2020 (+ 13.2% vs FY 2019). However, between June and September 2020, provisions recorded only slower growth (+ 2.7% compared to H1 2020), testifying to the ability of the eight listed commercial banks to significantly control provisions in the last quarter. .
Consistently, the increase in the ratio of aggregate provisions to total loans and advances remained unchanged (3.09% in Q3 2020 versus 3.08% in H1 2020). Profitability was also affected by non-interest charges.
The eight listed commercial banks have taken measures to contain aggregate non-interest expenditure (personnel costs, depreciation, amortization and other expenses), which decreased by -28% compared to fiscal year 2019 to reach 8, 3 billion QAR.
However, the efficiency ratio (non-interest expense on income) recorded an increase of 1.22 PP, showing that the non-interest expense proportionately increased its impact on profitability.
Burak ZatitÃ¼rk, Qatar Financial Services Leader, PwC Middle East, said: âQatar’s banking sector is embracing change, and evidence can be found in Q3 2020 financial results. In light of recent lessons learned Over the past year, financial institutions now have the capacity to accelerate transformation programs in order to design the financial institutions of tomorrow.
The “Qatar Banking Sector Report 2020” shows that banks have steadily increased their lending activity, accelerating the pace of expansion by diversifying sources of funding through double-digit growth in debt securities and financing Sukuk.
Bassam Hajhamad, Senior Country Partner and Advisory Leader, PwC Middle East, said: âThe recent consolidation of large banks seen in Qatar will result in stronger financial institutions with significant liquidity available to support the country’s economic growth.
“Not only will this strengthen the country’s banking sector, but we also expect to see a positive impact on the local stock exchange as well as an increase in future transactions.”