The appetite for Sukuk in Qatar has been on the rise, with US$3.1 billion raised through eleven issuances of Sukuk in the first half of 2013.
The political turmoil in Egypt continues to have an effect on Qatari financial institutions with large exposure in that country. S&P recently downgraded the stand-alone credit profile of Qatar National Bank (QNB) from ‘a-‘ to ‘bbb+’, citing QNB’s acquisition of Nationale Société Générale Bank (NSGB) and the weak operating environment in Egypt. S&P however did also affirm QNB’s ‘A+’ long-term and ‘A-1’ short-term counterparty credit ratings with a stable outlook.
The balance sheet of Qatar’s Islamic banks is expected to grow to US$100 billion by 2017 (up from US$54 billion at the end of 2012) on the back of a surge in demand for local credit to finance government infrastructure and investment projects. The Islamic banking sector in Qatar has grown more quickly than the banking sector as a whole over the past few years as a result of the government’s supportive measures, including the prohibition on Islamic windows for conventional banks.
Originally published in Islamic Finance news Volume 10 Issue 40 on October 9, 2013.
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