His Excellency Sheikh Abdullah bin Saud Al Thani, Governor of Qatar Central Bank, praised the performance of Islamic finance in the State of Qatar, stressing that it is witnessing continuous development through updated policies and regulations to ensure its continued competitiveness at the regional and international levels.
In his introductory speech to a report issued by Bait Al-Mashura Financial Consulting Company on Islamic finance in the State of Qatar, His Excellency explained that the assets of Islamic finance in Qatar amounted to 528 billion riyals (144 billion US dollars), of which the assets of Islamic banks constituted 86 percent.
His Excellency noted during the speech the successful banking merger of Barwa Bank with International Bank of Qatar, which resulted in Dukhan Bank. He also referred to Masraf Al Rayan’s efforts to merge with another banking merger with Al Khaleej Commercial Bank (Al Khaleeji), noting that this step will contribute to strengthening the strength of Qatari Islamic banks globally. This new banking entity is expected to be the fifth largest Islamic bank in the world, with assets of $47 billion.
His Excellency the Governor added, “The global economy and the financial and banking sector went through an unprecedented crisis during the year 2020 represented by the effects and repercussions of the Corona (Covid-19) pandemic, and this crisis posed a new challenge to the financial and banking system in the State of Qatar, thanks to the measures that were taken. Which focused on ensuring business continuity, supporting liquidity, and providing targeted support to the affected sectors. We were able to mitigate the effects of this shock, maintain the flow of credit to the economic sectors, and achieve financial and banking stability in the country.
His Excellency continued: “During this crisis, banks witnessed a state of pressure on their systems and budgets through the requirements of harmonization between the continued granting of credit, the reclassification of assets and the monitoring of provisions for credit losses, and the banks in the State of Qatar continued to apply the accounting standard for calculating the provision for expected credit losses, in addition to Updating the construction of scenarios used to determine credit losses according to a more conservative view, however, the results of the banking sector were good, as banks maintained their asset quality standards and credit grew by 8.6 percent.
His Excellency the Governor stressed that financial technology is no longer an option, but rather an urgent necessity that should speed up the adoption of its applications, noting that the current crisis has revealed the ability of the banking sector in the State of Qatar to adapt quickly to changes and adopt technological solutions in accordance with the best technical standards and preventive and supervisory controls.
His Excellency continued, “Banks and other financial institutions have continued to provide their services through their electronic applications smoothly and safely. During this year (2020) we have launched a number of central financial technology systems, including the “Qatar Mobile Payment System (QMP)”, and we will continue to develop The financial and banking environment in the State of Qatar to achieve the Qatar National Vision 2030.
The report issued by Bait Al-Mashura Financial Consulting Company discussed the results of the work of Islamic financial institutions in the State of Qatar for the year 2020, and the report provided a clear picture of the performance of Islamic financial institutions and the financial and economic sector in the State of Qatar, with the aim of providing a knowledge base for institutions, researchers and those interested in the local Islamic finance sector.
In this context, Dr. Khaled Ibrahim Al-Sulaiti, Vice-Chairman of the Board of Directors of Bait Al-Mashura Financial Consulting, said that the Islamic finance sector has shown flexibility and solidity in facing the repercussions of the Corona pandemic in light of the great digital transformation witnessed by the sector, which produces new opportunities for growth.
Al-Sulaiti explained that the Islamic Finance Report in the State of Qatar 2020 issued by Bait Al-Mashura Financial Consulting reviews the performance of Islamic financial institutions in the State of Qatar, including Islamic banks, Takaful insurance companies, Islamic financing and investment companies, and also highlights Islamic financial products represented in investment funds, Islamic sukuk and market movement. Islamic Finance.
He added: “We at Bait Al-Mashura have taken it upon ourselves to strive to constantly improve and develop our products, to provide the best and finest service to the Islamic financial industry and to the community inside and outside the State of Qatar. As we make this effort, we invite researchers, specialists and Islamic finance pioneers to intensify efforts to advance the Islamic finance industry from Through their research efforts and creative ideas that believe in the authenticity of the Islamic economy and its role in pioneering the financial industry and overcoming crises.”
The Islamic finance report in the State of Qatar 2020 showed that the Corona pandemic cast a shadow on the global economy and the financial and banking system, and the global Islamic finance sectors were affected to varying degrees, and due to the policies, procedures and package of incentives provided by the State of Qatar, the effects and repercussions of that pandemic on the economic and financial sectors were mitigated. and cash.
The report indicated that the total assets of Islamic finance in Qatar in the year 2020 amounted to about 528 billion riyals, the assets of Islamic banks constituted 86%, and the existing sukuk amounted to 12%, and the assets of Takaful insurance companies accounted for approximately 1%, while the assets of investment funds and financial institutions constituted Other Islamic around 1 percent.
According to the report, the assets of Islamic banks in Qatar witnessed a growth of 8.4 percent in 2020, and deposits grew by 8.7 percent, in which private sector deposits represented 56 percent. It was also noted that non-resident deposits returned and exceeded the rates before the 2017 crisis, and finances grew by 7.9 percent concentrated. In the government, semi-government, real estate and personal finance sectors, despite the growth in revenues by 3.4 percent, profits decreased by 2.6 percent, affected by the increase in provisions for expected credit losses that were calculated, which amounted to 6.7 billion riyals, compared to 6.9 billion riyals in 2019.
In the Takaful insurance sector, the assets of insurance policyholders amounted to 2.2 billion riyals, and insurance contributions amounted to 1.3 billion riyals, and due to the decrease in insurance claims due to the ban, closure and general movement restrictions, the insurance surpluses in these companies rose to 149 million riyals.
The report indicated that the assets of the Islamic finance companies amounted to 2.6 billion riyals, while the revenues recorded 242 million riyals, of which the revenues of financing activities constituted 96 percent. In the sector of Islamic investment companies, the performance of the two investment companies varied between growth and decline, achieving profits and recording losses, and the decline in the performance of the investor company affected The first on the sector, as the assets of the two companies amounted to approximately 540 million riyals, down by 6.2%, and revenues decreased by 38%, and one of the two companies made profits and the other recorded losses.
In the field of Islamic sukuk, no government sukuk was issued in the year 2020, and Islamic banks issued sukuk amounting to nearly 8 billion riyals, and in Islamic investment funds the total assets of these funds amounted to approximately 895 million riyals, and the performance of all these funds was positive during the year 2020.
In the Qatar Stock Exchange Al Rayan Islamic Index, despite the decline in the index at the beginning of the year 2020 due to the repercussions of the pandemic, thanks to the economic stimuli that were taken, the index rebounded to close with an increase of 8.06 percent in 2020 compared to 2019.
The report said that the Islamic financial sector in the State of Qatar diversifies to include four main sectors: Islamic banks, Takaful insurance companies, Islamic finance companies, and Islamic investment companies, in addition to Islamic financing products represented by sukuk, investment funds and Islamic indices. These institutions operating in these financial sectors are subject to the direct supervision of the Qatar Central Bank, in addition to the presence of some financial institutions that practice Islamic finance activities within the framework of the Qatar Financial Center.
The report noted that the banking sector in the State of Qatar includes four Islamic banks out of a total of seventeen banks, including five traditional local commercial banks, a specialized bank (Qatar Development Bank), and seven branches of conventional foreign banks, in addition to the presence of a representative office for a foreign bank and Islamic banks operate. Qatar through a network of internal and external branches amounted to more than 70 branches and offices.
The report indicated that the Qatar Central Bank includes under its supervision a number of insurance companies, including five independent takaful insurance companies: the Qatar Islamic Insurance Company, the Gulf Takaful Insurance Company, and the Daman Islamic Insurance Company (Beema), in addition to the General Takaful Company of the Qatar General Company. Insurance and Reinsurance Company, and Doha Takaful Company, a subsidiary of Doha Insurance Group. Five national conventional insurance companies, and four branches of foreign conventional insurance companies, in addition to representatives of four conventional insurance companies, operate in this sector.
Also, three Islamic finance companies operate under the umbrella of the Qatar Central Bank, along with two investment companies and five Islamic investment funds, which are: The Financial House Fund, Al Rayan Fund for the Gulf Cooperation Council (Q), Al Rayan Fund for the Gulf Cooperation Council (A), and the First Investor Fund for Investment Opportunities. Capital in the Gulf Cooperation Council (s) and Al Rayan Qatar ETF. These funds operate inside and outside the State of Qatar in addition to the Qatar Stock Exchange Al Rayan Islamic Index, which is one of the indicators of the total return as it reflects the price performance in addition to the revenues obtained from reinvesting the dividends of listed companies.