Moody’s gives 9 Qatari banks negative outlook

CAIRO – 5 July 2017: Moody’s Investors Service affirmed long-term ratings for 10 Qatari banks. The outlook of nine banks has changed from stable to negative, the international rating agency said Wednesday.

Weakening domestic environment and funding of banks prompted Moody’s to lower its Macro Profile for Qatar from Strong- to Moderate+. Moody’s also supported downgrading the outlook for banks.

“The rating action reflects Moody's expectations that a prolongation of the current dispute could lead to some outflow of external funding, which would reduce the banks' liquidity buffers. Domestic funding sources remain tight due to current oil prices,” the rating agency said.

Qatar’s outlook was lowered from stable to negative on 4 July by Moody’s, affirming the long-term issue and senior unsecured debt ratings at Aa3. The debt rate reflects low credit risk.

Moody’s said the main motive is the economic and financial risks arising from the ongoing dispute between Qatar and opposing countries. The disputes also include its fellow Gulf Cooperation Council (GCC).