CI Ratings shoots negative outlook to 6 Qatari banks

CAIRO – 26 July 2017: Six Qatari banks were given negative on potential risks, international credit rating agency CI Ratings said Wednesday.

The six banks are the Qatar National Bank (QNB), Ahli Bank of Qatar, The Commercial Bank, Doha Bank, Qatar Islamic Bank and Qatar International Islamic Bank (QIIB).

Largest bank in the Arab region in terms of assets, the QNB, had its outlook on the Long-Term Foreign Currency Rating (FCR) of ‘AA-‘ lowered to negative, as well as Qatar Islamic Bank’s long-term FCR of ‘A+’.

As for the QIIB, CI Ratings lowered its Long-Term Foreign Currency Rating (FCR) of ‘A’ to negative, while keeping the Financial Strength Rating (FSR) of 'A-' as stable.

Doha Bank also had its long-term FCR of ‘A+’ downgraded to negative outlook, while maintaining short-term FSR affirmed at ‘A2.’

CI Ratings also lowered long-term FCR of ‘A-‘of the Commercial Bank to negative, and the short-term FSR are left unchanged at BBB+ and a stable outlook.

The same case happened with the Ahli Bank Qatar, with long-term FCR lowered and short-term FSR remained stable at ‘A-‘rating.

Qatar’s sovereign credit and liquidity of the banking sector were expected by CI Ratings to be impacted by the diplomatic rift of four Arab states with Doha.

In case the crisis is prolonged, higher funding costs will likely occur as a result of higher risks and lower cross border funding from Qatari banks, the Cyprus-based think-tank explained in a June report.

The crisis will vary from bank to bank. The impact of the crisis will be measured by the extent of deposits from abroad that stay within the Qatari banking system, it said.