Qatar well placed to take advantge of global sukuk

The Peninsula: According to a newly issued report by Oxford Business Group (OBG), Qatar is well placed to take advantage of the global sukuk, or Islamic bond market which could grow by as much as 35 percent globally in the next few years.

Although Qatar Islamic Bank being established in 1982, the segment has, until recently, played a minor role in the overall financial sector.

However, the report remarked that the situation is now changing. Over the past 18 months, new institutions, both local and foreign, have appeared and existing ones have broadened their activities. Even non-Islamic banks are getting in on the act and opening up Islamic windows.

This follows a GCC-wide trend towards sharia-compliant services, in particular investment and banking.

As for Qatar's banking sector in general, the OBG report said the combined net profits of the eight listed banks, have between them 85 percent of total assets and 92 percent of credit. This rose by an impressive 56 percent in 2007, despite competition from seven foreign banks and some 25 banks now registered at the Qatar Financial Centre (QFC).

Local banks are using their abundant resources to build a strong international presence. Among the listed local banks, Commercial Bank of Qatar (CBQ) was the healthiest in terms of profit with a 61.2 percent increase to approximately $382.8m in 2007, followed by Ahli Bank with a 49.6 percent increase to $83.4m while the country's largest bank, Qatar National Bank posted a 25.5 percent jump to $688.5m, according to the report

It said the retail market is where the big prizes could lie, with predictions that it could be worth $1.7bn by 2011-2012. There is room for growth, as use of internet banking and ATMs are well below the global average.

OBG launched its authoritative The Report: Qatar 2008, the latest of its annual business guides to the country on Sunday.

Rated as the premier guide for foreign direct investment into the country's vibrant economy, the 270 page publication, with an international distribution of 71,000, is published for the fifth consecutive year in partnership with Qatar National bank (QNB) for capital markets such as Clyde and Company for legal affairs and Deloitte for accountancy.

The Report features a series of exclusive interviews with leading political and economic figures conducted by a team of OBG analysts based in Qatar for six months.