Qatar Bank CEO Says Liquidity Better After $9 Billion Bond Sale

EghtesadOnline: The availability of funds in the Qatari banking system, which earlier this year became a more serious issue than during the 2008 financial crisis, is improving after the country’s $9 billion bond sale in May, Doha Bank QSC Chief Executive Officer Raghavan Seetharaman said.

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30 August 2016

“The second quarter was an improvement compared to the first quarter, and the third quarter has also been following the right trend," he said in a TV interview with Bloomberg Markets Middle East on Tuesday. "We’re likely to see similar in the coming quarters."

Bank liquidity in the six-nation Gulf Cooperation Council, which includes the United Arab Emirates and Saudi Arabia, has been tightening as a more than 50 percent slump in crude oil prices since mid-2014 slows deposit growth and pushes governments to boost borrowing. The situation in Qatar became a bigger issue at the start of the year than it was in 2008, Seetharaman said in May, the same month that the government sold $9 billion of Eurobonds in the Middle East’s biggest-ever bond issue, reports Bloomberg.

Lenders in Qatar had experienced “extraordinary stress” this year amid the tightening liquidity and were forced to adapt their businesses to the low-oil environment, Seetharaman said in May. Banks were also facing a narrowing in net interest margins and higher interest expenses, he said. With the $9 billion bond sale, the cost of funding is also coming down for banks, Seetharaman said on Tuesday.