International lenders give Qatar a supporting hand amid Gulf crisis
If people in Qatar were worried about facing a shortage of money that can be withdrawn from the bank, they should not worry any more.
This is because a few large Asian, European and US banks have come forward to provide funds to help to keep Qatari banks running smoothly after a diplomatic rift dried up financing from the UAE, Bahrain and Saudi Arabia, reported Gulf Times.
The foreign banks’ support is critical for Qatari banks, whose reliance on international funding has grown sharply over the years to about $50bn as of April, or around a quarter of their domestic loans, Standard & Poor’s estimated. That is up from 13.2% at the end of 2015.
The UAE central bank had asked banks under its jurisdiction to apply ‘enhanced customer due diligence’ when dealing with six Qatari lenders, including the biggest, QNB.
Bankers said UAE, Bahraini and Saudi banks have in general halted all new business with Qatar.
But some international banks are not pulling back because they are reluctant to cut lucrative business ties with Qatar built up over the years, reported Qatar Tribune.
They also see attractive opportunities related to Qatar's multi-billion dollar infrastructure projects before it hosts the 2022 FIFA World Cup.
“International banks will be less knee-jerk than the local banks as they don't want to cut off their nose to spite their face,” a compliance executive at a foreign bank said.
Commerzbank, UniCredit and Mizuho Financial have been the top three lenders to Qatari banks in the past three years. First Abu Dhabi Bank is the largest Gulf lender to Qatar's banks, according to Thomson Reuters LPC data.
Some European, Asian and US banks, as well as banks from Kuwait and Oman, are still lending new money to Qatar, according to sources. Kuwait and Oman belong to the six-nation Gulf Cooperation Council (GCC) but are not participating in the Saudi-led embargo.
“We’re unscathed so far,” one Qatari banker said. “The panic has eased as we’ve been able to continue receiving funding, though there’s certainly no complacency about the risks that remain.”
