Pressure on Qatari Banks’ Profitability Could Lead to Further Consolidation: Fitch Ratings

Qatar’s banking system could see more consolidation triggered by pressure on banks’ profitability from the COVID-19 pandemic, according to a recent statement by Fitch Ratings (Fitch).

Describing Qatar’s market as ‘overbanked’, Fitch stated that banks with weaker franchises and limited pricing power would benefit from more consolidation. In addition, common government ownership is also a key driver for consolidation to create banks with better capital and heightened competitive advantages to support the Qatar Vision 2030 development plan, according to Fitch.

Fitch noted that the recently agreed merger between Al Khalij Commercial Bank (AKCB) and Islamic bank Masraf Al Rayan (MAR) could potentially create the country’s largest Islami...