The proposed merger of three banks in Qatar would create a more balanced competitive environment, says a ratings agency.
Currently, Qatar’s population of 2.6 million is served by 18 banks, one of which, Qatar National Bank, accounts for 40% of domestic assets.
“The merged entity between Masraf Al Rayan, Barwa Bank and International Bank of Qatar would help to rebalance the Qatari banking sector,” said Nitish Bhojnagarwala, assistant vice president at Moody’s.
The Qatari bank sector has benefited from abundant liquidity in recent years as the country has grown rich from exporting oil and liquefied natural gas.
Given the relatively few listed companies on the Qatari stock exchange, bank stocks have been one of the main ways investors have benefited from the country’s rapid development.
The proposed merger would create the largest Islamic bank and the second largest bank in Qatar, said Moody’s.
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