We are currently witnessing the annual Gulf summer slowdown as locals and expats travel during their annual leave. This year, the quiet period has been exacerbated by the GCC diplomatic fallout. Three of the GCC nations (together with Egypt) have imposed a land, sea and air blockade on Qatar.
The banking sector is of course not exempt from both factors, with activity slowing down considerably over recent weeks.
Local banks have either disclosed or will soon begin disclosing their second quarter and half-yearly results and that would be an important time to assess how the market is faring in the current climate.
Qatar National Bank (QNB) recently disclosed its results for the six months ended the 30th June 2017. It stated that the results were the highest in the history of the QNB Group. Net profit reached QAR6.7 billion (US$1.79 billion), up by 7% compared with 2016, and total assets reached QAR768 billion (US$205.7 billion), up by 11% from June 2016, the highest ever achieved by the group.
In other news, Qatar International Islamic Bank (QIIB) announced that international credit rating agency Moody's Investors Service has affirmed QIIB's rating for the second consecutive year at 'A2'. QIIB CEO Abdulbasit Ahmad Al-Shaibe said: "QIIB's rating affirmation at this good level is a natural reflection of the strength and high quality of the Qatari economy and an evidence of the confidence in the strength of this economy in various circumstances and against any unexpected developments and risks."
On the transactions side, The First Investor (TFI), the investment banking arm of Barwa Bank, in collaboration with Inovalis, successfully introduced the first REIT exposure structure for Qatari investors. The REIT Income Shariah Certificate provides exposure in the US dollar to European high-quality real estate assets (primarily Germany and France). Returns are linked to the income and capital gains of the shares of the Inovalis REIT and indirectly to the appreciation of European properties owned.
All eyes will be on the fast-changing geopolitical landscape in the GCC and how this will impact upon all of the countries embroiled in the fallout.
Currently, it seems that the Qatari economy continues to show a high degree of resilience as the authorities have taken measures to protect the market. This, combined with a general de-escalation of tension which we are witnessing, is likely to encourage further stability in the region in the coming months. This will be a welcomed develop t summer months.
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