Doha
Qatar’s Islamic banking landscape, whose operational performance was better than the conventional peers in 2019, offers potential for further consolidation, according to Fitch, an international credit rating agency. “The M&As (mergers and acquisitions) are still possible to create larger Islamic institutions in the market,” Fitch said in a report. This comes in the wake of Masraf Al Rayan and Al Khaliji contemplating M&A to create the third largest Islamic lender in the country. The potential merger would lead to the creation of one of the largest Shariah-compliant banks in Qatar and in the Middle East with total assets exceeding QR164bn and shareholders’ equity of more than QR19bn. The proposed merger would be the second consolidation in Qatar’s banking system after Barwa Bank merged with International Bank of Qatar in 2019 to create Qatar’s third-largest Islamic bank and sixth-largest bank overall. Masraf Al Rayan is currently Qatar’s fourth-largest bank, with a 6% share of banking system assets at the end of December 2019. Al Khaliji is one of the smaller banks in Qatar, with a market share of around 3% of system assets as of the same date. Masraf Al Rayan has a strong relationship with the Qatari government, with loans to the government and public-sector entities making up around 47% of its financing book at year-end 2019.—Agenceis
