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Qatar is one of the world’s fastest-growing economies with one of the highest per capita gross domestic products (GDP). By 2010, Qatar will produce 6 mbpd (million barrels per day) equivalent in oil, liquefied natural gas (LNG) and Gas to Liquids (GTL), and will be the world’s largest exporter of LNG.
Qatar is investing the equivalent of US$500,000 per citizen in its economic and social infrastructure. Qatar is building a knowledge-based economy (e.g. GTL technology, QSTP, Qatar Foundation).
Qatar is quickly growing into a financial hub with its financial and business services being the second largest non-oil activities. This sector has almost tripled in size since 2004.
The Qatar Financial Centre (QFC) lies at the heart of Qatar’s dynamic economic growth. The project to create a single regulator will further enhance Qatar’s regional standing. Apart from that, its capital markets are developing rapidly.
QFC is neither an offshore center nor a free zone. Firms can provide a wide range of financial services in banking, insurance or securities businesses. QFC allows 100% ownership by foreign companies, and all profits can be remitted outside Qatar.
The country’s re-investment of hydrocarbon revenues toward diversification has resulted in robust economic growth across the GCC. This has opened avenues for banking services like commercial banking, project finance, investment banking, private banking and Islamic finance, insurance and reinsurance, and investment management.
The banking sector in the GCC is quite small with total assets of the GCC banks at US$741 billion in 2006, making up 0.5% of global banking assets.Total assets in GCC banks are growing faster than GDP growth rates, indicating rising penetration levels. Qatar has a small market share of the GCC banking assets but one of the highest asset growth rates. This demonstrates the high potential and opportunistic time in the Qatar banking sector.
The growth in the Qatar Investment Authority (estimated at US$60 billion) represents the rapid rise of institutional wealth in Qatar providing additional opportunity within asset management. The QFC legal and regulatory framework allows for retail insurance business as well as reinsurance. Qatar’s high growth rate but low relative market share demonstrates that it is one of the high-potential markets in non-life and life insurance.
As at the 31st July 2008, there were 87 licensed firms at QFC: 34 are banks and financial institutions, nine are insurance firms, six are investment firms and the remaining 38 are non-regulated firms. Of those 87 firms, 49 or 56% are able to conduct financial services supervised by the regulatory authority. Of the regulated firms, 36% are rated by global rating agencies as compared to 10% at the Dubai International Financial Centre (DIFC) while 22% are listed in Fortune Global 500 as compared to 6% at DIFC.
Qatar will continue to be one of the world’s fastest-growing economies over the next decade with the highest per capita GDP. The government of Qatar is committed to invest US$145 billion in projects in Qatar across all major sectors.
QFC offers clients a tangible value proposition based on Qatar’s asset-based economy. Qatar is creating a sustainable industrialized economy based on reserves of natural gas that are expected to last 200 years.
Prior to joining QFC in 2005, Desmond Holmes was the general manager of International Bank of Qatar. He has been a career banker for 23 years, with 10 years’ international experience, mostly with ANZ Banking Group. |
