Market News

After Fitch downgrade, Qatar chief says banking sector strong

DUBAI, Aug 29 (Reuters) - Qatar’s banks are capable of withstanding the pressure of sanctions imposed by other Arab states, and routine stress tests show the banking sector is strong and efficient, Qatari central bank governor Sheikh Abdullah bin Saud al-Thani said on Tuesday.

Sheikh Abdullah was speaking in a statement issued after Fitch Ratings lowered Qatar’s credit rating by one notch to AA-minus with a negative outlook on Monday, bringing Fitch into line with assessments by the other two major rating agencies, Moody’s and Standard & Poor’s.

Qatari banks are highly solvent and profitable, and data released in the central bank’s monthly report show they are liquid, Sheikh Abdullah added. He said the central bank was strictly following international standards in regulating banks, especially with regard to capital adequacy and liquidity.

In addition, the central bank has taken extra precautionary measures in response to the sanctions, he said without elaborating.

Geopolitical risks were a big factor in the rating agency’s decision but the central bank believes the agency will change its decision in the very near future, Sheikh Abdullah added. (Reporting by Andrew Torchia)