The Qatar banking industry will strongly grow in future as the investment is rising and business conditions are favorable for growth, says EFG-Hermes.

The banking industry of Qatar will continue to boom in future, says EFG-Hermes, an emerging investment bank in the Arab world, as reported by The Peninsula.

The EFG-Hermes disclosed that lending segment of Qatar banking industry has been growing at annual rate of 42% for last three years (2005-2007). Top three local banks, Qatar Islamic Bank, Qatar National Bank and Commercial Bank collectively hold 65% of the loan market in the country.

The prediction for the Qatar banking industry is mainly based on the lending segment in the country. The government investment in infrastructure development, initiation in gas and several other development projects will boost the credit system. Besides, financing projects would create favorable business environment for growth of the Qatar banking industry.

Moreover, the main housing projects keep the newly resident workforce into consideration alongwith the investors, highlighting the fact that there has been a shift in country’s economy from industrial based to knowledge-based economy. The local population of Qatar is merged with local economy in both ways as consumers as well as labor resulting in high growth of the country’s banking sector instead of mere collectors of economic rent.

Furthermore, the loan segment of the Qatar banking industry is strongly growing on the back of rapid economic growth and massive liquidity. Heavy flow of investment is also contributing to the Qatar banking industry. Moreover, the market is relied upon success of the Qatar approach and the resource based economy. The development projects underway reflect strong growth of the industry in future. Hence, the prospects of Qatar banking industry are very bright and indicting towards strong growth in future.

Besides, EFG-Hermes forecasted for the Qatar banking industry and said that the industry has a bright future and will grow strongly amidst increasing competition within the existing players.

According to a research analyst at RNCOS, “As the economy of Qatar is booming due to favorable business conditions, the Qatar banking industry is growing at a rapid pace. The Islamic banking industry has a bright growing prospects with increasing number of players are entering in the market. This will also help in providing quality output and better services.”

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