Escalation in Gulf Deals Blow to Qatari Banks
- Banking system relies largely on foreign cash for liquidity
- Country due to host $200 billion soccer World Cup in 2022
Construction of the al-Wakrah World Cup stadium outside Doha.
Photographer: Marwan Naamani/AFP via Getty Images
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Qatari banks, already stretched by financing demands of the $200 billion 2022 World Cup, took a head-on blow from its neighbors’ abrupt decision to cut economic and diplomatic ties.
At risk are the foreign deposits—especially from the six-nation Gulf Cooperation Council—that have helped sustain institutions like Qatar National Bank QPSC, the region’s largest by assets, and Doha Bank QSC. Lenders in Qatar and across the GCC have already struggled with declining cash reserves and higher interest rates after governments used bank deposits to maintain spending in recent years amid declining oil prices.