Qatar Bankers Want to Know Who Their Friends Are in Gulf Scrap

  • Regulator compiles list of foreign banks scaling back business
  • QNB will work more with banks ignoring international pressure

Al Ramz Capital Doesn't See an Easy Recovery for Qatar

It’s good to know who your friends are when times are tough.

Qatar’s banks are keeping track of which foreign partners have maintained business with them and which ones have scaled back lending during the boycott of the Gulf country by a Saudi-led bloc that started in early June.

The central bank wants to draw up a list that may be used when deciding who to give future business to in Qatar, according to three bankers briefed on the matter. 

The largest commercial bank, state-owned Qatar National Bank, is monitoring which foreign institutions have ignored pressure and will "decide in the long term to focus our business with partners that were not influenced by the current situation," a spokesman said on Wednesday. It was "normal banking practice" at the lender, known as QNB and chaired by the finance minister, and not instigated by the central bank "or any government agency," he said.

It shows how international bankers are having to navigate a political minefield as the diplomatic spat in the Gulf pits some of the region’s largest countries against the world’s richest nation per capita. Qatar is spending billions of dollars on preparing to host the soccer World Cup and turn Doha, the capital, into a regional hub.

Severing Ties

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic ties and transport routes with Qatar on June 5 after accusing the nation of destabilizing the region with support of Islamist movements, a charge Qatar vehemently denies.

The bankers, who asked not to be identified because of the the sensitivity of the situation, said the idea of a list of foreign institutions was driven by the central bank, whose governor summoned the heads of the country’s lenders shortly after the boycott started. Qatar’s central bank asked them to rate whether international banks increased, kept steady or reduced their business.

The central bank declined to comment.

While Qatar gets its riches from exporting liquefied natural gas from a giant field it shares with Iran, the showdown with the Saudi-led group is taking its toll. The central bank has told its banks to tap international investors to raise financing, instead of mainly relying on government funding, people familiar with the matter said. Foreign deposits in Qatari banks declined 7.9 percent in July from June.

On the other side, officials in Abu Dhabi, the U.A.E.’s wealthiest and largest sheikhdom, have told bankers that global lenders with large Qatari shareholdings aren’t likely to win any significant contracts in Abu Dhabi, the Financial Times reported on Aug. 9. 

Those include Credit Suisse Group AG, Barclays Plc and Deutsche Bank AG, all of which Qatar’s sovereign wealth fund or members of the nation’s ruling family hold stakes in, the London-based newspaper reported.

— With assistance by Matthew Martin

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