Author: Al Emid

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Global Finance sat down with Ali Ahmed Zayed Al-Kuwari, group CEO at Qatar National Bank, at his office in Doha, to discuss Qatar’s economic situation in light of the drop in oil prices.

Global Finance: Let’s start with the drop in oil prices. How is Qatar coping with the loss or revenue?

Al-Kuwari: The government already started this journey [to diversification] much earlier. They used the good days to build very strong reserves and settle the debt, and this is already reflected actually in the government numbers. [The numbers were] also encouraging the private sector. They want to have the private sector lead the economy—not only the government spending. This is very similar [to] what you see in Saudi Arabia, the UAE, [United Arab Emirates] and Arab countries. The journey already started, actually.

The fundamentals remain very good for Qatar. The [government] budget was set at $67 [per barrel]. That was very conservative. The government has the flexibility to manage, to focus on the key projects.

We look to the analysts [who are] talking about $56 on average for 2015, jumping to $60 to $64 by next year and then $69 in the following year. Still, at these numbers, it’s very good.

The government has the flexibility to manage and focus on the anchor projects for Qatar, which are infrastructure projects, and it has sufficient surplus to deal with them.

GF: Given what’s happened with the price of a barrel of oil, will the bank look to alter its business model at all? Will you begin to venture into new areas?

Al-Kuwari: No. We are on our diversification journey [which] started much earlier. When we did the budget, we assumed a much lower number than $60 for the oil, so we are dealing with that conservatively. We have a very strong name, very strong brand, very strongly rated bank, very well-recognized bank: the Qatar champion!

GF: There are basically two pulls going on. One pull says that in order to hedge against the future, banks should diversify. The other is that as the global marketplace changes, some banks may keep more capital at home. Clearly you are committed to Africa, but what is your view of those two seemingly contradictory strategies?

Al-Kuwari: Seventy percent of our business comes from Qatar. Frankly, even if we capture more share in Qatar—let’s say 50%—[it] still would not be sufficient for me to achieve my real [growth] goal, so I will really have to rely on other economies.

GF: Do you think that the banks in Qatar escaped any fallout from the Arab Spring?

Al-Kuwari: Yes, that’s a fair statement. I didn’t see any exposure. We actually did very well and continue to do very well. We did have exposure to some of these countries, but it’s very small and didn’t affect our overall performance. 



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