Abdulla Saleh Al Raisi, Former CEO, The Commercial Bank of Qatar (CBQ): Interview

Interview: Abdulla Saleh Al Raisi

How do you foresee loan books performing, given the current public spending drive?

ABDULLA SALEH AL RAISI: Under the wise leadership of Sheikh Tamim bin Hamad Al Thani, emir of Qatar, there is a focus on sustainable economic development. A large fiscal surplus has enabled the continuity of the public investment programme despite global economic volatility.

During the Institute of International Finance’s Doha conference, Sheikh Abdullah bin Nasser bin Khalifa Al Thani, prime minister and minister of interior, indicated that Qatar’s economy was expected to grow 7% in 2015, up from 6% in 2014, and reiterated Qatar’s commitment to investment in key sectors, namely infrastructure, health and education, and the transition to a knowledge-based economy. Furthermore, in the run up to the 2022 FIFA World Cup, Qatar is committed to launching large projects, with an estimated total value of $200bn, over the next seven years. We at CBQ are confident there will be significant opportunities for sustainable loan book growth for the next few years.

How much funding will come from private sector banks in support of public projects?

AL RAISI: Private sector banks have long been associated with growth efforts in Qatar, and fair competition between the banks in Doha has been encouraged and supported to serve the interests of the economy. CBQ is committed to funding public projects and will be happy to further contribute to the Qatari economy’s growth. Specifically, we believe that CBQ will be able to maintain its medium-term growth trajectory, benefitting from the bank’s well-established presence in sectors that benefit from current infrastructure expenditure levels. We are confident that CBQ can grow its market share of public sector loans in coming years.

Which markets offer the greatest expansionary opportunities, given current market conditions?

AL RAISI: The challenges faced by mature financial markets such as the US and Europe over the last few years have created an opportunity for emerging markets to establish new and much needed pockets of growth for international investors. CBQ has seized this opportunity by acquiring a majority stake in Turkey’s AB ank in 2013. In addition to the Turkish market, we believe Asia and Africa will have the most promising areas of growth among emerging markets.

How is the local banking sector supporting business growth in the lead up to the 2022 FIFA World Cup?

AL RAISI: The World Cup will definitely constitute a major milestone for Qatar in the next several years. The Asian games provided a good opportunity for the public authorities and the banking sector in Qatar to become familiar with the challenges and constraints associated with the organisation of such major sporting events. At CBQ we are excited about the opportunities associated with the World Cup throughout the value chain derived from such an event, in construction, services, transport and other economic sectors. We are prepared to support all economic factors associated with the World Cup as we do not only see this as an economic opportunity, but as our contribution to building Qatar’s reputation in international sports.

Do you expect the decline in oil prices will have an effect on overall lending during 2015?

AL RAISI: Although we are monitoring the trends on the international energy markets, we do not believe at this stage that even a prolonged period of lower oil prices would cause material reductions or delays in public infrastructure spending. Moreover, we believe that optimised fiscal budgeting and enhanced project management will improve sustainability, and ultimately prove a positive factor for growth in coming years. Furthermore, Qatar's public reserves are a significant, if last resort, backstop and mitigating factor against the risks posed by declining energy prices. Those factors provide us with strong confidence in the banking sector’s sustainability for overall lending growth in 2015.