Banks lower lending criteria
Banks are increasingly aggressive in their consumer lending policies as Qatar's banking sector becomes more competitive, according to a new report from Moody's Investors Service.
'Increased competition has led to loosened credit policies.We view this as a very aggressive approach that could potentially lead to an increase in NPLs [non performing loans],'says the report on the banking system outlook for Qatar.
The demand for consumer credit is rising, with personal loans accounting for 38 per cent of total loans as of August 2006, up from 27 per cent in 2004, according to the report. The length of consumer loans to nationals has been extended to 15-20 years from seven years and banks lend up to 70-80 times monthly salaries. The percentage of NPLs to total loans was 4.3 per cent in 2005.
'In the last year, lending practices have become more aggressive in line with other GCC markets,' says a local retail banker. 'Qatar is catching up. Banks with a GCC presence have brought in regional practices.'
Banks are increasingly aggressive in their consumer lending policies as Qatar's banking sector becomes more competitive, according to a new report from Moody's Investors Service.
'Increased competition has led to loosened credit policies.We view this as a very aggressive approach that could potentially lead to an increase in NPLs [non performing loans],'says the report on the banking system outlook for Qatar. The demand for consumer credit is rising, with personal loans accounting for 38 per cent of total loans as of August 2006, up from 27 per cent in 2004, according to the report. The length of consumer loans to nationals has been extended to 15-20 years from seven years and banks lend up to 70-80 times monthly salaries. The percentage of NPLs to total loans was 4.3 per cent in 2005. 'In the last year, lending practices have become more aggressive in line with other GCC markets,' says a local retail banker. 'Qatar is catching up. Banks with a GCC presence have brought in regional practices.'This content is only available to full MEED package subscribers (MEED magazine and MEED.com).
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