Strengthening financial ties between China and Qatar are likely to open up new opportunities for Qatari banks to tap into.

Qatar and China already have close relations, with the Asian giant already the fifth-largest importer of Qatar’s exports, which are dominated by oil and gas.

But the two countries are set to become even closer following the signing of several agreements between the two central banks in early November, including a currency swap deal and a preliminary deal to establish Qatar as a Renminbi clearing and settlement centre.

These deals are likely to bring new business opportunities for the ambitious Qatari banks, which are eager to expand beyond Qatar and generate new sources of revenue.

The currency swap agreement will also open up the chance for banks in Qatar to do trade finance transactions in renminbi instead of US dollars.

Armed with high levels of liquidity, Qatar’s banks have been acquiring assets beyond their borders in recent years. QNB bought into an African bank in September this year, and Commercial Bank of Qatar acquired a stake in a Turkish institution late last year.

China could be the next market to focus on.

Indeed, Abdullah bin Saoud al-Thani, Qatar’s Central Bank governor, said in a conference this week he expected to see more Qatari banks opening up in China in the coming years.

QNB Bank already opened a representative office in Shanghai last year and would inevitably like to expand further into the country.  

Commercial Bank of Qatar has also indicated that China and the wider Asian region is an attractive reason for expansion.

Qatar’s banks have a large appetite for growth and China is likely to be a particularly appetising market.