The Arab countries that have cut ties with Qatar may have more to lose from the spat compared to the gas-rich state they are targeting, according to the group chief executive of the Middle East's largest bank by assets. CNBC reports in its article Chief of largest Middle East bank: Countries that started rift with Qatar have more to lose that the blockade, which first unfolded in June, saw Saudi Arabia, United Arab Emirates, Egypt and Bahrain accusing Qatar of supporting terrorism and allying with regional foe Iran. Qatar denied those claims, but its stock market and currency suffered from the initial shock of the crisis.
The country also experienced the largest fall in non-resident deposits in almost two years right after the rift began. Data by the Qatar Central Bank showed that non-resident deposits declined 7.6 percent to 170.6 billion Qatari riyals ($46 billion) in June from the month before.
Part of the money that left Qatar originated from the countries that initiated the blockade. But that was expected and represents only 3 to 4 percent of total deposits in the banking system, noted Ali Ahmed Al-Kuwari, group CEO of Qatar National Bank.
"I think to replace 3 to 4 percent is not a big deal and let me also remind you there is a two-way relationship. So there's deposits coming from the countries to Qatar and vice versa, Qatar has investments in these economies so it's fair to say for every dollar lost on one side, there's a dollar lost on the other side," he told CNBC.
"Sometimes it's a dollar and a half or two dollars from one side over the other because Qatar is not dependent on these economies, while some countries are dependent on trade flows with Qatar. So it's important to say this: Qatar also has deposits in the region," he said. Other than outflows in deposits, Al-Kuwari said business is pretty much running as usual in the country despite the blockade, with the economy and financial system still strong. He acknowledged that the standstill could continue for some time, but posited that it is a good opportunity for Qatar to press on with strengthening its economy.
Qatar, the world's largest gas exporter, has started diversifying its growth model away from the energy sector and is growing sectors such as education, healthcare and tourism. Qatari banks have also started tapping international markets for funds, turnings to markets in Asia and Europe. Qatar National Bank itself just closed a bond issuance in Taiwan worth $630 million on Wednesday, Al-Kuwari said. "This is an ongoing exercise for us, with or without the crisis, to tap into the markets and help us fund our books," he said.
