Effect of Qatar's central bank's new lending regulations is "high", Al Ahli Bank's chief executive said yesterday.
Qatar central bank restrictions take a toll
Qatar's restriction on how much banks can lend is taking its toll, the chief executive of Ahli Bank said yesterday.
The effect of the Qatari central bank's regulations on retail loans is "high", Salah Murad said yesterday, according to Bloomberg News.
Retail loans account for 20 per cent of the bank's total portfolio, Mr Murad added.
The central bank released a circular in April placing a ceiling of 400,000 Qatari rials on personal loans to expatriates, and dropping the loan limit for Qatari nationals to 2 million rials from 2.5m rials.
The circular also capped the interest rate on all personal loans at 6.5 per cent, compared with current rates of up to 10 per cent.
That move followed the central bank's order in February that all commercial banks shut down their Islamic finance operations by the end of the year, which was seen as likely to boost Islamic lenders in the Gulf state.
Mr Murad also said "the bank has received interest from Islamic lenders to buy its Sharia-compliant unit and the bank will take a decision by the end of this year," Bloomberg News reported.
Qatar held interest rates at levels higher than in other Gulf nations as the global financial crisis crimped borrowing in the region. Its inflation rate rose to 1.8 per cent in February after the country experienced deflation for most of last year.
The country forecasts economic growth of 15.7 per cent this year, slowing to 7.1 per cent next year.
Ahli Bank, part of the Ahli United Bank group, was launched in 1983 and specialises in commercial and retail banking. It has 20 local branches.
The bank last week said its profit for the first half rose 28 per cent compared with the same period last year, to 238m rials.
Ahli rose 4.2 per cent to 74 rials yesterday on the Qatar Exchange, although only 150 shares were traded.