This document discusses Qatar's strong and resilient banking sector. It notes that Qatar has the Middle East's most competitive finance sector, with Qatari banks leading the region in annual asset growth. The banking sector has been largely unaffected by global economic downturns due to strong macroeconomic fundamentals. Major Qatari banks like Qatar National Bank are expanding both within the region and internationally, while still focusing on the domestic market. The central bank governor cites initiatives to strengthen financial regulation and protect consumers as reasons for continued stability and growth in Qatar's banking industry.

1. This is an independent publication by Upper Reach
Q
atar’s banking sector is on a roll, with its institu-
tions every day expanding their presence in the
global financial network across the board and
consolidating their business at home.
Indeed,thecountryhastheMiddleEast’smostcompeti-
tivefinancesectoranditsbanksareleadersinannualasset
growth at almost 20 per cent among financial institutions
of the six fabulously wealthy Gulf Cooperation Council
nations, according to the World Economic Forum.
Other indicators are equally bullish: in 2013, the last
year for which solid annual data is available, loan growth
at Qatari banks was up 23 per cent, deposit growth rose
24 per cent and return on equity was 16 per cent, with
higher lending, a low-cost base and low provisioning
requirements supporting overall profitability.
Helping to fuel these trends has been massive govern-
mentoutlayonpublicspendingprogrammesandincreas-
ing private investment, both financed mostly through the
Qatari banking sector, which largely escaped the fallout
from the world’s recent economic woes.
“Qatar’s banking system has been mostly unaffected
by the global financial turmoil,” notes Qatar Central
Bank Governor, Sheikh Abdulla bin Saoud Al-Thani.
“Supported by strong macroeconomic fundamentals and
sound regulation, banks remain resilient with adequate
capital, comfortable liquidity positions, high asset quality
and good profitability.”
One of the country’s most successful financial institu-
tions is Qatar National Bank, which last year celebrated
the 50th anniversary of its founding. Its parent company,
QNB Group, is the largest in Qatar and enjoys a market
share of more than 45 per cent.
“We are also the largest in the Middle East and North
Africaregionbyassets,loans,deposits,profitsandequity,”
boasts QNB Group CEO Ali Al-Kuwari.
But the bank is not resting on its laurels, with plans
to expand further in the region with the strategic goal of
becoming “a Middle East and African icon by 2017.”
“Internationalexpansionofferstheopportunitytocapture
the investment and trade flows, as well as leverage QNB’s
in-depth sector expertise in relevant industries, such as oil
and gas, construction and infrastructure, and its structured
and project finance capabilities,” MrAl-Kuwari explains.
ConcentratingonbusinessclosertohomeisBarwaBank
whoseActing Group CEO, KhalidAl-Subeai, argues that
withinternationalbanksactiveinthecountrypayingmore
attention to their own markets, Qatari banks are picking
up the slack by upgrading staff from top to bottom and
providing clients with more, and better, services.
“Many of the international banks which have tradition-
allyledtheprojectfinancemarketsinthispartoftheworld
are scaling back in the region as they look to restore their
domestic balance sheets,” he says. “This has created an
opportunity for the local banks and one that we have been
keentodevelopbyinvestingheavilyinourowncapability
through bringing in first-class talent and improving our
product offering.”
Balancing both international and domestic operations
is the task ofAbdullaAl-Raisi, the CEO of the pioneering
CommercialBankofQatar,whichisactiveinsuchfar-flung
markets as Myanmar andTurkey, but also is known for its
innovation in customer service.
“In our 40 years of banking we had to meet a lot of
challengesandwhenwethinkofthat,wesaytoourselves.
‘We can’t stop here’,” he says. “So we were the first bank
to provide a national ATM (cash point) system, the first
to provide credit cards and we are the number one digital
bank in Qatar at the moment.”
“Wedon’twanttobeinthebackseat,”MrAl-Raisisays.
“Wealwayswantedtoleadandthatiswhywearesoactive
in bringing our customers new products.”
As various news outlets in the UK have been accused
bykeymediaplayersofproducingacampaignofnegative
stories about Qatar, Upper Reach is eager to shed light on
the inevitability of the country’s role in the international
financial arena.
QATARbanks on innovation
Recognised by the World Eco-
nomic Forum as the MENA re-
gion’s second most competi-
tive economy and leading the
region in terms of asset growth,
it is surprising that Qatar, a soon
to be financial heavyweight, re-
mains widely underappreciated
thursDAY, march 5, 2015
Sheikh Abdulla bin Saoud Al-Thani, Governor of the Qatar Central Bank, says, “Qatar’s
banking system has been mostly unaffected by the global financial turmoil”
PROJECT TEAM:
Sophia Shepodd, Georges Van Damme,
Anthony Serra and Jonathan Bossaer
UPPER REACH
68 King William Street,
London EC4N 7DZ
T. +44 (0) 207 959 2424
ur@upper-reach.com
“GCC economies have been
amongst the best
performing in the world in
recent years. The near-term
outlook is positive, with
growth of about 4.5 per cent”
Christine Lagarde, Managing Director of
the International Monetary Fund
“With the World Cup being
hosted in 2022 [and]
proposals for ambitious
infrastructure developments,
[Qatar] has maintained its
status as one of the globe’s
fastest growing economies”
Alan Yarrow, Lord Mayor of London
Delivering the Legacy Part I
“Despite falling oil prices,
Qatar has the project pipe-
line, the political impetus,
and the financial reserves to
continue project spending as
it prepares to host the FIFA
2022 World Cup”
Ed James, Director of Analysis
at MEED Projects
#Qatar

3. A
convergence of factors is ensuring stability,
growth and, most importantly for oil-dependent
nations, sustainable diversification of the econ-
omy.This will help not only the six GCC countries, but
the rest of the world shake off the effects of crisis and
drive prosperity for all, says Qatar Central Bank (QCB)
Governor, Sheikh Abdulla bin Saoud Al-Thani.
“The steady growth and solid economic and financial
fundamentalsoftheGCCregionwillaidinglobalrecov-
ery with the on-going economic diversification strategy
pursued in the region creating not only opportunities for
domestic private investors but also enhance scope for
foreign investment,” he says.
But it is not only investors who will benefit. Remit-
tances from the hundreds of thousands of foreign work-
ers employed in the Gulf region help other economies,
as does overseas aid and foreign investments by GCC
governments and private individuals.
“Moreover, the GCC region will continue to benefit
the global economy by supplying adequate oil and gas,
therebyhelpingmaintainstabilityintheglobalpetroleum
market,” the Central Bank chief says.
Qatar, as a principal player in all of these areas, is
keeping its economy and banking and financial sectors
healthy through sound steps such as strict regulatory
controls and other measures.
“QCBhaslaunchedinitiativestopromotetheeffective-
ness of the financial sector in developing capital markets
and increasing financial stability with other ministries,”
the governor told a recent economic conference in Doha.
One of those initiatives is a six-point strategic plan
withthegoalsofstrengtheningmarketinfrastructureand
protecting consumers and investors, he explains.
“Our aim is to enhance consumer and investor pro-
tection by developing standards and codes of conduct,
protecting credit information and raising public aware-
ness,” notes Mr Al-Thani.
Thisisgoodnewsforforeigninvestorswhohaveshied
away from the region according to theWorld Investment
Report 2014, which said that foreign direct investment
(FDI) flows to the GCC states maintained a downward
trend from 2009, and persistent tensions in the region
continued to hold off foreign direct investors in 2013.
Nevertheless, the GCC countries, including Qatar, are
making significant strides to facilitate FDI flows into the
region by improving their business environments and
such progress is reflected in the gains made by the Gulf
members in the World Bank’s Doing Business rankings.
“For Qatar, the favourable tax regime coupled with
strong macroeconomic fundamentals and robust growth
outlook supported by growing non-hydrocarbon sectors
and large infrastructure investments have aroused much
interest from international investors,” MrAl-Thani says.
Other developments have also encouraged investors,
such as the upgrading of the Qatar Stock Exchange by
leading rating agencies to emerging market status, and a
new law increasing foreign investor ownership in listed
Qatari companies to 49 per cent.
More recently, the establishment of Qatar as the first
renminbiclearingandsettlementcentreintheregionand
the two-way line of currency swap agreement between
the QCB and the People’s Bank of China are expected
to facilitate trade and investment.
Also, the QCB’s financial regulatory agenda is now
conforming to stricter international standards. “Since
January 2014, all banks in Qatar are mandated to ac-
complish new capital requirements based on Basel III
standards,andguidelinesonliquiditycoverageratiosand
liquidity risk monitoring tools have also been in effect,”
the governor emphasises.
TheQCBisalsoworkingwithotherregulatoryauthori-
ties to ensure that financial services firms put in place
processes that help them better understand customers’
needs,aswellasadequatesystemstoresolvedisputescon-
structively and in a timely manner. Future endeavours in
thisregardincludetheintroductionofadepositinsurance
mechanismtoenhanceconsumerandinvestorprotection.
“This is a crucial element of a financial safety net that
promotes financial stability. Consumers and investors
will also be protected from unauthorised and unlicensed
financial service providers through strict enforcement
of the law. Confidentiality of customer information also
needs to be maintained and the rules of information
sharing will be clearly spelt out,” MrAl-Thani promises.
Moneylaundering,terrorismfundingandcybercrime
Because of its geographic location and extensive role
in world political, financial and economic affairs, Qatar
mustalsokeepaneyeoutforinternationalmalfeasance,
whether it’s common cross-border crime, sophisti-
cated and cyber-based criminal activity such as money
laundering, or support for regional terrorism. And this
especially applies to the financial sector, which can
be used by those involved in all these evils to channel
their funds and mask the sources.
Qatar has taken the lead in fighting these scourges,
not only at home but also throughout the regional and
globally, calling for close collaboration in tackling
organised crime in all of its manifestations: money
laundering, terrorism, narcotics, smuggling of goods
and people and cyber crime.
Those engaging in these activities face stiff prison
sentences and fines. But the law goes further, requir-
ing all financial institutions operating in the emirate
to report all suspicious transactions to the QCB and
to maintain and store records of the transactions for
up to 15 years.
In 2004, the Qatari Financial Intelligence Unit was
created to review all financial transaction reports,
identify suspicious activity and guarantee that all
government ministries and agencies have oversight of
financial transactions. Aiding this ambitious endeav-
our is a rulebook that calls for all bank employees to
be trained so they can understand the vulnerabilities
of their bank’s products and services and spot suspi-
cious transactions.
In response to growing concern about the rise in ter-
rorism, five years ago the Qatar Financial Regulatory
Authority issued a series of rules to combat terrorism
funding. In addition, Qatari officials point out that the
country carefully regulates and scrutinises foreign
charities which receive contributions from local insti-
tutions and that the public prosecutor has the power to
freeze the funds of terrorist organisations designated by
the UN Security Council and the names of those entities
are distributed to all financial institutions.
Qatar also became a member of the FinancialAction
Task Force (FATF), which is an international organisa-
tion that sets standards to promote the implementa-
tion of legal, regulatory and operational measures for
combating money laundering, terrorist financing and
other related threats to the integrity of the international
financial system. Its members include major financial
centres including, the UK, Germany and the USA.
“Through these efforts, Qatar will be better able
to identify individuals who may be trying to channel
funds to terrorist groups,” says Prime Minister Sheikh
Abdullah bin Nasser Al Thani.
This action exemplifies Qatar’s commitment to
working hand in hand with universal allies to tackle
the spread of illegal financial activity and the fight
against terror.
A
strong and resilient financial system is the
foundation of every economy that delivers
sustainable growth and promotes a suc-
cessful drive for increased economic diversifica-
tion. It is the essential mechanism that delivers
the financing that companies and consumers
require, allocates capital to entrepreneurs, and
drives innovation. The critical role that the finan-
cial system plays was underscored by the global
financial crisis, which reminded us again of the
significant negative effects that flow to the general
economy from crisis in the financial system. A
disruption in the financial system affects not just
future growth prospects for an economy but also
erodes the existing wealth of companies, inves-
tors and consumers.
For orderly and sustainable economic growth,
the financial system must function effectively and
financial regulation plays a crucial role in making
sure that is the case. Qatar has been a global
leader in growth over the last decade and, while
the global financial crisis had only a minor impact,
Qatar has remained focused on the necessary ele-
ments to ensure that the financial services sector
continues to serve the economy well. To this end,
Qatar is committed to maintaining a regulatory
environment that secures and supports the vital
role of financial services in the economy.
Meeting the challenges of exceptional growth
demands vision and focus, and that has been a
particular strength for Qatar’s financial regulators.
The Qatar Central Bank (“QCB”), the Qatar Finan-
cial Markets Authority and the QFC Regulatory
Authority were brought together in 2013 under
the new QCB Law and that connectivity among
the regulators led to the publication of the unified
strategy for financial section regulation that same
year. Underpinning the strategy is a commitment
shared among the three regulatory authorities
to advance a regulatory framework that will be
an international benchmark and a platform to
ensure that Qatar’s financial services sector
contributes significantly to realising Qatar’s full
growth potential.
The strategy focuses on important shared
goals among the regulatory authorities and
it is supported by specific objectives in the
lead up to 2016.These goals focus on ensur-
ing that the supervision of financial services
firms is effective, efficient and in line with
best international practice; the development
of a macro-prudential approach to regula-
tion to support firm-based supervision; the
broadening and deepening of the financial
services infrastructure to meet future growth
opportunities; delivering consumer and inves-
tor protection that promotes confidence in
Qatar’s financial system; and capacity building
both within the regulatory authorities and, more
broadly, within the financial services sector in
order to position the financial services sector
to meet the goals of the 2030 National Vision.
Importantly, the new QCB law and the unified
strategy have also created a significant level
of co-operation among the three regulatory
authorities and a platform for greater consist-
ency in regulatory policy.
The last two years have seen significant suc-
cesses delivered under the unified strategy and,
with that, the establishment of a robust platform
that will move Qatar forward in its ambition under
the 2030 National Vision.
Tight regulation ensures stability
With such huge potential yet to be
tapped in the financial industry
and regional security issues put-
ting Qatar under scrutiny, regula-
tory action is essential and Qatar’s
Central Bank is setting a solid stan-
dard for the sector to follow
“Our goal is to enhance
consumer and investor
protection by developing
standards and codes of
conduct, protecting credit
information and raising
public awareness”
Sheikh Abdulla bin Saoud Al-Thani,
Governor of Qatar Central Bank
Michael Ryan, CEO of the Qatar Financial
Centre Regulatory Authority (QFCRA)
Strong financial foundations drive innovation by Michael Ryan, CEO of the QFCRA
Michael Ryan brings to the QFC Regulatory Authority his rich expertise, having served in a number of senior management positions at Bank of America Merrill Lynch and Credit Suisse Financial Products,
as well as serving on the Irish Prime Minister’s advisory committee on financial services. Here, he offers his insight on how Qatar’s well-regulated financial sector has helped buoy the economy
This is an independent publication by Upper Reach
03

4. This is an independent publication by Upper Reach
W
ith a total private wealth pool of $3 trillion,
the Gulf has become an increasingly popular
destination for asset management companies
and investment banks. Dubai has served as the Gulf Co-
operation Council’s financial hub for many years, but it
now faces competition from other Gulf cities such as the
Qatari capital of Doha to attract financial services firms
and asset managers.
Oil and gas-generated riches have helped Qatar to
have the highest GDP-per-capita income in the world.
Amongst the population of 2.1 million, more than 80%
of which are expatriate workers, there are estimated to
be 300 “ultra-high-net worth” individuals worth at least
$30 million, including 12 billionaires. The tiny emirate
has the third highest concentration of millionaires in the
world after Singapore and Switzerland; nearly 50,000
households hold private wealth of at least $1 million.
AttractedbyQatar’swealth,aregulatoryenvironment
onparwiththeUK,anattractivetaxregimeandarelative-
lyunsaturatedmarket,portfoliomanagersareturningtheir
backs on Dubai in favour of the Qatar Financial Centre
(QFC) in Doha. Global index compiler MSCI upgraded
QatartoemergingmarketstatusinMay2014;andCEOof
the QFC, ShashankSrivastava has said that “Qataris one
of the very few countries that can offer emerging-market
returns at developed-market risk levels.”
In2012,Barclaysbecamethefirstinternationalbankto
haveasizablefundmanagementoperationintheemirate
afteritsignedanagreementwiththeQatarAssetManage-
ment Company to co-invest $250 million in the portfolio
of Barclays Natural Resource Investments.
Now Barclays is one of a number of UK financial ser-
vicesfirmstohavearegionalHQinDoha.Amongstthem
isAES,anassetmanagementcompanywhichspecialises
in serving Qatar’s wealthy foreign workers. With such a
high density of expats looking for guidance on investing
some of their enormous tax free salaries, the draw of
Doha for companies such as AES is too big to ignore.
“Qatarhaspotentialbecauseoftheamountofexpatriate
andcontractedwealththatisaccumulatedhere.Youhave
got a population in excess of 2.1 million, of which the
local population is somewhere in the region of 300,000.
That gives huge opportunity of capturing investment
wealthfromalltheotherpartiesthatarehere,”saysRupert
Bastick, General Manager of AES International Qatar.
“Given that we practice proper financial services with
UKexportedbestpractice,wethoughtthatthiswasavery
good and viable opportunity,” he adds. “So therefore the
amountofpotentialclientsthatwouldbeavailablewasthe
biggestfactorforus.Itwasagoodbusinessopportunity.”
While British companies such as AES serve wealthy
expatsinQatarlookingforaninvestmentcompanyadher-
ing to high UK standards, local bank QInvest, in which
theQatariInvestmentBankisthelargestshareholder,has
helped rich Qataris to make billions of dollars of Sharia-
compliant investments in Europe and the US.
From Harrods to The Shard, Qatari investment in
London is well documented. QInvest was part of the
consortium of Qatari banks that developed The Shard,
but it has since sold its stake in Europe’s second tall-
est building. The bank’s other high-profile European
purchases include several industrial property and hotel
assets in Paris.
In2013,QInvestannouncedthatitwouldberefocusing
its attention from an oversaturated European market to
the US, while at the same time, streamlining its business
intothreedivisions:investmentbanking,principalinvest-
ments and asset management. Since then the bank has
bought a number of properties in Manhattan, including
a retail podium in the Golden Triangle of the upmarket
New York borough.
The European Central Bank’s quantitative easing pro-
gramme – together with a weak euro and low oil prices
– has however compelled QInvest to focus attention in
Europeonceagain.InJanuaryitannouncedapartnership
withPioneerInvestments,amanagementfirmwithmore
than $246 billion in assets, to create a Sharia-compliant
fund that will be used to invest in European blue-chip,
mid and large-cap stocks.
Another local asset management firm that has earned
the respect of investors and industry peers both in Qatar
and the region is Amwal. Wholly owned by Sheikha
HanadibintNasserAlThani,oneofQatar’smostsuccess-
ful businesswomen, Amwal was Qatar’s first regulated
investment company. In November, it was named “Best
AssetManager”inQatarbyEMEAFinanceforthefourth
consecutiveyear,andaccordingtotheCEO,itistheonly
assetmanagerinQatarwhosefund,theQatarGateFund,
has outperformed the Qatar Exchange Price Index every
calendar year since 2006.
Qatari wealth, as well as investment in large-scale
infrastructure projects in the buildup to the 2022 FIFA
World Cup, will continue to be a big draw for both local
andforeignfinancialservicesfirms.Whilerenownedasset
managers such as AES thrive off the market of wealthy
expats, local companies such asAmwal and QInvest will
continuetoshapefutureinvestmentsintheQatar,Europe,
America and beyond.
04
The World Islamic Banking Competitiveness Re-
port 2014-15 estimates that total assets pooled
between commercial banks in the QISMUT (Qa-
tar, Indonesia, Saudi Arabia, Malaysia, UAE and
Turkey) nations will reach $1.8 trillion by 2019.
Between 2009 and 2013 global assets in the
Islamic banking industry experienced a com-
pounded annual growth rate of 17 per cent, and
growth projections within QISMAT for the period
2013-2018 stand at 19.7 per cent.
Clearly, Islamic banking is big business. The
powerhouse of the industry is Kuala Lumpur but
Qatar’s close links with the UK represent a major
market for Qatari financial institutions to tap into
a Muslim population that currently stands at just
under 3 million – and is expected to rise to 4.23
million by 2020, according to the Pew Research
Center. In Europe the Muslim share of the popula-
tion is expected to grow by nearly one-third over
the next 20 years, the same report states.
“Saudi Arabia, where the majority of retail and
corporate assets are now sharia-compliant, and
Malaysia, which has also introduced meaning-
ful legislation, are key driving markets in terms
of size,” says Group CEO of Qatar Islamic Bank
(QIB), Bassel Gamal.
“Within this context, the Qatari Islamic banks
will have an increased role in the future as they
expand their international operations, trade fi-
nance and cross-border activities.”
QIB already has a presence in Malaysia through
Asia Finance Bank. It is also present in Saudi Ara-
bia and the developing market of Turkey through
its investment banking subsidiary, QInvest. “Our
wholly owned subsidiary QIB UK is also ready to
support the plans of the UK government in further
promoting sharia banking,” adds Mr Gamal.
With a growing number of Qatari investors
making millions of pounds-worth of investments
in the UK, particularly in property in London, it
is important to have sharia-compliant banking
institutions for these Islamic investors on the
ground. This is what compelled QIB to establish
its subsidiary in Britain, QIB UK, which was fully
authorised as an Islamic Bank by the UK Finan-
cial Services Authority in 2008 and is an integral
to QIB’s vision to become the leading Islamic
financial institution.
In a bid to make Britain a global hub of the
Islamic finance industry, the UK in June 2014
became the first country outside of the Islamic
world to issue Sukuk bonds, of which QIB was
one of the holders. The £200 million issue was
11.5 times oversubscribed.
Another sharia-compliant player, Barwa Bank
was the only Qatari bank to contribute to that
order book. In fact out of the £2 billion that the
order book ran close to, Barwa Bank managed to
generate nearly a billion.
“We anticipate more Governments and Corpo-
Doha poised to develop Islamic
Many Islamic financial institutions like Qatar
Islamic Bank have caught up to their Western
counterpartsintermsofefficiencyandtechnology
and are targetting new clients abroad. Also, given
Doha’s expertise in the sector and its close ties
with the UK, Qatari banks are well positioned to
tap into British markets
GCC wealth
attracts a wave of
asset managers
Qatar’s hydrocarbon-generated wealth, regulatory environment and
relatively unsaturated market, has portfolio managers turning their
backs on Dubai in favour of Doha, while local asset management
firms continue to invest billions in Europe, the US and beyond
“Qatar is one of the very few countries that can offer emerging-market returns at developed-
market risk levels,” says CEO of the Qatar Financial Centre, Shashank Srivastava
“We expect Qatar to remain
within the top five countries
globally in terms of Sharia
banking assets and to contin-
ue playing a key role in the
development of the industry”
Bassel Gamal,
Group CEO of Qatar Islamic Bank

5. This is an independent publication by Upper Reach
05
Insurance industry to enjoy
CAGR of 6.7% through 2017
Q
atar’s successful diversification from a purely
energy-based economy over the past couple
of decades has been one based on teamwork.
While the Qatar Investment Authority has been active
in drumming up business outside of the hydrocarbons
market, Qatar’s insurance sector, which is one of the
fastest-growing in the world, has had its hands full
meeting the needs of international companies, domestic
firms and individuals engaged in an ever-increasing
array of sectors.
Perhaps in no field has Qatar achieved so much in so
little time than sport. Doha plays host to annual events
includingATPandWTAtennistournaments,aEuropean
Tour golf championship, a Diamond League athletics
meet and the Tour of Qatar cycling race.
The emirate recently hosted the IHF Handball World
Championship and over the next few years will stage
the IPC Athletics World Championships, the IAAF
WorldChampionshipsandtheUCIRoadCyclingWorld
Championships. But the main event is the 2022 World
Cup, which has led to massive influxes of investment
and,inturn,hugeopportunitiesforthenation’sinvestors.
“Qatarisinvestingbillionsofdollarsininfrastructural
development in the run-up to the World Cup and Qatar
Insurance Company (QIC) will play a leading and posi-
tive part in ensuring that this level of investment is suit-
ably and securely insured,” says Khalifa Abdulla Turki
Al-Subaey, the company’s Group President and CEO.
Foundedin 1964, QIC is Qatar’s leading insurer, with
a market share in excess of 50 per cent, an asset base of
over 6 billion Riyals and the highest Standard & Poor’s
rating for an insurance company in the GCC.
Overall, Qatar’s insurance industry has a forecast
compound annual growth rate of 6.7 per cent through
2017,andwithsome$200billionworthofinfrastructure
and construction projects in the pipeline leading up to
theWorldCup,coverinthenon-lifepremiumsegmentis
likely to exceed its current rate of 70 per cent of overall
policies. Increases in construction and engineering pro-
jectshaveseenQatar’sworkforceexpandexponentially,
requiring insurers to fill the gaps in the market created
by liability and compensation issues.
“When a country develops, risks become more di-
verse,” notes Mr Al-Subaey. “We have been committed
to Qatar’s growth from the very beginning, crafting in-
novative insurance solutions in response to the growing
energy, marine and aviation sectors, as well as tailoring
insurance solutions for the well-being and safety of all
the people of Qatar, nationals and expatriates alike.”
In2013anEmiridecreeestablishedmandatoryhealth
insurance provision for employees of companies oper-
ating in Qatar. The first phase of the scheme went into
effect in July of that year with full adherence expected
to be achieved in 2015. Furthermore, third-party vehicle
insurance is also compulsory. Many companies in Qatar
alsooffershared-responsibilityTakafulpackagestocater
for the life and health insurance segments.
Ali Ibrahim Al-Abdulghani, CEO of Qatar Islamic
InsuranceCompany,hashisfingeronthemarket’spulse.
“Webelievethatthelifeinsurancesectorislargelyunder-
developedinQatarandhenceholdstremendouspotential
for growth,” he says. “Another area is online services
and mobile apps. Until now most of the services were
being offered in a traditional way but customers are now
becoming accustomed to services being offered online
and on mobile devices from various service providers
belonging to varied segments of the economy.”
With the EU set to apply the Solvency II Directive to
the inter-community insurance market in 2016, many
GCC countries including Qatar are working to bring
the same concepts of risk management and consumer
protection to the regional sphere. Qatar Financial Centre
Regulatory Authority (QFCRA) has created the ‘Own
RiskandSolvencyAssessment’(ORSA)programme,by
which regulated companies must carry out evaluations
similartotheEU’sfinancialindustrystresstestsfromthe
beginningof2015.TheORSAsystemisunderpinnedby
thesamecriteriaasinotherglobalmarketsandmeetsthe
disclosure requirements of the InternationalAssociation
of Insurance Supervisors.
Withsomanyinfrastructure,energyandlogisticspro-
jectsunderwaythereishugepotentialforlocaloperators
offeringreinsuranceservices,particularlyasQatarretains
a reliance on international reinsurers. Ghazi Abu Nahl,
GroupCEOoftheQatarGeneralInsuranceandReinsur-
ance Company, one of Qatar’s largest national insurers
with subsidiaries worldwide and a diverse personal and
corporate policy base, believes the segment is ripe for
growth, given the right conditions.
“Reinsuranceisadifferentballgamethaninsurance–
it is very specialised in margin and more sophisticated,”
hesays.“Ininsurance,weapplybestpracticesandweare
proud of the corporate levels and the techniques that we
employduringouroperations.Ibelievereinsurancealso
needs that. I hope that the regulators will look at reinsur-
ance as a special case and encourage more insurance in
the area, making it a priority.”
finance in the UK
rates to follow the UK’s initiative; we are in talks
with a number of governments looking at the
international sukuk market, which we feel is an
under-developed source of capital,” says Barwa
Bank Group CEO, Khalid Al-Subeai.
On the UK’s Islamic finance industry, Mr Gamal
states that, “It’s a growing market. Being a leading
Islamic bank, I would say, it’s not a big presence
in the UK but still we have a presence. We have a
fully-fledged bank and we also have an investment
in QInvest, which is very active in Sukuk issuance.
I think out of the Sukuks that were issued last
year, we had 20% market share with QInvest. It’s
going to play a more important role in the future
and I believe this market is going to expand quite
rapidly; and the growth there is quite interesting.”
But while demand grows at the institutional
level in line with Qatar’s infrastructure financing
needs, encouraging individual customers has
proven more elusive, especially in the UK where
second and third-generation Muslim Britons
are more attuned to the traditional institutions,
particularly given the advances in online banking.
This, Mr Gamal notes, is an area where Islamic
banks have some work to do and QIB is at the
forefront of altering outdated perceptions about
the industry.
“People have often viewed Islamic banks as
inefficient and overpriced; I even hear this from
clients,” says the CEO. “We need to change that
viewpoint. For a very long time Islamic banking
was all about ideology rather than efficiency,
but we are not different from conventional
banks except in the structure of how we do
things; we are taking the same risks, and we’re
expecting the same rewards. We’re diversify-
ing our products and investing in technology;
the client that was satisfied with very basic
products in the past is much more sophisti-
cated now.”
Part of that process, Mr Gamal stresses, is
linking Islamic financial products to the growing
UK market, in conjunction with the goals of both
governments to capitalise on the opportuni-
ties the sector presents, taking advantage of
London’s standing on the world financial stage
and Qatar’s expertise to create a viable bridge
between Europe and the huge Islamic banking
sector in South East Asia.
It may come as a surprise to know that
Islamic financial institutions are also gaining
popularity internationally with the wider non-
Muslim community, as more and more people
discover the socially-friendly methods of Is-
lamic entities that make business sense. For
example, the profit and loss sharing concept
can provide a wide range of benefits. The most
basic can be easily understood through Takaful
insurance, where customers very often receive
a cheque at the end of the year if not too many
claims have been made.
Strategically located geographically between
the UK and Malaysia and with a solid Islamic
finance and insurance market and capability,
Qatar could be a vital component in London’s
potential as an Islamic finance centre, and
this bridge role is one that the key players will
certainly not allow to go unexplored.
Major infrastructure projects cou-
pledwithrecentlyintroducedman-
datory schemes have given the
insurance sector a needed boost
“We are in talks with a num-
ber of governments looking
at the international sukuk
market, which we feel is an
under-developed source of
capital”
Khalid Al-Subeai,
Group CEO of Barwa Bank
“Reinsurance is a different
ball game than insurance –
it is very specialised in mar-
gin and more sophisticated”
Ghazi Abu Nahl, Group CEO of the Qatar
General Insurance and Reinsurance Company

6. This is an independent publication by Upper Reach
06
UK-Qatar ties at their strongest in finance
S
peaking at a conference in London in July 2014,
Director of Trade and Investment at the British
Embassy Doha, Gareth O’Brien, summed up
Qatar’s importance to bilateral financial cooperation
in a few simple words: “Qatar matters more and more
to the UK.”
Bilateraltradeandinvestmentbetweenthetwonations
stands at some £5 billion per year and the Qatar Invest-
ment Authority (QIA) has become heavily involved in
theUK’sNationalInfrastructurePlan.Thisisparticularly
evident in the Canary Wharf financial centre, which
the QIA made a successful offer to buy in tandem with
Brookfield Properties in January for £2.6 billion, adding
to the sovereign wealth fund’s impressive portfolio of
interests that include The Shard, Harrods and Heathrow
Airport. Overall, the Qatar government has pumped £30
billion into the UK and a further £10 billion has been
earmarked for UK infrastructure projects.
WhenaskedwhyQatarhassostronglytargetedBritain,
AdelMustafawi,GroupCEOofMasrafAlRayanBank–
theUK’slargestIslamicfinanceinstitutionwithbranches
in London, Birmingham, Manchester and Leicester – un-
derscoresthatasaglobalinvestor“Qatarseeksinvestment
opportunities in different markets and sectors. We cannot
ignore the fact that London is the second largest financial
market globally after NewYork.The legal and regulatory
environment in the UK is very sound.”
CEO of Qatar Islamic Insurance Company agrees,
saying: “The UK is the financial hub of Europe that has
traditionallyofferedacomparativelylessvolatileoperat-
ingenvironmentwithpromisingopportunitiesforforeign
investors. Same goes for Qatar being stable in a highly
unstable region; so many opportunities for rapid growth
attractmanyUKcompaniestoQatar.Weconsiderthisas
a winning partnership for both the countries.”
Indeed, Qatar is UK’s third largest export market in
the Middle East and North Africa region at £2 billion
annually.Withthe2022WorldCuponthehorizon,trade
links between the two countries are set to increase even
more as the home of football joins forces with the first
Middle Eastern nation to be selected to put on the great-
est sporting event in the world. As Mr O’Brien noted,
“six new stadiums and 70 training grounds are under
construction.” According to MEED Projects, Qatar’s
active projects market has been estimated at USD 285
billion. Little wonder that UKTrade and Investment has
given Qatar pride of place on its High Value Opportuni-
ties Programme.
Opportunities also exists in rail and roads infrastruc-
ture, and a delegation from Qatar Rail visited the UK
in the autumn to explore potential cooperation in the
planned construction of a rail network linking Qatar to
the rest the GCC – a project worth $35 billion to inves-
tors – and the creation of the Doha Metro system which
is already underway. On the other side of the coin, the
QIA has backed infrastructure development in the UK
ranging from energy plants and rail links to the Thames
sewer project.
Meanwhile,theBritishexpatriatepopulationinQatar
has grown from around 1,500 people in 1995 to over
20,000todayonthebackofanincreasingpresenceofUK
companiesandaninfluxoftechnicalexpertstocooperate
onthevastinfrastructureundertakingQatarhasembarked
on. As Abdulla Al Raisi, CEO of Commercial Bank of
Qatar, notes: “It’s a historical thing. We were colonised
by the British and we did enjoy a good relationship; we
as companies believe that the British brought a different
civilisation and mixed it in with us in a harmonic way
and we were not so much resistant or defensive, rather
we have accepted it. But we maintain our identity, that
is very important, and we have learned a lot from them
in terms of developments in oil and gas and education.
TheUKhasplayedaveryimportantroleintheeducation
sector in our country and people have the opportunity to
be trained abroad in England.”
“Qatar has started investing,” he continues, “because
it is part of our project to expand our economy and in-
vestments and share views and ideas. A lot of students
are going there and are benefiting from the quality of
the education and the experience. They have had a very
long history in development and now we are actually
importing this technology and other aspects.”
The relationship is further illustrated through the
establishment of Qatari banks in Britain’s capital. QNB
has been present in London since 1976 (its first footprint
in Europe), and recently the bank formerly known as
Islamic Bank of Britain re-branded under the auspices
of MasrafAl Rayan to becomeAl Rayan Bank, offering
shariah compliant products and services. And it works
both ways; HSBC has been in Doha since 1954 and
continuestoconnectQatartoitsglobalfinancialnetwork.
MasrahAl Rayan’s Mr Mustafawi echoes these senti-
ments. “The Qatari market offers many investment and
partnership opportunities for UK investors. With the
multi-billion dollar infrastructure investments planned
over the coming decades, different sectors that directly
or indirectly feed into these projects will be the largest
beneficiaries.Withtheexpansionanddevelopmentofthe
port and economic zones, we expect significant invest-
ments in trade and industrial/manufacturing projects in
Qatar. In addition, the utilities, healthcare and education
sectors offer excellent opportunities as the population in
the country grows and the government allocates more
resources towards these sectors.”
London and Doha not only share
the title of major global financial
centres, but also significant two-
way trade and investment links
that seem to only grow stronger
with time
“The Qatari market offers
many investment and part-
nership opportunities for
UK investors”
Adel Mustafawi,
Group CEO of Masraf Al Rayan Bank
In October
2014, His
Highness the
Emir Sheikh
Tamim bin
Hamad Al-
Thani made
his first
official visit
to the UK,
since taking
the throne in
2013

7. This is an independent publication by Upper Reach
07
I
t’s a new day in Qatar.After decades of relying on its
energy resources to fund the ambitious development
plans which have turned the tiny nation state into a
world showcase in so many fields, the country’s leaders
areworkinghardtoweantheeconomyoffitsdependency
on oil and gas and striving to boost the non-hydrocarbon
sector for the benefit of future generations.
Theeffortsappeartobeworking.Accordingtofigures
fromtheMinistryofDevelopmentPlanningandStatistics,
non-hydrocarboneconomicactivitiesgrewbymorethan
11percentinarecentquarter,whiletheoilandgassector
dropped by more than 2 per cent.
And as the non-hydrocarbon sector accelerates at
doubledigits,itwillhelpfuelthecountry’stotaleconomic
growth from 6.8 per cent this year to an expected 7.8 per
centin2016,evenastheenergysectorgrowthslows,says
a report by the Qatar National Bank.
Sowhatindustrieswillbenefitmost?
Construction and manufacturing, both
of which are already on a roll with the
former benefitting from the billions of
dollars being spent on Qatar’s hosting
of the World Cup 2022, and the latter
sector being driven by a government
plan to ramp up investments in such
activities as petrochemicals.
At the same time, the service indus-
try, such as tourism and hospitality,
is growing and private sector credit
is on the upswing as companies both
large and small involved in this sector,
along with construction and real estate
enterprises, turn to banks for funding.
Financial institutions like Qatar De-
velopment Bank, Commercial Bank of Qatar and Qatar
National Bank are at the forefront of these initiatives,
withQatarDevelopmentBank(QDB)particularlyactive
in assisting small and medium enterprises, or SMEs, in
taking care of business.
“Supporting SMEs is at the heart of our development,
our economy and our ecosystem in general,” explains
QDBCEO,AbdulazizBinNasserAl-Khalifa.“QDBand
the whole entrepreneurship and private sector ecosystem
are putting the pieces together to ensure a vibrant and
sustainable economy that is well balanced.”
QDB offers the Qatari small and medium-sized busi-
nesses a one-stop-shop for products and services – and
not just financing, but also business education, training
and guidance in the skills and resources entrepreneurs
need to successfully compete in the local and interna-
tional markets.
These include business development advice to help
owners create their own feasibility studies, conduct
market research and select appropriate technology.Also
on offer is business counselling for start-ups and existing
firms,toolsforenhancingentrepreneurialskills,andcon-
tacts with financial and non-financial support agencies.
“In2014,wedoubleddownonourcommitmenttoen-
hanceopportunitiesforQatariSMEsandentrepreneurs,”
the CEO says. “A total of 262 SMEs benefitted from
QDB advisory services, with 200 individual counselling
services held, and we launched more landmark strategic
initiatives, conducted more market studies and hosted
moreworkshopsandtrainingsessionsforQatariindustries
than we ever did in previous years.”
Also last year, the bank launched the Qatar Business
Incubation Centre, a 20,000-square-metre mixed-use
business incubator, which is the largest in the Middle
East and North Africa.
One specific sector in which the bank has been par-
ticularly active is tourism, working to identify the gaps
in the industry and helping private operators to fill those
gaps with achievable business opportunities.
“Tourism is a strategically important component of
developinganon-hydrocarboneconomy,”MrAl-Khalifa
notes. “In December, the QDB and the Qatar Tourism
Authoritysignedfouragreementswhichenabledthestart
up of four new projects in the emerging sector – a major
milestone and one of many important local business pro-
motion initiatives across the public and private sectors.”
Each year, an increasing number of visitors from
around the Middle East and further afield come to enjoy
Qatar’sdelights,fromitsastoundingdesertsandcoast,to
theworld-classmuseums,shoppingandotherattractions.
Andthosenumberswillswellastronomicallywhenthe
country stages the premier global sporting event in 2022,
the World Cup football championship, with local banks
as the vital ingredient in preparing for the extravaganza.
Qatar’s government has earmarked around $140 bil-
lionoverthenextseveralyearsforinfrastructureprojects
linked to the World Cup, and further projects to be com-
pleted before 2020 include a new railway-metro at a cost
of$44billion,newhighways,roadsandanewairportfor
$28 billion and an $11 billion new port.
Even though these projects and others will be paid for
outofthegovernmentbudget,another$160billionistobe
funded in the market, fuelling increased domestic credit
activity by private sector companies, which will turn to
local banks like Qatar National Bank (QNB).
“QNB Group has always played a pivotal role in
supporting the economic development of Qatar and its
nationalstrategicprojects,”explainsCEOAliAl-Kuwari.
“This commitment to invest in Qatar’s future continues
today with significant financing support deployed on
major projects.”
Implementationoflargeconstructionandinfrastructure
projects, complemented with higher population growth,
have boosted the aggregate demand, further stimulating
buoyant economic activities across
all sectors.
“QNB group has developed in-
depth expertise in financing this type
ofactivityandwillcontinuetofinance
high-profile projects,” the CEO adds.
Mr Al-Kuwari points out that the
QataricapitalofDohahasundoubtedly
becomethesportscapitaloftheMiddle
East through hosting major interna-
tional athletic events and encouraging
sport among its own citizens.
“SportisoneofthecatalystsforQa-
tartopromoteitselfanditsgrowingca-
pabilities to an increasingly interested
and diverse global audience,” he says.
“Through an effective combination of
focused economic development and
appealing tourism destination, Qatar
has been able to reach out and offer
a compelling proposition to sporting
organisations around the world.”
Echoingthosecommentsisanother
banker, Commercial Bank of Qatar
CEO Abdulla Al-Raisi, who sees his
institution’s support for sport as an
investmentinbothbusinessandsocial
responsibility of which it has long
experience.
“We have backed a number of edu-
cational events and supported special
facilitiesforcertainsegmentsofQatari
students,” he says. “And in health we
have donated a lot of money to bring
the latest medical equipment here for
Qatari patients.”
In sport, MrAl-Raisi says the country’s leaders want
to create an identity for Qatar to be known around the
world as a sporting hub through its first-class facilities,
sport clubs and golf courses, all of which have played
host to such events as theAsian Games and other major
tournaments.
“Why do you think Qatar is investing in all of this?
Yes, Qataris have to get more involved in sport so we
can qualify to lead internationally in some sports. But
also to tell the world who we are,” he says. “Also, the
WorldCupisanopportunityforinternationalinvestorsto
come and put their money into infrastructure projects as
well as for us to get to know these investors and provide
them with the services they need.”
Local banks are the bedrock of World Cup
financing and private sector growth
The economy is confidently diversifying away from oil and gas, and Qatari banks are providing the extra impetus required
“In 2014, we doubled
down on our commitment
to enhance opportunities
for Qatari SMEs and
entrepreneurs”
Abdulaziz Bin Nasser Al-Khalifa,
CEO of Qatar Development Bank
“The World Cup is
an opportunity for
international investors to
come and put their money
into infrastructure projects”
Abdulla Al-Raisi,
CEO of Commercial Bank
“Qatar has been
able to reach
out and offer
a compelling
proposition
to sporting
organisations
around the world”
Ali Al-Kuwari,
CEO of Qatar National Bank
Five stadiums are currently under construction, with a further four new ones planned
Coming up in Delivering the Legacy Part 2
l
Qatar positions itself as a global sporting
destination
A chronicle of Qatar’s sport diplomacy reveals
how Vision 2030 identifies sport as a vehicle for
development, economic diversification and as a
strategic tool to solidify its national identity.
l
Qatar implements change through a labour
system reform
A complete study of the challenges involved
in labour system reform, being addressed
to ensure international standards of worker
welfare.
l
FIFA World Cup 2022 spurs entrepreneurship
Upper Reach analyses the spillover effect of
hosting the World Cup and how the region stands
to benefit as SMEs develop at a fast pace and
the Qatari youth position themselves as the self-
sustaining leaders of tomorrow.
l
World Cup 2022 – The plan
An insider look at the stadiums, infrastructure and
technology in the works to create the world’s first
ever-compact World Cup and a review of the fact
and fiction behind the controversy as it prepares to
be the most unique tournament of all time.
Coming up in Delivering the Legacy Part 3
l
Investment opportunities in Qatar increase due
to sizeable development plans
As Qatar is set to develop Vision 2030’s mega
projects, Upper Reach looks at investment
opportunities across the board and invites
you to be take part in this journey to economic
maturity.
l
Capital market activity stimulated as it sees two
major country upgrades
Foreign ownership hike to 49 per cent, twinned
with the Morgan Stanley Country Index upgrade to
Emerging Market status, prompts Upper Reach to
look closely at the movers and shakers listed on
the QSE as well as Stocks to Watch for 2015/2016.
l
Qatar Is invested in you
With £30 billion earmarked for investment in
Britain by Qatar, Upper Reach reveals the top Qatari
investments contributing to the revitalisation of
Europe’s major cities.
A snapshot of what’s to come...