...Key Message on 2017: Qatari Islamic banks have less foreign funding and typically higher retail deposits than their conventional peers and are therefore less at risk of deposit flight. Liquidity pressures remain as for all Qatari banks due to the economic sanctions on Qatar and funding costs have risen. Islamic banks made up 23% of sector assets at end-2017. Asset Quality: Qatari Islamic banks typically have better asset-quality metrics than their conventional peers. However deterioration in metrics has been more pronounced. This is due to pressure on the contracting and real-estate sectors, in which Islamic banks are concentrated, and to high single-name concentration. Reserve coverage is also weaker for Islamic banks. The average financing impairment charges to gross financing ratio remains below conventional banks due to specific issues in a small number of conventional banks. Performance: Islamic banks' profitability metrics are mildly weaker than their conventional peers due to lower...
