Qatar banking resilience will remain strong in 2026, supported by capital strength and LNG-driven economic growth. Moreover, rating analysts expect banks to maintain stability despite softer margins and slower lending growth.
According to a new assessment, Qatar’s banks continue to show solid capital buffers and adequate liquidity levels. Therefore, the sector remains well positioned to manage interest rate cuts and new tax pressures.
In addition, analysts expect profit margins to narrow modestly during 2026. However, banks continue to benefit from disciplined risk management and strong balance sheets.
Meanwhile, the expansion of liquefied natural gas production provides an important growth driver. As a result, LNG output growth supports national income, fiscal balances, and current account surpluses.
Specifically, the North Field Expansion project will raise LNG production by about 32 percent by 2027. Consequently, real GDP growth could average 5 percent between 2026 and 2028.
Previously, economic growth averaged 2.7 percent during 2024 and 2025. Therefore, higher energy output marks a clear improvement in macroeconomic momentum.
Moreover, higher LNG revenues will strengthen government finances. In turn, this improvement should support spending across the non-hydrocarbon economy.
Despite these positives, lending growth will likely remain moderate. Analysts expect loan expansion between 4 percent and 5 percent during 2026.
Notably, recent credit growth concentrated in cyclical sectors. These sectors include real estate, hotels, contracting, and investment companies.
Together, these segments account for nearly half of domestic credit. Therefore, banks continue to monitor risks closely.
In particular, commercial real estate presents potential pressure on asset quality. Consequently, lenders remain cautious when extending new exposure.
Meanwhile, Qatar’s property market shows signs of recovery. Property transactions rose sharply during 2025, driven by residential demand near Doha.
Additionally, regulatory reforms support market confidence. For example, the residency-by-investment scheme continues to attract expatriate investors.
At the same time, the hotel sector improved gradually during 2025. Tourist arrivals increased, supported mainly by visitors from GCC countries.
Regarding asset quality, analysts expect further improvement. The non-performing loan ratio should decline to about 3.4 percent by 2026 and 2027.
Previously, the ratio stood near 3.7 percent. Therefore, the trend reflects improving borrower performance.
Large institutions such as QNB and QIB continue to anchor sector stability. As a result, systemwide risks remain contained.
Nevertheless, some mid-sized banks still carry legacy real estate exposure. Consequently, Stage 2 loans remain elevated for specific lenders.
Even so, interest rate cuts and prior provisions support balance sheets. Moreover, recoveries and write-offs continue to stabilize portfolios.
Importantly, coverage ratios remain strong across the system. Estimates place coverage near 128 percent as of late 2025.
Looking ahead, analysts expect coverage to stay above 100 percent. Therefore, Qatar banking resilience remains intact through 2026.
Overall, Qatar banking resilience reflects prudent regulation, energy-led growth, and disciplined risk controls. Consequently, the sector enters 2026 with confidence and stability.
