Qatar Banks Eased Property Loan Repayments, Doha Bank CEO Says

(Bloomberg) -- Qatar’s banks eased repayment terms on real-estate loans, according to the chief executive officer of Doha Bank QSC, after the Saudi Arabia-led standoff hurt property prices.

“Cash flows have been redefined, debt has been restructured to see that debt-servicing capacity is not in danger in the coming days for real estate owners,” Raghavan Seetharaman said in an interview with Bloomberg TV on Monday. “Banks are also cautious in terms of overall lending for real estate.”

Home prices are going through a “minor correction” but retail real estate prices have held up well, he said.

Overall real estate prices have declined 23 percent since November 2015, according to central bank data.

“It’s not a major correction or a collapse, it is just a correction,” Seetharaman said. It’s a “question of time” before demand for office space also rises due to the planned increase in liquefied natural gas production, he said.

The price of office space in Doha has fallen by 50% to 60% since Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic relations and closed transport routes with the Persian Gulf nation in June 2017, the CEO said. The four Arab countries accuse Qatar of funding Islamist terrorism, charges that Qatar denies.

Seetharaman also said:

• Local liquidity is improving and will improve further
  • The government budget was drawn up assuming oil prices at $55 a barrel and the resulting surplus will help close the gap between loans and deposits
• Capital adequacy is in good shape

--With assistance from Manus Cranny.

To contact the reporters on this story: Yousef Gamal El-Din in Dubai at ygamaleldin@bloomberg.net;Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Claudia Maedler

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