Page 30 - Annual Report 2024 EN

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Bank and Insurance Supervision
The Bank and Insurance Supervision (BIS)
department is responsible for prudential supervision
of 23 banks and insurance companies conducting
business in and from the Qatar Financial Centre.
The banking sector in the QFC continues to experience
robust growth with the centre recording year-on-
year growth in assets of 6.9% on the back of the
region’s robust macroeconomic environment and
favourable interest rates. This growth has been
driven by QFC banks who have continued deepening
their product and service offerings to customers in
and out of Qatar. Most of the QFC banks operate as
branches or subsidiaries of overseas banks whose
main focus is targeted at expanding their operations
across the Middle East and North Africa region.
QFC insurers continue recording modest growth
with gross written premiums recording an increase
of 3.9% year-on-year. Approximately two thirds of
the QFC insurance sector are concentrated with the
top three insurers with Accident and Health line of
business dominant followed by Property and Motor.
The overall profitability of the QFC insurance sector
in 2024 was QAR 69 million, although considerably
lower compared to 2023, was generally stable. The
profitability in 2023 was unusually high compared
to the other years mainly due to the significant
recoveries from reinsurers and release of reserves.
Best-in-Class Supervision
The QFCRA has designed a best-in-class regulatory
and supervisory framework that is benchmarked to
international standards in a manner that is proportionate
to the nature, scale and complexity of financial services
institutions operating in the QFC. In its quest for
ensuring alignment with international standards, the
QFCRA actively participates as a member of various
standard setting bodies including the Basel Consultative
Group (BCG), International Association of Insurance
Supervisors (IAIS), International Organization of
Securities Commissions (IOSCO), Islamic Financial
Services Board (IFSB) and the Accounting and Auditing
Organisation for Islamic Financial Institutions (AAOIFI).
During the year, the QFCRA was involved in several
initiatives that contributed to the development of
international standards. Our work with international
standard setters is conducted through direct
participation through various committees, working
groups and task forces as well as through written
submissions to surveys and consultation papers.
Supervision Priorities and Key Focus
Areas for 2024
The global economy continued facing ongoing
challenges arising from uncertain and volatile macro-
financial environment and heightened geopolitical
tensions which continued to pose challenges to financial
stability, whilst inflationary pressures continued to
ease and coordinated efforts by global central banks to
ease interest rates necessitated banks to adjust their
lending and funding strategies to reflect these changes.
These developments necessitated increased vigilance
and rigour in supervisory oversight to ensure that the
financial system is better able to withstand these shocks.
Against this backdrop, Supervision focused its attention
on the following key priorities and risk areas:
Credit Risk
Supervision conducted targeted reviews on banks’ credit
risk framework aimed at ensuring that banks strengthen
their credit origination standards. Specific attention was
given to identifying the build-up of risks in portfolios
most sensitive to financial shocks such as commercial
real estate, specialised lending and private credit.
Asset and liability management and liquidity risks
Supervisors focused their attention on the adequacy
of supervised institutions’ asset and liability
management frameworks with a view to ensuring
resilience to short-term liquidity shocks.
T ABLE OF C ONTENT S
Corporate governance and risk management
Effective governance and risk management in banks
is the cornerstone of a safe and sound financial
management system. Supervision focused on
strengthening identified vulnerabilities in firms’
governance frameworks. The division performed reviews
of firms’ compliance to the governance and control rules
and required improvements to address deficiencies
in the functioning of governing bodies and associated
committees, control functions and risk reporting.
Self-Assessment to revised Basel Core
Principles (BCPs)
The division commenced its self-assessment
of compliance with the recently revised Basel
Core Principles and is progressing with the
necessary changes required in our regulatory
framework to ensure alignment to the BCPs. This
is a necessary step to embed the lessons learnt
from previous failures in bank supervision.
Revisions to the prudential reporting
framework for banks and Insurers
With the finalisation of the Basel III Rules, the
division has amended the prudential returns to
ensure regulatory data collected aligns with the
requirements of the revised Rules. Additionally,
the insurance prudential returns are being
updated to ensure compliance with IFRS 17.
Through these efforts, the division remains focused
on ensuring a robust and resilient financial sector that
can withstand the numerous challenges and is best
placed in supporting the Qatar National Vision 2030.