Fitch might cut nine Qatari banks

Fitch Ratings said it placed all ratings on Qatar National Bank, Commercial Bank of Qatar QSC, Doha Bank, Qatar Islamic Bank SAQ, Al Khalij Commercial Bank PQSC, Qatar International Islamic Bank, Ahli Bank QSC, International Bank of Qatar QSC and Barwa Bank QSC on Rating Watch Negative (RWN).

This action follows the June 12 placement of the Qatari sovereign on RWN and reflects significant uncertainty around the Qatari banking system resulting from the decision of Saudi Arabia, the United Arab Emirates, Bahrain, Egypt and some other Arab countries to sever diplomatic and logistical ties with Qatar.

While some discussions have taken place to resolve the crisis, the agency said it is becoming more likely that the crisis will be sustained and will negatively impact Qatar's economy.

Ultimately, the sovereign ability to support the banking system could weaken and all nine banks' issuer default ratings, which are driven by potential sovereign support, could be downgraded, Fitch explained.

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