Qatari banks should remain profitable and benefit from strong capitalization and adequate liquidity, with an only modest drop in net interest margins owing to interest rate cuts, said S&P Global Ratings in its report "Qatar Banking Outlook 2025: Resilient Performance To Continue," published today. The system's external debt is about one-third of domestic credit but the expectation of lower funding needs and the government’s highly supportive stance toward its banking sector mitigates the risk of external debt outflows if geopolitical risk escalates. "Geopolitical tensions in the Middle East are high but we currently do not expect a full-scale regional conflict, and we anticipate macroeconomic conditions in Qatar will remain broadly stable," said S&P Global Ratings credit analyst Juili Pargaonkar.