Qatar Investment Authority brings back $20bn from abroad to support banks

Qatar’s sovereign wealth fund has brought back $20 billion from abroad to shore up domestic banks and mitigate the impact of the Arab quartet boycott, according to the country’s latest bond prospectus.

The Qatar Investment Authority placed billions of dollars with local banks immediately after the diplomatic crisis broke in June as some lenders in Saudi Arabia, the UAE and Bahrain started withdrawing funds, according to the document, a copy of which was seen by Bloomberg. Almost $30bn of non-resident deposits left the country, the document shows.

Qatar, the world’s biggest exporter of liquefied natural gas, is meeting fixed income investors since yesterday to potentially issue its first dollar-denominated bond since 2016.

The country’s credit rating was cut by S&P Global Ratings and Fitch Ratings after Saudi Arabia, the UAE, Bahrain and Egypt severed diplomatic and transport links with Doha and accused Qatari leaders of backing extremists.

Cash injections into the banking system were co-ordinated by the Finance Ministry and the QIA, according to the prospectus. The QIA, one of the world’s biggest sovereign wealth funds, owns stakes in international companies ranging from Glencore to Barclays.

The QIA last month sold its entire stake in Veolia Environnement for about $622 million, months after it reduced holdings in Tiffany and Credit Suisse Group. The fund currently has about $320bn of assets, according to the Sovereign Wealth Fund Institute.