Emerging market bonds

31 July 2026, 12:40 UTC Chief Investment Office GWM Investment Research For investors outside of the US

Qatari credit: Deteriorating outlook, but supported by substantial buffers Emerging market bonds Authors: Tatiana Boroditskaya, PhD, Analyst, UBS AG London Branch; Emre Tekmen, Analyst, UBS Switzerland AG

• We keep a Deteriorating credit outlook on all Qatari issuers under CIO credit coverage, including the sovereign, Qatar National Bank, Qatar Islamic Bank, Commercial Bank of Qatar, Qatar International Islamic Bank, and Ooredoo amid ongoing security-related uncertainty.

• Qatari banks posted mixed 1H26 results. While asset quality and capitalization remained sound, the banks faced cost pressures and increased competition for deposits. Amid ongoing geopolitical uncertainty, several banks suspended interim dividends. International telecom provider Ooredoo posted solid results, despite some headwinds from logistical constrains in Gulf Source: Getty Images markets.

• The outlook for the energy market, geopolitical Please note that CIO does not certify compliance with developments, and idiosyncratic factors relevant to Sharia for the sukuk mentioned in this report, but instead individual issuers are key factors to monitor. relies on the issuers' indication of an instrument being sukuk and its structure. The labeling of instruments as sukuk in this report should not be construed as implying a CIO view on the veracity of Islamic credentials.

Focus on Fitch rating actions Table 1 - CIO credit outlooks and credit risk flags Fitch placed Qatar’s AA rating on credit watch negative on 30 March due to uncertainty related to the security environment and the downside risks to Qatar’s energy infrastructure in a scenario of a prolonged conflict. Following this action on the sovereign, Fitch has placed credit ratings of all Qatari banks we cover on credit watch negative, amid potential lower sovereign’s capacity Source: UBS, as of 31 July 2026 to provide support. Ooredoo is not rated by Fitch. We would not rule out negative credit rating actions by the major agencies, and any downgrades at the sovereign level are likely to be reflected at the bank and corporate level too.

This report has been prepared by UBS AG London Branch, UBS Switzerland AG. Analyst certification and required disclosures begin on page 8. UBSFS accepts responsibility for the contents of this report. U.S. persons who receive this report and wish to effect any transactions in any security discussed in this report should do so with UBSFS and not UBS AG.

Emerging market bonds: For investors outside of the US

Table 2 - Credit ratings The macroeconomic impact is already visible in revised forecasts. Before the conflict, the IMF expected Qatar to benefit from LNG expansion, with medium-term growth averaging around 4%. Following the damage to Ras Laffan and related export disruptions, the IMF now forecasts GDP to contract by 8.6% in 2026, a 15-percentage-point downgrade versus earlier projections. While the IMF expects a rebound once energy production normalizes, the recovery Source: Moody's, S&P, UBS, as of 31 July 2026 path remains contingent on the speed of repairs and the absence of further disruptions to energy infrastructure.

Banks Sovereign UBS credit view: Deteriorating In 1H26, Qatari banks under CIO coverage saw net profits Agency ratings: Aa2, stable / AA, stable on average decline 2.7% y/y. This was predominantly driven Analyst: Emre Tekmen by Commercial Bank of Qatar (CBQ), which posted a 19.6% y/y net profit decline due to higher provisions and results We downgraded our credit outlook on Qatari sovereign (and from its Turkish subsidiary Alternatif Bank. Excluding CBQ’s all other Qatari issuers we cover) to Deteriorating on 24 results, 1H26 net income of QNB, QIB, and QIIB increased March, amid a decline in projected natural gas revenues by 2.9% y/y on average. The average 1H26 net loans/ over the coming years. We have, however, kept its credit financing grew 9.9% y/y, well above the average deposit risk flags unchanged, as substantial public foreign assets— growth rate of 4.4% y/y. Amid increasing competition for estimated at USD 541bn by the Institute of International…