Loan growth in Qatar may improve in the coming months on the back of an expected uptick in project mobilisation, QNB Financial Services has said in its monthly banking update.
QNBFS said it expects improvement in the public sector, in addition to large corporate loan growth to be the primary drivers of the overall loan book in 2014 followed by the SMEs and consumer lending.
The loan book increased by 0.8% month-on-month (MoM), up 5.9% year-to-date (YTD), while deposits increased by 1.3% MoM (+6.3% YTD) in August.
After posting a decline of 1.0% MoM in July (primarily due to Ramadan and summer lull, public sector declined by 4.4% MoM in July 2014), loans increased by 0.8% MoM with private sector growing by 2.4% MoM, QNBFS said.
Deposits also increased by 1.3% MoM (deposits declined by 2.7% MoM in July, with public sector deposits declining by 3.8% MoM). Thus, the loans to deposit ratio (LDR) declined to 105% compared with 106% in July.
“Going forward, post the summer lull, we expect increased activity in the sector,” QNBFS said.
Public sector deposits increased by 0.7% MoM (+2.0 YTD 2014) in August. Delving into segment details, the government institutions’ segment (representing about 58% of public sector deposits) improved by 6.2% MoM (+8.5% YTD 2014). Moreover, the semi-government institutions segment posted a growth of 5.6% MoM (down 19.4% YTD 2014).
On the other hand, the government segment decreased by 10.1% MoM (+1.8% YTD). Private sector deposits grew by 1.4% MoM (+10.5% YTD 2014).
On the private sector front, the companies and institutions segment increased by 4.1% MoM (+12.7% YTD 2014), while the consumer segment receded by 1.1% MoM (+8.4% YTD 2014).
The overall loan book increased by 0.8% MoM after a decline of 1.0% MoM in July.
International credit, decreased by 6.6% MoM (+26.8% YTD 2014). Total domestic public sector loans grew by 0.5% MoM and are down 3.7% YTD.
The government segment’s loan book grew by 1.1% MoM (down 0.8% YTD 2014).
Moreover, the government institutions segment (representing 61% of public sector loans) grew by 0.7% MoM and is down 8.4% YTD. However, the semi-government institutions’ segment declined by 1.3% MoM (+13.8% YTD).
Private sector loans gained by 2.4% MoM and are up 10.8% YTD. The services segment also posted a growth of 7.8% MoM and is up 22.7% in the first eight months of 2014. The consumption and others segment (contributing 30% to private sector loans) increased by 2.0% MoM (+13.9% YTD).
Furthermore, the real-estate segment (contributing 26% to private sector loans) grew by 0.9% MoM (+1.4% YTD). Overall, the services (+22.7% YTD) and contractors (+17.1% YTD) segments are the “best performing” in the private sector YTD.
