Driven by the public sector, Qatar’s banking sector saw its loan book registering a 4% growth month-on-month (MoM) and 10.1% year-to-date (YTD) in September, QNB Financial Services (QNBFS) said in its latest monthly banking sector update.
Moreover, deposits also increased by 1.9% MoM (deposits increased by 1.3% MoM in August), the report said. Thus, the loans-to-deposit (LDR) ratio increased to 107% compared with 105% in August.
“Going forward, we expect increased activity in the sector. We continue to expect 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. Our view is based on the expected uptick in project mobilizations in the coming months,” QNBFS said.
Public sector deposits increased by 7.8% MoM (+9.9 YTD 2014) in September. Delving into segment details, the government institutions’ segment (represents about 55% of public sector deposits) improved by 2.1% MoM (+10.8% YTD 2014). Moreover, the semi-government institutions’ segment posted a growth of 12.8% MoM (down 9.1% YTD 2014). In addition, the government segment increased by 16.5% MoM (+18.6% YTD), while private sector deposits declined by 2.3% MoM (+8.0% YTD 2014).
On the private sector front, the companies and institutions’ segment decreased by 5% MoM (+7.0% YTD 2014) while the consumer segment posted flat performance, up 0.4% MoM and 8.9% YTD 2014. The overall loan book increased by 4% MoM compared with a 0.8% growth MoM in August 2014. Total domestic public sector loans grew by 3.9% MoM to recover lost ground (flat YTD).
The government segment’s loan book grew by 23% MoM (up 22.1% YTD 2014). However, the government institutions’ segment, which represents 57% of public sector loans, declined by 2.3% MoM and is down 10.5% YTD.
Furthermore, the semi-government institutions’ segment declined by 1.6% MoM (+12.0% YTD). Hence, the government institutions and semi-government segment pulled the overall growth down for the month of September 2014. Private sector loans gained by 2.4% MoM and are up 13.5% YTD.
Consumption and others, which contribute 30% to private sector loans) increased by 1.7% MoM (+15.8% YTD). Furthermore, the real estate segment (contributes 26% to private sector loans) grew by 2.1% MoM (+3.5% YTD). However, services segment posted a decline of 1.8% MoM but is still up 20.5% in the first nine months of 2014.
Overall, contractors (+22.2% YTD) and services (+20.5% YTD) segments are the best performing segments in the private sector YTD. On the other hand, the industry segment was down 1.3% YTD, QNBFS said.
