KPMG data shows the deposits with listed Qatari banks are up, with a healthy growth of 11% (up by QR67.5bn) in 2014 compared with end-December 2013. PICTURE: NASAR TK


By Pratap John/Chief Business Reporter


The collective asset base of all listed banks in Qatar has increased by 12% (or QR105.8bn) in 2014 compared with the previous year, primarily due to the increase in lending portfolios by QR82.6bn (14%), according to KPMG in Qatar.
This is predominantly a result of increased public spending on the back of a gradual acceleration of infrastructure projects, KPMG said.
Omar Mahmood, partner at KPMG in Qatar and head of the firm’s Financial Services division in the Middle East and South Asia said there was a “continued positive story” for listed banks in Qatar during 2014.
“Over the past year, the country has seen robust asset growth; lower impairment charges; stronger asset quality; higher profitability; well controlled cost to income ratios; and capital adequacy ratios that remain well above the QCB minimum requirements. All of these factors have contributed to the current strength of the banking sector,” Mahmood said.
He said, “Combined net profitability for all banks increased by 12% from the year ending December 2013, predominantly driven by higher net interest income and lower net impairment charges. Strong economic growth and increased public sector infrastructure activity have been the main drivers behind the positive results.
“Market sentiment also appears to be correlated with fundamentals, with the share prices for almost all banks exhibiting a positive change from the prior period. Islamic bank share prices have well outperformed their conventional counterparts, with an average increase of 41% compared to 10% for the conventional banks.”
KPMG data show the deposits of listed Qatari banks are up, with a healthy growth of 11% (up by QR67.5bn) in 2014 compared with end-December 2013.
“This will certainly be an area of continued focus for banks in Qatar as they look to reduce the reliance on large one off government deposits. In addition the recently issued Qatar Central Bank regulations on the ‘loan to deposit’ ratio, which come into effect over the next few years, will force banks to actively look to increase their customer deposit base, and if not then look at restricting their balance sheet growth ambitions,” Mahmood said.
Despite concerns over the recent oil price decline, possible government spending cuts and increasing regulatory requirements, the overall Qatari banking sector outlook still remains positive.
Bank lending and investment activity, both domestic and international, are expected to rise on the back of further acceleration of infrastructure projects ahead of the 2022 FIFA World Cup and increased public spending; and wider economic growth in line with the 2030 Qatar National Vision will continue to drive population growth and help maintain a healthy banking sector.