Overdraft, credit card rates drop to ‘record lows’ in 2012
March 12 2013 12:07 AM

By Pratap John/Chief Business Reporter

The credit card interest rate that stood at 20.7% in 2008 has fallen to 9.1% in December 2012, QNB said in its “Qatar Monthly Monitor”.
In April 2011, QCB had reduced the amount local banks can lend to both Qataris and expatriates and limited the interest lenders can charge on the loans to 1.5% points over the QCB rate.
Overdraft rates that stood at 8.8% in 2008 closed at 6.6% in December 2012, QNB said.
The interest rate on demand deposit fell to 0.7% in 2012 from 1.8% in 2008.
The interbank overnight rate closed at 0.8% in 2012 in place of 2% in 2008.
According to QNB, the central bank’s deposit rate was 0.8% in December, 2012 compared with 2% in 2008. QCB lending rate fell to 4.5% in 2012-end compared with 5.5% in 2008.
The total assets of Qatar’s banking sector increased by 17.5% to reach QR821bn in 2012, the QNB analysis shows. The main driver was domestic assets, which increased by 18.2% in 2012.
Domestic credit and investments, which account for 73% and 21% of domestic assets, grew by 26.6% and 10.6% respectively.
Conventional banks accounted for 72% of overall banking sector assets in 2012, followed by Islamic banks with 24% and foreign banks with 4%.
The assets of conventional banks increased by 17.8%, and those of Islamic banks by 21%, while foreign bank assets declined by 2.3%.
Foreign banks have witnessed weak domestic credit growth in 2012 and declines in previous years.
QNB Group’s assets accounted for 44.7% of Qatar’s total banking sector assets and grew by 21.5% in 2012.
The overall credit facilities distributed by Qatar’s banking sector went up 26% to QR509bn in 2012.
Credit to the public sector increased by 46.5% to QR219bn, driving overall loan growth. The credit facilities to the public sector increased by an average of 43% over the past three years due to the increasing use of short to medium term funding to finance infrastructure projects.
The growth in credit facilities to the real estate and construction sector slowed down to 10.5% in 2012, after increasing by 33.1% in 2011. The growth in credit facilities for consumption (retail) also slowed from 19.8% to 4.5%.
New QCB regulations impacted growth in these sectors.
QNB Group’s loans and advances went up by 28.9% in 2012, representing 49% in the sector’s total credit.
The total domestic deposits of the Qatar’s banking sector grew by 26% in 2012 to reach QR458bn.
The public sector again was the key growth driver for overall gains in the banking sector deposits. Deposits received from the public sector shot up by 43.6% (QR54.8bn) in 2012 and came mainly in the form of long term foreign currency deposits.
Non-resident deposits went up by 105.3% (QR20.9bn) in 2012, while private sector deposits moved up by 8.6% (QR18.7bn).
The deposits of conventional banks increased by 23.3% in 2012 and accounted for 69% of overall deposits, while that of Islamic banks went up by 39.8% and its share increased to 27% of overall banking sector deposits.
Foreign banks deposits were marginally up by 0.3%.
QNB Group’s deposits rose by 34.9% and held a market share of 53.5% in total domestic banking sector deposits.

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