By Santhosh V Perumal
Business Reporter
Indicating an expected recovery in the sector, total credit extended to the real estate sector by Qatar’s commercial banks grew by a robust 53% year-on-year in May, outpacing the total domestic loan growth, even as consumer loans fell, according to official figures.
Commercial banks’ total credit to the real estate sector surged to QR59.97bn in May 2011 compared to QR39.19bn in the previous-year period, according to Qatar Central Bank data
Moreover, total credit to private sector outpaced the public sector, reflecting the growth potential in view of the country’s diversification. Non-Arab banks’ credit grew faster than their Arab counterparts within the foreign lenders segment. Commercial banks’ total credit to real estate sector, which is the second largest recipient of loans, surged to QR59.97bn in May 2011 compared to QR39.19bn in the previous year period, according to Qatar Central Bank data. The realty segment constituted 19.97% of the total domestic credit.
Total credit extended by commercial banks grew by 9.47% to QR320.92bn, of which domestic credit comprised QR300.33bn (93.58%) and foreign credit QR20.59bn (6.42%).
Total domestic credit rose 10.06% and foreign credit by 1.58%, which comes amidst a general fall in the average (weighted) interest rates on loans and overdrafts.
The interest rate on loans of less than one year fell to 4.63% from 7.59% in May 2010, 7.67% from 9.02% (one to three years) and 5.80% from 8.83% (over three years) and that on overdraft to 8.39% from 8.77% in May 2010.
Of the total QR320.92bn credit, Qatari banks contributed 95.58% (QR307.68bn) and the remaining 4.42% (QR14.23bn) by foreign banks.
Within the local lenders, traditional banks’ share was 77.14% (QR237.35bn), followed by Islamic banks’ 22.54% (QR69.34bn) and specialised institutions’ 0.32% (QR0.99bn).
Within the foreign banks, non-Arab banks contributed 73.65% (QR10.48bn) and the remaining 26.35% (QR3.75bn) came from Arab lenders.
Credit to the public sector, which cornered the maximum 32% of domestic credit, could grow only by a paltry 0.83% to QR96.06bn in May.
Of the QR96.06bn total credit to the sector, credit to government stood at QR31.79bn, followed by government institutions (QR47.33bn) and semi government institutions (QR16.94bn).
Credit to the private sector (comprising general trade, contracting and real estate, consumer and other sectors) surged by 14.99% to QR204.27bn, which was 68.02% of the total domestic credit.
However, consumer loans, which are the third largest segment with a share of 19.11% in the total domestic credit, reported a marginal 0.09% fall to QR57.38bn, which consisted of QR53.52bn of loans and QR3.86bn of overdraft.
Commercial banks’ loans to general trade, which constituted 10.90% of total domestic credit, saw a 25.31% growth to QR32.73bn, which included QR30.87bn of loans and QR1.86bn of overdraft.
The services sector, which cornered 10.05% of total domestic credit, saw a 12.61% growth in their credit from commercial banks to QR30.18bn.
Credit to the contracting sector fell 5.80% to QR13.65bn, which was 4.55% of the total domestic credit. The contracting and real estate sector put together saw QR71.87bn of loans and QR1.75bn of overdraft.
Credit to industrial sector grew by an impressive 17.81% to QR6.35bn, which constituted 2.11% of total domestic credit.
Credit to other sectors plunged by 51.04% to QR4.01bn, which was 1.34% of the total domestic credit.
