The overall loan book of Qatar’s banking sector exhibited improved performance in January, QNB said in its monthly banking sector update.
Total domestic public sector loans picked up by 1.7% month-on-month (m-o-m) after a 0.9% growth in December.
The government segment’s loan book grew by 4.2% m-o-m. The government institutions segment (representing about 63% of public sector loans) followed suit with a 1% m-o-m growth.
QNB has maintained its view that the public sector loan growth will be the primary driver of the overall loan book in 2014. The assumption is based on the expected uptick in project mobilisations in the coming months.
Private sector loans ticked up by 2.6% m-o-m, said the update. The general trade segment posted the biggest growth, up 6.3% m-o-m, while the consumption and others category (which contributes about 30% to private sector loans) loan book grew by 4.4% m-o-m. Real estate (which contributes 28% to private sector loans) retreated by 1.2% m-o-m. Specific loan-loss provisioning stood at 1.4% of average, trailing 12-months’ loans compared with 1.4% in December 2013.
QNB said the growth in loans and deposits improved in January. Loans climbed by 2.3% m-o-m. This is after a strong performance of 13.3% year-on-year (y-o-y) for 2013.
Deposits also expanded by 1% m-o-m in January (up 19.7% y-o-y in 2013).
“We expect activity in the banking sector to pick up in the coming months with public sector leading the way,” QNB said.
The banking sector’s loan-to-deposit ratio (LDR) increased to 107% in January this year compared with 105% in December 2013. In 2013, some banks issued Tier 1 bonds.
Commercial Bank and Doha Bank raised QR2bn each in Tier 1 notes at the end of December. The increased capital has improved their capital adequacy ratios (CAR) and provided additional funds to aid loan book growth in 2014.
Public sector deposits receded by 2.3% (down 0.6% m-o-m in December 2013), while private sector deposits gained by 4.1% m-o-m (up 4.5% m-o-m in December 2013).
The government institutions segment (that represents about 55% of public sector deposits) improved marginally by 0.3% compared with a 6.6% decrease in the previous month.
However, the government segment declined by 7.4% m-o-m compared with a 6.6% increase in the previous month. The semi-government institutions’ segment followed, declining by 1.3% m-o-m.
As for the private sector, the companies and institutions segment expanded by 4.2% m-o-m (up 7.3% m-o-m in December 2013) and the consumer segment expanded up by 4% m-o-m (up 2.0% m-o-m in December 2013).
