Banks in Qatar have seen a drop in both their lending and deposit portfolios month-on-month (MoM) in October, data provided by QNB Financial Services shows.
While the loan book decreased by 2% MoM, deposits declined by 0.3% MoM in October, QNBFS said. Public sector (down 5.7% MoM in October) was the primary driver of the overall decline in the loan book, QNBFS said.
The loan book, however, was up 7.9% year-to-date (YTD) while deposits were up 8% YTD in October.
Thus, the loans-to-deposit ratio (LDR) declined to 105% compared with 107% in September.
“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 followed by the small and medium enterprises (SMEs) and consumer lending to be the primary drivers of the overall loan book in 2014 and 2015. Our view is based on the expected uptick in project mobilisation in the coming months,” QNBFS said. Public sector deposits decreased by 3.3% MoM (+6.3% YTD 2014) in October.
Delving into segment details, the government institutions’ segment (representing about 57% of public sector deposits) improved by 0.5% MoM (+11.4% YTD 2014). Moreover, the semi-government institutions segment posted a growth of 10.1% MoM (up 0.1% YTD 2014). However, the government segment decreased by 15.4% MoM (+0.3% YTD).
On the other hand, private sector deposits increased by 1% MoM (+9.1% YTD 2014). On the private sector front, the companies and institutions segment increased by 1% MoM (+8.1% YTD 2014), while the consumer segment posted a growth of 1.1% MoM (up 10.1% YTD). The overall loan book declined by 2% MoM compared with a 4% growth MoM in September 2014. Total domestic public sector loans decreased by 5.7% MoM (down 5.7% YTD). The government segment’s loan book dipped 16.8% MoM (up 1.6% YTD 2014). The government institutions segment (representing about 59% of public sector loans) declined by 1.5% MoM and is down 11.8% YTD.
The semi-government institutions segment declined by 0.5% MoM (+11.4% YTD). Hence, all the three public sector segments pulled the overall loan book down for October 2014. Private sector loans gained by 0.3% MoM and are up 13.8% YTD. Consumption and others (contributing about 30% to private sector loans) increased by 0.9% MoM (+16.9% YTD).
The real estate segment (contributing 27% to private sector loans) grew by 2.1% MoM (+5.7% YTD). However, the services segment posted a decline of 7.2% MoM, but is still up 11.8% in the first ten months of 2014. Overall, the segments representing general trade (+27.1% YTD) and contractors (+23.0% YTD) are the best performing segments in the private sector YTD. On the other hand, the Industry segment is flat YTD.
