Business
Public sector drives Qatar banks’ loans, deposits decline in April
Public sector drives Qatar banks’ loans, deposits decline in April
Local banks saw their loans and deposits drop in April after a growth in March, mostly due to the public sector activities, QNB Financial Services said in its monthly banking sector update. The loan book decreased by 0.5% month-on-month (MoM) and (+2.9 year to date - YTD) after growing by 3.2% MoM in March (gaining by 1.7% MoM in February). Deposits followed suit and dipped by 0.2% MoM (+3.1 YTD) in April. Public sector pulled down total credit growth with a decline of 4.7% MoM (down 5.9% YTD). Moreover, public sector deposits receded by 4.8% MoM (down 4.5% YTD). Thus, the loans-to-deposits ratio (LDR) remained at 109% in April. The public sector deposits dropped by 4.8% MoM in April compared with a decent growth of 1.3% MoM in March. Delving into segment details, the government institutions’ segment, which represents 57% of public sector deposits, declined by 8.3% MoM (down 4.4% YTD). Moreover, the government segment receded by 6.9% MoM (down 4.5% YTD) after surging by 50.1% MoM in March (dropping by 11.4% and 22.9% in February and January respectively). On the other hand, the semi-government institutions’ segment posted a strong performance, expanding by 13.6% MoM (down 4.9% YTD). On the private sector front, the companies and institutions’ segment climbed up 1.1% MoM (down 1.3% YTD). The consumer segment followed suit and ticked up by 0.8% MoM (+5.7% YTD). Non-resident deposits grew by 10.7% MoM (+45.5% YTD). The overall loan book reversed its growth trajectory and declined MoM, QNBFS said.Total domestic public sector loans decreased by 4.7% MoM (down 5.9% YTD) compared with a robust growth of 4.7% MoM in March. The government segment’s loan book contracted by 23.5% MoM (+5.7% YTD) compared with a robust growth of 23.7% in March. On the other hand, the government institutions’ segment (representing 64% of public sector loans) exhibited a healthy performance (+2.8% MoM) after putting up a flat show in March (+0.4% YTD). Furthermore, semi-government institutions’ segment expanded by 6.1% MoM (down 7% YTD). Hence, the government sub-segment pulled the overall loan book down for the month of April 2015. Private sector loans grew by 1.9% MoM (+6.7% YTD) compared with a 3.1% rise MoM in March. The consumption and others segment followed by general trade positively contributed toward the loan growth. Loans to the consumption and others segment (that contributes 31% to private sector loans) expanded by 4% MoM (+11.8% YTD) while general trade increased by 5% MoM (+8.8% YTD). Moreover, the real estate, which contributes 25% to private sector loans and contractors segments increased by 1.1% MoM (+0.2% YTD) and 1% MoM (+7.3% YTD), respectively. On the other hand, services segment, which contributes 18% to private sector loans, dipped by 2.2% MoM (+5.4% YTD).