Qatar banking credit growth up in November on private sector: QNB

Bank loan growth in Qatar rose to 19.4% year-on-year in November 2015 from 16.5% in October, QNB Economics has said in a report. Loans to the public sector grew by 6.8% year-on-year and lending to the private and foreign sectors also grew by 23.6% and 41.9% respectively.“We forecast bank lending to continue growing increasingly driven by project lending and the expanding population,” QNB Economics said in its “Monthly Monitor”.Asset growth rose to 12.3% in November 2015 from 10.7% in October, it said.Foreign assets grew by 1.9% year-on-year, driven by expansion in credit (41.9%); while domestic assets grew by 16.6%, also driven by the growth in domestic credit (17%).“We expect growth in bank assets to reach 10.5% in 2015, increasingly driven by project lending and population growth,” QNB said. However, bank deposits year-on-year growth fell to 5.8% in November 2015 from 6.4% in October.Public sector deposits contracted by 9.9%; private sector deposits and non-resident deposits grew by 11.9% and 50.9% respectively.“We expect deposits to continue growing on strong population growth,” QNB Economics said.Overnight interbank rates were stable at 1.17% in November 2015 as compared with 1.21% in October.The 1-week interbank rate rose by 17 basis points to 1.36% in November, the 1-month interbank rate rose by 20 basis points to 1.45% in November and the 1-year interbank rate was stable at 1.9%.Broad money (M2) growth rose to 3.4% in December from 3.1% in November.The rise was mostly attributable to the pickup in growth of quasi money from 3.5% in November to 3.9% in December, and growth in M1 also rose to 2.1% in December from 1.9% in November.“We expect M2 to continue growing as strong population growth is projected to drive the expansion in deposits,” QNB Economics said.Qatar’s population grew by 8.9% year-on-year in January to reach 2.42mn, driven by the steady infrastructure spending.The male population rose by 9.4% year-on-year, reaching 1.85mn in December while the female population increased by 7.4% year-on-year over the same period, reaching 0.57mn.“We expect Qatar’s on-going investment programme to continue to attract expatriates, resulting in overall population growth of 4.1% in 2016,” QNB Economics said.