A robust double-digit growth in credit to the private sector has outpaced total loan expansion within Qatar’s commercial banks at the end of June 2019, indicating the growing resilience of the country’s corporate sector as Doha enters the third year of economic and trade blockade by the Saudi-led quartet.
The credit portfolio growth, mainly on account of strong recovery in credit offtake by the private sector, led the total assets of commercial banks in Qatar to register about 5% year-on-year increase to QR1.44tn at the end of June this year, according to the Qatar Central Bank (QCB) figures.
Of the total assets, about 67% was credit portfolio that amounted to QR971.7bn, which witnessed about a 5% growth year-on-year in June 2019.
Much of the credit went to the private sector, which accounted for more than 66% of the total, or QR643.68bn, in June this year. Credit to the private sector grew about 14% on a yearly basis.
The higher growth in credit to the private sector shows the resiliency in the overall economy especially outside the hydrocarbons, even amidst the economic blockade, market sources said.
The fast infrastructure development has been offering abundant opportunities to the private sector, whose credit needs have also been increasing, industry sources said.
At the recent World Economic Forum, Qatar had highlighted its strategies to promote sustainable development by embracing integrated policies to successfully increase the contribution of its non-hydrocarbon sector to gross domestic product, or GDP, in line with its National Vision 2030.
Credit to the public sector stood at QR313.54bn, or more than 32% of the total credit, in June 2019. Credit to the public sector, however, witnessed more than 10% decline rear-on-year.
Of the QR1.43tn assets, as much as QR1.23tn, or more than 84%, was domestic assets and the remaining QR0.23tn, or about 16%, was overseas in June 2019
The second largest component within the commercial banks' assets is securities portfolio, which stood at QR182.74bn, or about 13%, of the total in the review period. The securities portfolio had, however, seen more than 2% dip on a yearly basis.
Of the total QR182.74bn securities portfolio, conventional debt amounted to QR107.56bn, which registered more than 9% fall; and sukuk at QR71.33bn, which showed more than 11% increase year-on-year in June 2019.
Claims on banks stood at QR142.34bn in June this year compared to QR140.03bn in the corresponding period of the previous year.
Claims on the central bank amounted to QR65.46bn with required reserves at QR36.29bn at the end of June 2019 against QR49.07bn and QR35.78bn respectively in the same period of 2018.
Investments in subsidiaries and associates amounted to QR46.01bn in June 2019 compared to QR45.81bn in the previous-year period.
Other assets amounted to QR23.79bn in June this year against QR20.14bn in the previous year period, thus showing a more than 18% expansion year-on-year.
The banks’ net fixed assets reported a more than 4% growth year-on-year to QR6.91bn at the end of June 2019, and cash and precious metals witnessed a more than 24% jump to QR11.64bn.