Islamic banks in Qatar registered a strong double-digit year-on-year growth in credit extension in July, substantially outpacing the loan growth within the conventional domestic banks, according to the central bank data.

While Qatari banks showed enhancement in their loan book, foreign lenders’ credit path was on the southward movement, according to figures released by the Qatar Central Bank (QCB).

Total credit by Qatari banks saw an about 7% year-on-year growth to QR971.96bn; while that by foreign lenders witnessed about 5% decline to QR15.51bn in July 2019.

Among Qatari banks, traditional entities’ total credit expanded more than 4% to QR695.23bn and Islamic lenders’ by more than 13% to QR270.23bn in the review period.

Traditional banks’ credit accounted for about 72% of the total credit by domestic lenders and Islamic lenders’ accounted for the remaining 28% in the review period.

Traditional Qatari lenders exhibited strong affinity towards general trade and services sectors, which had seen substantial expansion in credit to them.

Within the traditional segment, Qatari banks’ credit to general trade more than doubled to QR89.02bn (14% of total domestic credit by them) and that to services and industry expanded 35% and 2% year-on-year to QR118.8bn and QR10.41bn (17% and 2%) respectively.

Nevertheless, credit from traditional Qatari lenders to contractors declined 15% to QR20.74bn (or 3% of total domestic credit extended by them); public sector by 13% to QR233.31bn (37%); consumption by 6% to QR65.88bn (10%) and real estate by less than 1% to QR92.77bn (15%).

The Shariah-principled Qatari banks’ credit across the sectors largely remained positive with that towards general trade and services especially witnessing robust expansion in July this year. In absolute terms, the consumption and real estate sectors accounted for 49% of their total domestic credit.

Islamic lenders’ credit to general trade registered more than 40% year-on-year expansion to QR28.66bn (or 11% of their total domestic credit); services by about 40% to QR22.82bn (9%); consumption by 11% to QR62.334bn (25%); real estate by 10% to QR60.13bn (24%) and public sector by 9% to QR56.54bn (22%); while that to industry declined more than 7% to QR5.5bn (2%).

Foreign banks' domestic credit amounted to QR15.32bn in July this year with bulk of them going towards general trade, contractors, consumption and services, together accounting for 84% for the total domestic credit extended by them.

Credit to general trade stood at QR6.66bn (or 43% of their total domestic credit); contractors QR2.4bn (16%); consumption QR1.94bn (13%); services QR1.91bn (12%); real estate QR0.99bn (6%); industry QR0.49bn (3%) and public sector QR0.67bn (4%).

Among foreign banks, non-Arab lenders' credit was higher (at 58% of total domestic credit) than that of Arabs' (at 42%) in July this year.

General trade and contractors were much favoured by Arab banks; while for the non-Arab banks, it was general trade, services and consumption sectors.

Arab banks' credit amounted to QR6.46bn in July this year with general trade receiving QR2.31bn; contractors QR1.47bn; consumption QR0.89bn, real estate QR0.75bn; services QR0.65bn and industry QR0.24bn.

Non-Arab lenders’ total credit stood at QR9.05bn, which includes QR4.35bn towards general trade; QR1.26bn for services; QR1.05bn for consumption; QR0.93bn for contractors; QR0.67bn for public sector; QR0.25bn for industry and QR0.24bn for real estate.

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