Qatar banking sector total assets up 0.6% month-on-month to QR1.891tn in April: QNBFS

Qatar banking sector total assets grew 0.6% month-on-month (MoM), down 0.7% so far in 2023, in April to reach QR1.891tn, QNB Financial Services (QNBFS) said in a report on Tuesday.Total loans provided by Qatari banks went down 0.4% MoM to QR1, 249.5bn, while deposits contracted by 0.3% to QR964.2bn in April.According to QNBFS, the country’s private sector pushed the overall credit lower.Loans have edged down by 0.5% in 2023, compared to a growth of 3.3% in 2022. Loans grew by an average 6.7% over the past five years (2018-2022).Loan provisions to gross loans was at 3.7% in both April and March of this year.The deposits slide in April was mainly due to a drop by 1.5% in the private sector. Deposits have gone down by 3.5% in 2023, compared to a growth of 2.6% in 2022. Deposits grew by an average 4% over the past five years (2018-2022), QNBFS said and noted that as deposits moved down by 0.3% in April, the loans to deposits ratio (LDR) declined to 129.6% compared with 129.7% in March.The overall loan book went down 0.4% in April. Domestic private sector loans moved down by 0.6% MoM (+0.2% in 2023) in April. The services segment was the main reason behind the private sector loan drop. Services (contributes nearly 30% to private sector loans) declined by 1.9% MoM (0.4% in 2023), while consumption and others (contributes nearly 20% to private sector loans) moved lower by 0.4% MoM (-1.2% in 2023).However, the real estate segment (contributes nearly 23% to private sector loans) edged up by 0.1% MoM (0.0% in 2023), while general trade (contributes nearly 21% to private sector loans) gained marginally by 0.1% MoM (+1.8% in 2023) in April.Total public sector loans remained flat MoM (-2.3% in 2023). The government segment (represents nearly 28% of public sector loans) declined 1.0% MoM (-11.1% in 2023).However, the government institutions’ segment (represents nearly 67% of public sector loans) loan book increased 0.4% MoM (+2% in 2023), while the semi-government institutions’ segment gained 0.4% MoM (-1.9% in 2023).Outside Qatar loans moved up by 0.4% MoM (0.4% in 2023) in April, QNBFS noted.Private sector deposits declined by 1.5% MoM (-2% in 2023) in April. On the private sector front, the companies and institutions’ segment fell by 3.6% MoM (-7.5% in 2023).However, the consumer segment increased by 0.5% MoM (+3.5% in 2023) in April.Public sector deposits increased by 0.8% MoM (-4.1% in 2023) in April.Looking at segment details, the government segment (represents nearly 30% of public sector deposits) was the main driver with a growth of 4.4% MoM (-4.4% in 2023), while the semi-government institutions’ segment rose by 2% MoM (-18.7% in 2023).However, the government institutions’ segment (represents nearly 58% of public sector deposits) moved lower by 1.1% MoM (-0.4% in 2023) in April.Non-resident deposits shifted from its general downward trend for the second consecutive month and moved up by 0.4% MoM (-5.9% in 2023) in April.Qatar banking sector loan provisions to gross loans was at 3.7% in both April and March.Qatar banking sector liquid assets to total assets was at a higher 31% in April 2023, compared to 30.4% in March.An analyst told Gulf Times, "Higher interest rates could have acted as a deterrent for credit to the private sector with overall loans to the private sector declining by 0.6% in April".