Total assets of commercial banks in the country increased by 0.5% MoM (up 6.5% YTD) in October to reach QR1.79tn, according to QNB Financial Services (QNBFS).
The loan book declined by 0.2% MoM (+7.0% YTD) to QR1,207.5bn while deposits went down by 1% MoM to QR965.5bn (+6.6% YTD) in October. Public sector pushed the credit downwards (down 1.7% MoM in October), QNBFS said in its latest Qatar banking sector update.
Loans grew by 7% YTD for 2021, compared to a growth of 8.6% in 2020. Loans grew by an average 8.5% over the past five years (2016-2020), QNBFS noted.
The overall loan book declined by 0.2% in October 2021. Total domestic public sector loans went down by 1.7% MoM (+8.1% YTD).
The government segment’s loan book declined by 4.4% MoM (+10.3% YTD 2021). However, the government institutions’ segment (represents nearly 56% of public sector loans) remained flat MoM (+7.8% YTD), while the semi-government institutions’ segment moved up by 2.5% MoM (-3.7% YTD).
Private sector loans gained by 0.4% MoM and are up 7.8% YTD. Consumption and others segment mainly contributed toward the private sector loan growth last month.
Consumption and others segment (contributes nearly 21% to private sector loans) increased by 1% MoM (+1.9% YTD). General trade (contributes nearly 21% to private sector loans) moved up by 0.8% MoM (+8.6% YTD).
Services (contributes nearly 28% to private sector loans) increased by 0.2% MoM (+12.9% YTD).
However, QNBFS said the real estate sector (contributes nearly 21% to private sector loans) went down by 0.2% MoM (+5.5% YTD) during October.
As deposits went down by 1% in October (to QR965.5bn), the loans to deposits ratio (LDR) went up to 125.1% last month compared to 124.1% in September.
Public sector deposits went down by 4.9% MoM (+6% YTD) in October, resulting in the overall deposits drop.
Deposits grew by 6.6 % YTD for 2021, compared to a growth of 6.6% in 2020. Deposits grew by an average 7% over the past five years (2016-2020), QNBFS said.
Looking at segment details, the government institutions’ segment (represents nearly 56% of public sector deposits) moved down by 4.7% MoM (+0.9% YTD 2021).
The semi-government institutions’ segment increased by 2.7% MoM (+17% YTD 2021). The government segment declined by 8.3% MoM (+11.8% YTD).
Non-resident deposits increased by 1.2% MoM (+16.8% YTD 2021). Private sector deposits went up by 0.2% MoM (+0.8% YTD 2021).
On the private sector front, QNBFS noted the consumer segment moved down by 0.7% MoM (+1.7% YTD) while the companies and institutions’ segment went up by 1.4% MoM (-0.3% YTD 2021).
According to an industry analyst, the lower credit intake by the real estate sector “does not represent any trend.
“It is too early to say there is a trend on the real estate sector; it looks like it is temporary and demand will pick up again,” he said.
On the decline in public sector credit, the analyst said “this could be due to a pick-up in government revenues owing to higher oil and gas prices, early completion of infrastructure projects, and also the prioritisation of government projects.”