Public sector deposits retreat by 5pc in Nov: QNB

December 24, 2013 - 9:08:23 am
DOHA: Public sector deposits retreated by 5 percent month-on-month in November, but up 28.1 percent year-to-date, while private sector deposits gained by 3.7 percent MoM and grew 15.1 percent YTD, QNB’s monthly banking sector update noted yesterday.

The government institutions segment ticked up by 1.4 percent (+27.6% YTD) vs a 4.9 percent decline in the previous month. 

However, the government segment retracted its positive momentum, contracting by 16.4 percent MoM but it was still up 44.1 percent YTD. The semi-government institutions segment followed in the footsteps of the government segment slipping by 4.2 percent MoM (+7.4% YTD). 

On the private sector front, the consumer segment expanded by 6.1 percent MoM (+23.0% YTD) and the companies and institutions segment ticked up by 1.2 percent MoM (+7.5% YTD). 

The overall loan book exhibited flattish performance in the month of November. Total domestic public sector loans declined by 1.1 percent MoM after a robust performance in October. On a YTD basis, public sector loans are up 8.8 percent. The government segment loan book contracted by 7.6 percent MoM (+6.3% YTD). 

The government institutions’ segment  inched up by only 0.8 percent MoM (+12.1% YTD). 

“We believe public sector loan growth will be the primary driver of the overall loan book in 2014. Our assumption is based on the expected uptick in project mobilisations in the coming months,” QNB noted.

Private sector loans inched up by 0.9 percent MoM (+12.2% YTD). The Services segment posted the biggest growth, up 9.9 percent MoM (+43.6% YTD), while the Real Estate loan book retreated by 1.2 percent MoM (down 3.1% YTD). Consumption and others declined 1.5 percent MoM (+13.5% YTD).

Specific loan-loss provisioning stood at 1.4 percent of average trailing 12-months loans vs 1.4 percent in October 2013.

Loans and deposits growth was flat in November. Loans declined by 0.1 percent MoM but are up 11.9 percent YTD.

Deposits also dipped by 0.2 percent MoM (+16.4% YTD) in November 2013. Going forward, QNB expects activity in the banking sector to pick up in the coming months. 

The banking sector’s loan-to-deposit ratio (LDR) remained at 107 percent at the end of November 2013 vs 107 percent in October 2013. 

Going forward, some banks will be issuing Tier I bonds. Commercial Bank of Qatar (CBQK) and Doha Bank (DHBK) announced that they will be raising QR2bn each in Tier 1 bonds to improve their capital adequacy ratios (CARs) as well as provide additional funds aiding loan book growth.

The Peninsula
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