DOHA: Banks in Qatar recorded the highest year-on-year growth of 21.3 percent in loan books in the fourth quarter of 2014 (4Q13) in the Gulf region. Given the strong growth in loan books, the region’s net interest income (NII) was also led by Qatar-based banks with 22.6 percent in 4Q13.
Overall, the loan book growth among GCC banks increased 11.1 percent YoY to $669.5bn in 4Q13. The high growth rate of banks in Qatar was followed by the banks in UAE (9.3 percent), Saudi Arabia (9.1 percent) and Kuwait (6.5 percent).
The “GCC Banking Sector 4Q13” report of Global Investment House (GIH) noted that banks in Qatar maintained their loan growth momentum on increased public sector spending. Moreover, acquisitions by Qatar National Bank and Commercial Bank during the year boosted loan growth considerably. Among Qatar-based banks, Commercial Bank, Qatar National Bank, and Doha Bank registered loan book growth of 37.6 percent, 24.3 percent and 21.8 percent YoY, respectively
“NII of GCC banks grew 10.9 percent YoY and 2.1 percent quarter-on-quarter. Banks in Qatar recorded the highest NII growth (22.6 percent), followed by those in the UA E (10.9 percent) and Saudi Arabia (7.8 percent),” the report said. Commercial Bank witnessed a robust growth of 36.6 percent YoY in NII driven by increased loan book and other factors. Qatar National Bank reported a 26.1 percent due to the consolidation of subsidiary NSGB.
Total deposits of GCC banks under GIH converge expanded 11.7 percent YoY to $744.4bn in 4Q13. Qatar-based banks witnessed the strongest growth in deposits with 24.5 percent YoY, followed by banks in the UAE (10.5 percent) and Kuwait (10.2 percent). However, on QoQ basis, deposit growth was sluggish and remained at 2.1 percent YoY.
Loan-to-deposit ratios of GCC banks in GIH’s coverage remained at 89.9 percent in 4Q13 compared with 90.5 percent in 4Q12. Among individual banks, Commercial Bank of Qatar led with a 53.2 percent YoY growth in deposit base, followed by Qatar National Bank (24.3 percent), Doha Bank (23.6 percent) and Burgan Bank (19.1 percent).
Provision expense of the banks increased 18.2 percent YoY during 4Q13, mainly due to significant increase in provisions of Qatar and Saudi-based banks. Commercial Bank of Qatar’s provisions for impaired loans grew by a whopping 163.8 percent YoY due to provisions taken against emerging market emerging market strategic equity investments. Qatar National Bank registered a 60 percent YoY rise in provisions due to growth in its overall loan portfolio. The Peninsula