DOHA: The loan growth of banks in Qatar outpaced deposit growth in May. After posting a growth of 0.6 percent month-on-month (MoM) in April, loans grew by 0.4 percent MoM in May primarily due to pick-up in credit off-take from the international segment.
Moreover, deposits continued with its gradual growth (+0.2 percent MoM) and are up 6.8 percent year-to-date (YTD) against a 4.2 percent growth in the loan book. Hence, the banking sector’s loans-to-deposits ratio (LDR) rested at 103 percent at the end of May 2014 against 105 percent at the end of 2013. “Going forward, we expect the public sector, in addition to large corporate loan growth to be the primary drivers of the overall loan book in 2014 followed by the SMEs and consumer lending. Our view is based on the expected uptick in project mobilisations in the coming months,” QNB Financial Services said in its monthly banking sector update yesterday.
The private sector led deposit growth for May. Public sector deposits declined by 0.9 percent MoM (+2.4 percent YTD). The government institutions segment grew by 0.1 percent MoM (+2.7 percent YTD). The semi-government institutions posted a growth of 3.9 percent MoM (down 25.6 percent YTD). The government segment decreased by 4.1 percent MoM (+17.1 percent YTD). Private sector deposits gained by another 0.3 percent MoM (+10.8 percent YTD 2014). On the private sector front, the companies and institutions’ segment grew by 1.5 percent MoM (+12.1 percent YTD 2014), while the consumer segment dipped by 0.8 percent MoM (+9.7 percent YTD 2014).
The overall loan book’s performance improved by 0.4 percent MoM in May. International credit was the primary driver of the MoM growth, increasing by 12.2 percent MoM (+22.1 percent YTD 2014). Total domestic public sector loans declined by 2.1 percent MoM and are down 0.8 percent YTD. The government segment’s loan book declined by 7.8 percent MoM (+9.4 percent YTD 2014). Furthermore, semi-government institutions’ segment declined by 3.6 percent MoM and is now down 8.4 percent YTD.