DOHA: The loan book of banks in Qatar fell by one percent month-on-month (MoM) while deposits declined by 2.7 percent in the month of July 2014. After posting a growth of 1.9 percent MoM in June 2014, primarily due to pick-up in credit off-take from the international and private segments, loans fell by 1.0 percent with public sector declining by 4.4 percent MoM.
On the other hand, deposits also declined by 2.7 percent with public sector deposits declining by 3.8 percent MoM. Thus, the LDR climbed to 106 percent vs 104 percent in June. “Going forward, post the summer lull, we expect increased activity in the sector. We expect improvement in 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 monthly banking sector update noted yesterday.
The public sector led the decline in deposits for the month of July 2014. Public sector deposits fell by 3.8 percent MoM. Delving into segment details, the government institutions’ segment improved by 0.2 percent MoM and is up 2.2 percent YTD 2014. On the other hand, the semi-government institutions’ segment posted a decline of 6.5 percent MoM and down 23.7 percent YTD. Moreover, the government segment decreased by 8.7 percent MoM .
Private sector deposits declined by 1.8 percent MoM, and is up by 9.0 percent YTD 2014. On the private sector front, the companies & institutions’ segment declined by 2.1 percent MoM while the consumer segment receded by 1.5 percent MoM.
The overall loan book declined by 1.0 percent MoM after a growth of 1.9 percent MoM in June 2014. International credit, the primary driver of the MoM growth in June, increased by 1.1 percent MoM. Total domestic public sector loans declined by 4.4 percent MoM and is down 4.2 percent YTD. The government segment’s loan book declined by 9.3 percent MoM and is down by 1.8 percent YTD 2014.
Moreover, the government institutions’ segment declined by 3.8 percent MoM and is down 9.0 pecent YTD. However, the semi-government institutions’ segment expanded by 2.2 percent MoM . Private sector loans gained by 1.1 percent MoM and are up 8.2 percent YTD. Consumption & Others increased by 3.8 percent MoM. Furthermore, the Real Estate segment grew by 1.2 percent MoM .
However, the Services segment posted a decline of 3.7 percent MoM and is up 13.8 percent in the first seven months of 2014. Overall, Contractors and Services segments are the best performing segments in the private sector YTD.