DOHA: Loan growth has outpaced deposit growth in Qatar during the month of June 2014. After posting a growth of 0.4 percent month-on-month in May 2014, loans grew by 1.9 percent month-on-month in June 2014 primarily due to pick-up in credit off-take from the international and private segments.
QNB Financial Services (QNBFS) monthly banking sector update yesterday noted deposits continued with its healthy growth of 1 percent month-on-month and are up 7.8 percent year-to-date (YTD) vs. a 6.1 percent growth in the loan book.
Hence, the banking sector’s loans-to-deposits ratio (LDR) rested at 104 percent at the end of June 2014 vs.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”, QNBFS analysts noted.
The public sector led deposit growth for the month of June and its deposits climbed up by 2.8 percent month-on-month.
Delving into segment details, the government institutions’ segment (represents 52 percent of public sector deposits) receded by 0.6 percent month-on-month.
On the other hand, the semi-government institutions’ segment posted a growth of 9.7 percent. Moreover, the government segment increased by 6 percent. Private sector deposits exhibited a flat performance.
On the private sector front, the companies and institutions’ segment declined by 1.3 percent while the consumer segment gained by 1.6 percent .
The overall loan book grew by 1.9 percent month-on-month after a flattish display in May 2014. International credit was the primary driver of the month-on-month growth, increasing by 10.1 percent month-on-month.
Total domestic public sector loans inched up by 0.9 percent. The government segment’s loan book declined by 1.1 percent month-on-month.
Moreover, the government institutions’ segment (represents ~60 percent of public sector loans) declined by 2.5 percent month-on-month and is down 5.4 percent YTD. However, the semi-government institutions’ segment expanded by 23.2 percent month-on-month.
Private sector loans gained by 1.3 percent MoM and are up 7.0 percent YTD. The Services segment posted a 4.2 percent growth MoM and is the best performing segment in the private sector, posting a growth of 18.3 percent in the first six months of 2014.
The General Trade segment (contributes ~12 percent to private sector loans) loan book increased by 2.3 percent MoM . Furthermore, Consumption & Others (contributes ~30 percent to private sector loans) increased by 2.8 percent MoM. However, the Real Estate segment (contributes ~27 percent to private sector loans) regressed by 2.8 percent MoM.
The Peninsula
