Qatar’s banking sector has continued to demonstrate resilience. Banks in Qatar have delivered strong performance during the first quarter of this year as their net profit has gone up.
Qatar’s banking sector total assets have increased by 0.8 percent Month-on-Month in March 2022 to reach QR1.832 trillion, according to a report by QNB Financial Services. The banking sector’s Total Loan Book increased by 0.4 percent and deposits went up by 0.3 percent in the month of March 2022.
According to the report, the Private and Public sector pushed the credit higher (up 0.4 percent and 0.6 percent respectively MoM in March). As deposits went up by 0.3 percent in March, the LDR went slightly up to 125.6 percent vs. 125.5 percent in February 2022. Public sector deposits went up by 4.2 percent for the month of March 2022 resulting in the overall gain in deposits. Looking at segment details, the government segment increased by 12 percent, while the semi-government institutions’ segment moved up by 4.9 percent.
This impressive performance illustrates that Qatari banks implemented prudent measures to cut their costs and increase their efficiency. The banks have played a crucial role in the economic growth of Qatar by supporting the private sector. At the time when private companies and entrepreneurs were struggling last year due to the outbreak of coronavirus pandemic, the banks helped them by giving loans. The financial provided by the banks to the private sector proved immensely important in the strong recovery of businesses. The financial support provided to the companies helped them to continue their operation during pandemic outbreak.
According to a report released by KPMG, Banks placed greater emphasis on the ‘environmental’ and ‘social’ aspects of ESG, while continuing to promote good ‘Governance’. Qatar’s listed banks had the highest sector average for ROE (13.7 percent) versus a GCC average of 11.3 percent.
Qatar’s listed banks were the clear leaders amongst their GCC peers in terms of their cost-to-income ratios (23.3 percent), versus a GCC average of 41.1 percent, demonstrating the success of tight cost control measures across the sector. The Non-performing loan coverage ratio was also highest amongst the GCC banks (92.0 percent) versus a GCC average of 66 percent.
Qatari banks have made strong comeback after a difficult year courtesy of proactive balance sheet management backed by effective government support. Going forward, the banks are expected to witness strong growth as Qatar’s economy is undergoing a strong economic recovery.
