DOHA: The loan book of banks in Qatar decreased by 2 percent, while deposits declined by 0.3 percent in October 2014, compared to the previous month, the QNB Financial Services (QNBFS) monthly banking sector update noted.
Public sector (down 5.7 percent) was the primary driver of the overall decline in the loan book (public sector loans were up 3.9 percent in September). Moreover, deposits also fell slightly by 0.3 percent in October. Thus, the loan to deposit ratio (LDR) declined to 105 percent as against 107 percent in September.
“Going forward, we expect increased activity in the sector. We continue to expect improvement in the public sector, in addition to large corporate loan growth followed by the SMEs and consumer lending to be the primary drivers of the overall loan book in 2014 and 2015. Our view is based on the expected uptick in project mobilizations in the coming months”.
The public sector deposits decreased by 3.3 percent (+ 6.3 percent year-to-date 2014) for the month of October 2014. Delving into segment details, the government institutions’ segment improved by 0.5 percent (+11.4 percent YTD 2014). Moreover, the semi-government institutions’ segment posted a growth of 10.1 percent (up 0.1 percent YTD 2014). However, the government segment decreased by 15.4 percent month-on-month (+0.3 percent YTD).
On the other hand, private sector deposits increased by 1.0 percent (+9.1 percent YTD 2014). On the private sector front, the companies & institutions’ segment increased by 1.0 percent MoM (+8.1 percent YTD 2014) while the consumer segment posted a growth of 1.1 percent MoM (up 10.1 percent YTD).
The overall loan book declined by 2.0 percent MoM vs. a 4.0 percent growth MoM in September 2014. Total domestic public sector loans decreased by 5.7 percent (also down 5.7 percent YTD). The government segment’s loan book went down by 16.8 percent (up 1.6 percent YTD 2014). Moreover, the government institutions’ segment declined by 1.5 percent and is down 11.8 percent YTD.
Furthermore, the semi-government institutions’ segment declined by 0.5 percent (+11.4 percent YTD). Hence, all the three public sector segments pulled the overall loan book down for the month of October 2014. Private sector loans gained by 0.3 percent and are up 13.8 percent YTD.
Consumption & others increased by 0.9 percent (+16.9 percent YTD). The Real Estate segment grew by 2.1 percent (+5.7 percent YTD). However, the Services segment posted a decline of 7.2 percent but is still up 11.8 percent in the first ten months of 2014.
Overall, the segments representing general trade (+27.1 percent YTD) and contractors (+23.0 percent YTD) are the best performing segments in the private sector YTD. On the other hand, the industry segment is flat YTD.
The Peninsula
