Public sector pulls down Qatar banks’ November credit growth

21/12/2014 06:20 AST

Pulled down by the public sector, the local banks’ total credit growth declined 0.1% month-on-month (MoM) in November, QNB Financial Services has said in an update.

On the other hand, deposits increased by 1.2% MoM (+9.3% year-to-date - YTD) in November, QNBFS said in its monthly banking sector update.

Public sector pulled total credit growth down (down 2.4% MoM in November), as private sector posted a healthy growth of 1.5% month-on-month.

Moreover, deposits gained by 1.2% month-on-month (deposits were flat MoM in October). Thus, the loans-to-deposit ratio (LDR) declined to 104% in November compared with 105% in October.

The public sector deposits increased by 0.1% MoM (+6.4% YTD) in November.

Delving into segment details, the government institutions segment (representing nearly 58% of public sector deposits) improved by 1.8% MoM (+13.4% YTD). Moreover, the semi-government institutions segment posted a growth of 5.7% MoM (up 5.8% YTD).

However, the government segment decreased by 6.3% MoM (down 6.0% YTD).

Private sector deposits, however, increased by 0.4% MoM (+9.6% YTD). On the private sector front, the companies and institutions segment increased by 1% MoM (+9.1% YTD 2014), while the consumer segment posted a decline of 0.1% MoM (up 10.0% YTD). Non-resident deposits drove the growth MoM (+15.1% MoM and +26.8% YTD).

The overall loan book posted a flat performance. Total domestic public sector loans decreased by 2.4% MoM (down 7.9% YTD). The government segments loan book went down by 10.7% MoM (also down 9.3% YTD 2014).

Moreover, the government institutions segment (representing nearly 60% of public sector loans) declined by 1.1% MoM and is down 12.8% YTD. However, the semi-government institutions segment grew by 6.6% MoM (+18.8% YTD).

Hence, the government and government institutions pulled the overall loan book down for the month of November 2014.

Private sector loans gained by 1.5% MoM and are up 15.5% YTD. General trade followed by services and contractors positively contributed toward the loan growth. On the other hand, the real estate sector pulled credit growth down in the month of November 2014.

General trade (contributing 14% to private sector loans) increased by 4.9% MoM. Services (contributing nearly 18% to private sector loans) increased by 3.4% MoM (+15.6% YTD). Contractors (contributing 9% to private sector loans) increased by 2.1% MoM.

However, the real estate segment (contributing 26% to private sector loans) declined by 0.5% MoM (+5.2% YTD).

Overall, the segments representing general trade (+33.3% YTD) and contractors (+25.6% YTD) are the best performing in the private sector YTD. On the other hand, the Industry segment is flattish YTD, QNBFS said.

Gulf Times