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With the government injecting large amount of cash deep into the country’s banking system, the government and public sector deposits in Qatar banks witnessed a huge jump in August, according to two different sources.
Qatar’s public sector deposits surged QR29bn ($8bn) from July, leaving them up 70 percent year-on-year. The government has now injected huge deposits since the crisis began, lifting its share of total bank deposits to 37 percent from 26 percent, analysts at NBK noted yesterday.
The net effect of these huge injections has been a leap in overall deposit growth to 20 percent year-on-year in August from 12 percent in May. Moreover, the pace of non-government deposit withdrawals has slowed from the earlier months of the crisis, so the financial situation is stabilising. Qatar’s domestic private sector deposits saw a month-on-month rise in August, they said.
According to The Group analysts, the government and public sector deposits reached QR295.4bn in August. While the Government deposits stood at QR101.2bn, the deposits of government institutions reached QR163.8bn.
The semi government institutions’ deposits amounted to QR30.4bn at the end of August, The Group’s Qatar Central Bank (QCB) data reading showed.
The combined credit facilities to the government and public sector increased about QR4.8bn to reach QR334bn in August. While loans to loan to government increased by QR3.3bn to QR172.3bn, loans to governmental institutions touched QR146.2bn, up QR1.1bn compared to the previous month; and loans to the semi-government institutions increased by QR0.4bn to QR15.5bn.
In addition to this, the balance of Qatar’s Government bonds and bills with banks settled at the level of QR128.5bn. The total domestic public debt (government, government institutions, quasi-governmental institutions, bills and bonds) increased QR15.2bn to reach the level of QR457.7bn.
The total domestic private sector deposits at local banks, by the end of August, decreased by QR 2.5bn to reach QR338.4bn by the end of August; yet, it was still higher by about QR0.4bn above its level from a year ago. Total domestic loans and credit facilities provided by banks to the local private sector have increased by QR3.4bn to reach QR453.5bn in August. The credit facilities to the real estate sector stood at QR139.7bn and consumer loans touched QR123bn, while the credit facilities to trade and services sector reached QR63.2bn. The loans to the non-banking sector reached QR17.7bn.
Qatar banks’ investments in securities outside Qatar settled at the level of QR20.2bn in August.
Local banks’ assets at banks outside Qatar decreased by QR13.4bn to reach QR70.5bn. Bank loans to foreign parties decreased QR0.5bn to reach QR94.9bn and banks’ investments in foreign companies increased QR0.2bn to reach the level of QR40.1bn.
In contrast, foreign banks liabilities on banks in Qatar decreased QR10.1bn to reach the level of QR169.8bn. The indebtedness of local banks to foreign parties, in form of bonds and certificates of deposit, increased QR1.1bn and reached QR48.5bn. The balance of foreign deposits at Qatari banks decreased QR8.2bn to QR149bn.
According to The Group, the banking sector’s debt to the outside world has decreased in August by about QR3.4bn, compared to the previous month, to reach QR141.6bn. The banks’ assets (and liabilities) have increased by QR14.9bn in August to reach the level of QR1.31 trillion, reflecting a 12.7 percent or QR148.8bn increase year-on-year.
The banks’ combined profits for the first half of 2017 increased by 1.9 percent to QR10.9bn in for the first half of 2017. The ratio of net profit to average shareholders’ equity in these banks was 7 percent in August compared to 5.7 percent in the corresponding period of the previous year.
The Group analysts noted that the regulatory controls and available banking indicators point to the
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