Private sector drives Qatar bank loan growth to QR1.22tn in October: QNBFS

Driven by the private sector, Qatari banking sector saw overall loans increasing by 0.4% to QR1.22tn in October, QNB Financial Services (QNBFS) has said in a report.Loans have edged up by 0.2% so far in 2022, compared to a growth of 7.8% in 2021. Loans grew by an average 7.6% over the past five years (2017-2021), QNBFS said Tuesday.Deposits declined by 1.1% during October 2022 to QR954.2bn, due to a drop both in non-resident and public sector deposits.Deposits have gone down by 2% so far in 2022, compared to a growth of 7.6% in 2021. Deposits grew by an average 6.1% over the past five years (2017-2021), the report said.Qatar banking sector's total assets edged down by 0.4% MoM (up 0.1% in 2022) in October to QR1.83tn, QNBFS said.Loans to deposits ratio went up during the month to 127.8% (as at October).Total private sector loans moved up by 0.7% MoM (+4.4% in 2022) in October. The services segment and real estate were the main contributors toward the private sector loan growth for October.Services (contributes nearly 29% to private sector loans) increased by 2.2% MoM (+7.7% in 2022). The real estate segment (contributes nearly 21% to private sector loans) went up by 0.8% MoM (+6.6% in 2022).Consumption and others (contributes nearly 21% to private sector loans) gained 0.4% MoM (+4.9% in 2022), while general trade (contributes nearly 20% to private sector loans) declined by 1.2% MoM (-0.1% in 2022) during October.Outside Qatar loans went up by 1.4% MoM (-7.7% in 2022) during October.Domestic public sector loans went down slightly by 0.2% MoM (-6.7% in 2022). The government segment (represents nearly 30% of public sector loans) fell by 1.5% MoM (-24.8% in 2022).However, the government institutions segment's (represents nearly 64% of public sector loans) loan book increased by 0.4% MoM (+4.3% in 2022), while the semi-government institutions’ segment moved up marginally by 0.1% MoM (+2.3% in 2022).Non-resident deposits continued its steep decline for the year and fell by 5% MoM (-31.1% in 2022) in October, thereby leading the decliners in the overall drop in the banking sector deposits for the month, QNBFS said.Public sector deposits declined by 2.1% MoM (+10.1% in 2022) for October.Looking at segment details, the semi-government institutions’ segment had a huge drop by 19.4% MoM (+10.5% in 2022), while the government segment (represents nearly 25% of public sector deposits) declined by 7.5% MoM (-20.0% in 2022).However, the government institutions segment (represents nearly 62% of public sector deposits) increased by 5% MoM (+29.8% in 2022).Private sector deposits moved higher by 1.5% MoM (+9.4% in 2022). On the private sector front, companies and institutions’ segment gained 3.5% MoM (+18.3% in 2022).Meanwhile, the consumer segment went down by 0.4% MoM (+1.9% in 2022) during October.An analyst told Gulf Times yesterday the overall increase in loans by 0.4%, which is mainly coming from a 0.7% growth in the private sector, specifically from the services and real estate sectors, could be attributed to the sectors requirement in the build up to the FIFA World Cup Qatar 2022."Overall decline in the deposits by 1.1% was mainly due to the 5% drop in non-resident deposits. With higher oil and gas prices and improved local liquidity situation, there is less reliance on non-resident deposits and optimisation in funding sources for banks,” the analyst noted.