Domestic credit, investments gains lift Qatar banking sector assets to QR1.975tn in May: QNBFS

Gains in domestic credit and investments remained key drivers of Qatar’s banking sector, whose assets scaled up to QR1.975tn in May, QNB Financial Services (QNBFS) said in its latest report.

Qatar banking sector total assets increased by 0.8% MoM (0.3% in five months up to May), QNBFS noted in its ‘Qatar Monthly Key Banking Indicators’.

The assets gains in May was mainly due to a rise by 0.7% in domestic assets and 2.7% in foreign assets. Total assets were up by 0.3% in 2024, compared to a growth of 3.4% in 2023.

Assets grew by an average 6.8% over the past five years (2019-2023), the report said.

Liquid assets to total assets moved lower to 30.1% in May, compared to 30.3% in April this year, QNBFS said.

According to QNBFS, loans disbursed by banks went up by 0.7% during May to reach QR1,320.2bn. The loans increase in May was mainly due to gains by 0.7% in the private sector and 0.5% in the public sector.

Loans increased by 2.5% in 2024, compared to a growth of 2.5% in 2023.

Loans grew by an average 6.5% over the past five years (2019-2023), QNBFS said and noted loan provisions to gross loans stood at 3.9% in both April and May.

In respect of deposits, QNBFS noted these moved up 0.7% during May to reach QR1,032.2bn.

The deposits increase in May was mainly due to a gain by 2.3% in non-resident deposits and by 0.8% in public sector deposits.

Deposits increased 4.7% in 2024, compared to a decline by 1.3% in 2023, growing by an average 4.1% over the past five years (2019-2023), QNBFS data revealed.

Loans to deposits ratio (LDR) stood at 127.9% as at May. Loans went up by 0.7% in May 2024 to reach QR1,320.2bn, while deposits moved up by 0.7% in May 2024 to reach QR1,032.2bn.

The net interbank position remained negative at QR294bn (as of May), QNBFS said. "Due from banks" totalled QR171.7bn, while "due to banks" totalled QR465.3bn in May.

On the other hand, "due to banks" abroad had reached a high of QR421.4bn in June last year.

On the QNBFS banking indicators, an analyst said, “The key highlights for May are the increase in total assets by 0.8%, which went up by the gains in domestic credit and domestic investments on the domestic assets side and an uptick in due from banks abroad on the foreign assets side.

“The rise of 0.7% in the overall loan book resulted mainly from a 2.5% surge in May from the services segment signifying the buoyant tourism sector in the country. Overall deposits were pushed higher increasingly by non-resident deposits.”