Public sector loans drive Qatar banks’ credit growth in July: QNBFS

Credit facilities extended by banks in Qatar increased by 0.9% during July to reach QR1,336.4bn, according to QNB Financial Services (QNBFS). Loans’ gain in July was mainly due to a rise by 1.9% in the public sector and 0.5% in the private sector, QNBFS said in its latest ‘Qatar Monthly Key Banking Indicators’.Loans went up by 3.8% 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), it said. Loan provisions to gross loans stood at 4.0% in July, compared to 4.1% in June this year.Total public sector loans went up by 1.9% MoM (+5.8% in 2024) in July 2024. The government institutions’ segment (represents 66% of public sector loans) was the main driver for the public sector, with an increase by 2.2% MoM (+7.0% in 2024), while the government segment (represents 29% of public sector loans) moved up by 1.3% MoM (+5.9% in 2024) and the semi-government institutions segment pushed up by 0.7% MoM (-8.5% in 2024) in July.The real estate sector was the main driver for the rise in private sector loans in July. The real estate segment (contributes 21% to private sector loans) went up by 1.9% MoM (+6.3% in 2024), while general trade (contributes 22% to private sector loans) moved up by 0.5% MoM (+3.5% in 2024).Deposits with commercial banks in Qatar edged up 0.1% during July to reach QR1,032.6bn.Deposits rise in July was mainly due to an increase by 1.3% in non-resident deposits.Deposits increased 4.7% in 2024, compared to a decline by 1.3% in 2023. Deposits grew by an average 4.1% over the past five years (2019-2023), QNBFS noted.Non-resident deposits pushed overall deposits higher during the month of July, with a gain by 1.3% MoM (+11.4% in 2024).Public sector deposits edged lower by 0.2% MoM (+6.9% in 2024) in July 2024. Looking at segment details, the government institutions’ segment (represents 56% of public sector deposits) dropped by 0.9% MoM (+5.5% in 2024), while the semi-government institutions’ segment fell by 3.0% MoM (-16.5% in 2024).However, the government segment (represents 32% of public sector deposits) increased by 2.2% MoM (+22.5% in 2024) in July 2024. Private sector deposits moved lower by 0.2% MoM (+0.6% in 2024) in July 2024. On the private sector front, the companies & institutions’ declined by 1.3% MoM (-5.5% in 2024).However, the consumer segment went up by 0.6% MoM (+5.9% in 2024).Loans to deposits ratio for commercial banks in Qatar went up to 129.4% in July, QNBFS noted. Total assets of commercial banks in Qatar declined by 0.6% during July 2024 to QR1.987tn, QNBFS said. Total assets drop in July was mainly due to a fall by 5.2% in foreign assets.Total assets was up by 0.9% 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), QNBFS said.Liquid assets to total assets went down to 29.9% in July, compared to 30.7% in June."The key highlights for July is the decline in total assets by 0.6%, which went down mainly due to the drop in foreign assets as due from banks abroad dipped 11.7% during that month,” an analyst told Gulf Times.The analyst said, "The 0.9% increase in the overall loan book came from a 2.2% gain from the government institutions in the public sector and from a resurgence by 1.9% from the real estate segment in the private sector."On the deposits side, non-resident deposits maintained an upsurge in July rising by 1.3%.”