Qatar banking sector sees uptick in assets, loans and deposits in August: QNBFS

Qatar banking sector has seen an uptick in its assets, loans and deposits in August, driven mainly by government activities and commodity prices.According to QNB Financial Services, the total assets of the Qatari banking sector increased by 0.7% MoM (0.1% in 2022) in August 2022 to reach QR1.828tn. The sector total loan book went up by 0.6% MoM (0.2% in 2022) and deposits rose by 0.9% MoM (-0.1% in 2022) in August, QNBFS noted.Loans increased by 0.6% during August to reach QR1,218.6bn.The public sector mainly pushed the credit higher (up 1.7% MoM in August). Loans have moved up by 0.2% 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. As deposits gained by 0.9% in August, the LDR declined slightly to 125.2% compared with 125.5% in July. Public sector deposits increased by 3.7% MoM (+14% in 2022) in August, resulting in the overall gains in the Qatar banking sector deposits.Deposits moved up by 0.9% during August to reach QR973.2bn.The deposits surge in August was due to an uptick by 3.7% in public sector deposits.QNBFS said deposits have edged marginally lower by 0.1% 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 overall loan book went up by 0.6% in August 2022. Domestic public sector loans moved higher by 1.7% MoM (-4.5% in 2022). The government segment (represents nearly 32% of public sector loans) rose by 3.9% MoM (-18.1% in 2022), while the government institutions’ segment (represents nearly 62% of public sector loans) loan book increased by 1.0% MoM (+3.1% in 2022). However, the semi-government institutions’ segment moved lower by 2.6% MoM (+10.7% in 2022). Total private sector loans edged higher by 0.3% MoM (+3.2% in 2022) in August. The real estate segment and consumption and others mainly contributed toward the private sector loan growth for August. The real estate segment (contributes nearly 21% to private sector loans) moved up by 0.8% MoM (+4.9% in 2022). Consumption and others (contributes nearly 22% to private sector loans) went up by 0.5% MoM (+4.5% in 2022). Services (contributes nearly 29% to private sector loans) edged up by 0.04% MoM (+4.7% in 2022), while general trade (contributes nearly 21% to private sector loans) moved up slightly by 0.05% MoM (+0.6% in 2022) during August.Outside Qatar loans went down by 1.4% MoM (-7.2% in 2022) during August.Public sector deposits increased by 3.7% MoM (+14.0% in 2022) in August, resulting in the overall gains in the Qatar banking sector deposits. Looking at segment details, the government segment (represents 31% of public sector deposits) shot up by 8.4% MoM (+1.9% in 2022), while the government institutions’ segment (represents nearly 54% of public sector deposits) leaped forward by 1.4% MoM (+17.6% in 2022). The semi-government institutions’ segment moved up by 2.8% MoM (+31.8% in 2022). However, private sector deposits edged lower by 0.1% MoM (+7.4% in 2022). On the private sector front, the consumer segment declined by 0.6% MoM (+2.4% in 2022). However, the companies and institutions’ segment went up by 0.3% MoM (+13.3% in 2022). Non-resident deposits continued its downward spiral and went down by 1.3% MoM (-25.3% in 2022) in August.An analyst told Gulf Times the government segment has been the "key driver", in both loans and deposits in August. Government segment rose by 3.9% for the loan book and went up by 8.4% on deposits. "Short-term funding requirements for FIFA World Cup 2022 and infrastructure projects could be the reason for the loan growth, while higher commodity prices leading to increased government revenues could be the reason for the deposits increase. On the private sector front, real estate loans went up by 0.8% and could be attributed to increased housing demand leading up to FIFA World Cup 2022," the analyst noted.