Satyendra Pathak
doha
The Qatar banking sector marked a significant milestone in August with total assets increasing by 0.7 percent month-on-month (MoM) and 1.7 percent year-to-date (YTD), reaching QR2.002 trillion for the first time, according to a report released by QNB Financial Services (QNBFS) onMonday.
This steady growth reflects the continued resilience and expansion of the financial system in the country.
The sector’s loan book expanded by 0.5 percent MoM, translating into a 4.3 percent rise in 2024. This increase in loans outpaced the rise in deposits, which grew by 0.3 percent MoM (up 5 percent in 2024), pushing the loan-to-deposit ratio (LDR) up to 129.7 percent from 129.4 percent in July 2024.
Private sector loans were a key driver of the overall loan book expansion, growing by 0.4 percent MoM and 2.8 percent YTD in August 2024. The Real Estate sector, contributing approximately 21 percent to private sector loans, showed the most robust performance, rising by 2.1 percent MoM and 8.5 percent YTD.
The consumption and others segment, which also contributes 20 percent to private sector loans, increased by 0.7 percent MoM but saw a decline of 2.6 percent YTD. General Trade and Services sectors, each contributing 21 percent and 32 percent respectively to private sector loans, experienced marginal changes in August, with General Trade down 0.2 percent MoM (+3.3 percent YTD) and services slightly lower MoM but up 3.6percent YTD.
The public sector loan book witnessed a 0.5 percent MoM rise, resulting in a 6.3 percent YTD increase by the end of August. Within the public sector, government loans, which account for 29 percent of the segment, saw a 1.7 percent MoM increase (+7.7 percent YTD).
Semi-government institutions loans grew by 2.6 percent MoM, despite a 6.1 percent drop YTD. Government institutions, representing 65 percent of public sector loans, edged lower by 0.1 percent MoM but were still up 6.9 percent YTD.
In contrast, public sector deposits increased by 1.9 percent MoM and 8.9 percent YTD, driven mainly by the government segment, which surged by 7.1 percent MoM (+31.1 percent YTD).
The government institutions’ segment, contributing 55 percent of public sector deposits, rose by 1 percent MoM (+6.5 percent YTD), while deposits from semi-government institutions fell by 7.8 percent MoM (-23 percent YTD).
Loans outside Qatar also saw a significant rise, up by 1 percent MoM and 13.6 percent YTD. Non-resident deposits, however, declined by 2.1 percent MoM but remained up 9.1 percent YTD as of August 2024.
Private sector deposits saw a slight decline of 0.1 percent MoM, although they were up 0.5 percent YTD. Within this category, deposits from companies and institutions decreased by 0.4 percent MoM (-5.9 percent YTD), while consumer deposits edged up by 0.2 percent MoM(+6.1 percent YTD).
The banking sector’s liquid assets as a proportion of total assets decreased slightly to 29.7 percent in August, from 29.9 percent in July 2024, indicating a marginal tightening in liquidity. The sector’s loan provisions to gross loans remained steady at 4 percent in both August and July 2024.
The latest figures reflect the overall stability and robust growth of Qatar’s banking sector, with ongoing strength in both public and private sector lending, particularly in real estate and government borrowing. The rise in total assets to a record QR2.002 trillion underscores the continued confidence in Qatar’s financial institutions.
