Qatar - Credit facilities extended by local banks increased by 1.9% during January to reach QR1,372.5bn. Loans rise in January was mainly due to a jump by 5.3% in the public sector, according to QNB Financial Services.

Qatar’s banking sector kicked off the year on a “positive note” with loan book and deposits making good gains in January, according to QNB Financial Services (QNBFS).

Credit facilities extended by local banks increased by 1.9% during January to reach QR1,372.5bn. The loans rise in January was mainly due to a jump by 5.3% in the public sector.

Loans went up by 4.6% in 2024, compared to a growth of 2.5% in 2023, growing by an average 5.4% over the past five years (2020-2024)

Loan provisions to gross loans was marginally lower at 3.8% in January, compared to 3.9% in December 2024.

Deposits went up by 1.3% during January to reach QR1,040.0bn.

The deposits gain in January 2025 was mainly due to a surge by 1.5% in private sector deposits and a rise by 1% in public sector deposits.

Deposits increased 4.1% in 2024, compared to a decline by 1.3% in 2023, growing by an average 3.9% over the past five years (2020-2024).

Total assets edged lower by 0.3% during January to QR2.040tn, QNBFS data reveal.

The total assets slide in January was mainly due to a decline by 2.3% in foreign assets and a 8.4% drop in reserves.

Total assets gained by 3.9% in 2024, compared to a growth of 3.4% in 2023; assets grew by an average 5.7% over the past five years (2020-2024).

Liquid assets to total assets moved lower to 30.2% in January, compared to 31.3% in December 2024, which still remains in a healthy position.

Loan provisions to gross loans edged lower to 3.8% in January, compared to 3.9% in December 2024.

Loan provisions have increased from 2.3% in 2019 to 3.9% in 2024 and 3.8% (as at January) as banks have been provisioning for Stage 2 and Stage 3 loans mainly emanating from contracting and real estate sectors.

The overall loan book gained (by 1.9%) in January, pushed higher mainly by public sector loans, QNBFS noted.

Total public sector loans rose by 5.3% MoM (+5.0% in 2024) in January. The government segment (represents 31% of public sector loans) was the main driver for the public sector gain with a jump by 13.3% (+3.6% in 2024), while the government institutions’ segment (represents 65% of public sector loans) moved up by 2.2% MoM (+7.7% in 2024).

However, the semi-government institutions segment was marginally lower by 0.2% MoM (-18.0% in 2024) during January, QNBFS noted.

According to an analyst “2025 has started on a positive note as both the loan book and deposits made good gains during January.”

“The 1.9% rise in the overall loan book in January 2025 came mainly from the public sector as government credit facilities jumped by 13.3%, driven by government overdraft facilities shooting up by 26.5% in January and gives indication of increased government spending needs. The overall deposits growth of 1.3% at the start of 2025 has come in from all three main sectors, namely private sector, public sector and non-residents,” the analyst told Gulf Times.

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Pratap John