Doha: The total assets of Qatar’s banking sector have risen by 0.9 percent year-to-date (YTD in July 2024 to QR 1.987 trillion, according to the latest data released by QNB Financial Services (QNBFS). The total assets, however, declined by 0.6 percent month-on-month (MoM), reflecting a resilient but cautious growth trajectory amid global economic uncertainties.

The sector’s loan book showed a strong performance, growing by 0.9 percent MoM in July 2024, which translates to a 3.8 percent increase YTD. In contrast, deposits saw a marginal rise of 0.1 percent MoM, bringing the total YTD growth in deposits to 4.7 percent. The loan-to-deposit ratio (LDR) climbed to 129.4 percent from 128.4 percent in June 2024, as loans outpaced deposit growth duringthe month.

The overall increase in the loan book was primarily driven by the public sector, with total public sector loans rising by 1.9 percent MoM and 5.8 percent YTD. Government institutions, which make up around 66 percent of public sector loans, led the growth with a 2.2 percent increase MoM and 7 percent rise YTD.

The government segment, representing about 29 percent of public sector loans, saw a 1.3 percent MoM increase, adding up to a 5.9 percent gain YTD. Meanwhile, loans to semi-government institutions ticked up by 0.7 percent MoM but have dropped by 8.5 percent YTD, reflecting volatility in this segment.

Private sector loans increased by 0.5 percent MoM and 2.4 percent YTD in July 2024, mainly driven by the real estate sector. The real estate segment, which accounts for approximately 21 percent of private sector loans, rose by 1.9 percent MoM and 6.3 percent YTD.

General trade loans, contributing around 22 percent to the private sector, went up by 0.5 percent MoM and 3.5 percent YTD. However, the services sector, the largest at 32 percent of private sector loans, edged down by 0.1 percent MoM but still managed a 3.6 percent increase YTD.

Loans for consumption and others, comprising 20 percent of private sector loans, experienced a slight monthly decline and a 3.3 percent reduction YTD.

Outside Qatar, loans decreased by 0.4 percent MoM but posted a significant 12.5 percent growth YTD, reflecting expanding international exposure.

Non-resident deposits were a key support for overall deposit growth, increasing by 1.3 percent MoM and 11.4 percent YTD in July 2024. Public sector deposits, however, edged lower by 0.2 percent MoM but showed a solid 6.9 percent YTD growth.

Within this category, deposits from government institutions—accounting for 56 percent of public sector deposits—dropped by 0.9 percent MoM but rose 5.5 percent YTD. Semi-government deposits fell sharply by 3 percent MoM and 16.5 percent YTD, while government deposits increased by 2.2 percent MoM and 22.5 percent YTD.

Private sector deposits dipped by 0.2 percent MoM but were up slightly by 0.6 percent YTD. While company and institutional deposits fell by 1.3 percent MoM and 5.5 percent YTD, consumer deposits grew by 0.6 percent MoM and 5.9 percent YTD.

The sector’s Loan Provisions to Gross Loans ratio slightly improved, dropping to 4 percent in July 2024 from 4.1 percent in June 2024, suggesting reduced pressure on banks to set aside funds for bad loans.

However, the liquid assets to total assets ratio decreased to 29.9 percent in July 2024 from 30.7 percent in the previous month, indicating tightening liquidity conditions.

Despite a decline in total assets and some volatility in deposits, the robust growth in loans, particularly within the public sector, underscores the banking sector’s ability to navigate through economic challenges.

The sector’s cautious optimism is tempered by tighter liquidity, as banks continue to balance loan growth with the availability of deposits.

© Copyright Qatar Tribune. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).