Posted on August 21, 2014

The loan book fell by 1.0% MoM (up 5.0%YTD) while deposits declined by 2.7% MoM (+4.9% YTD) in the month of July 2014. After posting a growth of 1.9% MoM in June 2014 (primarily due to pick-up in credit off-take from the international and private segments), loans fell by 1.0% MoM with public sector declining by 4.4% MoM.

On the other hand, deposits also declined by 2.7% with public sector deposits declining by 3.8% MoM. Thus, the LDR climbed to 106% vs. 104% in June. Going forward, post the summer lull, we expect increased activity in the sector. We expect improvement in the public sector, in addition to large corporate loan growth to be the primary drivers of the overall loan book in 2014 followed by the SMEs and consumer lending. Our view is based on the expected uptick in project mobilizations in the coming months.

QNBFS monthly banking sector 1 [qatarisbooming.com].JPG

The public sector led the decline in deposits for the month of July 2014. Public sector deposits fell by 3.8% MoM (+1.3% YTD 2014). Delving into segment details, the government institutions’ segment (represents ~55% of public sector deposits) improved by 0.2% MoM (+2.2% YTD 2014). On the other hand, the semi-government institutions’ segment posted a decline of 6.5% MoM (down 23.7% YTD 2014). Moreover, the government segment  decreased by 8.7% MoM (+13.2% YTD). Private sector deposits declined by 1.8% MoM (+9.0% YTD 2014). On the private sector front, the companies & institutions’ segment declined by 2.1% MoM (+8.3% YTD 2014) while the consumer segment receded by 1.5% MoM (+9.7% YTD 2014).

The overall loan book declined by 1.0% MoM after a growth of 1.9% MoM in June 2014. International credit, the primary driver of the MoM growth in June, increased by 1.1% MoM (+35.8% YTD 2014). Total domestic public sector loans declined by 4.4% MoM and is down 4.2% YTD. The government segment’s loan book declined by 9.3% MoM (down 1.8% YTD 2014). Moreover, the government institutions’ segment (represents ~60% of public sector loans) declined by 3.8% MoM and is down 9.0% YTD. However, the semi-government institutions’ segment expanded by 2.2% MoM (+15.3% YTD). Private sector loans gained by 1.1% MoM and are up 8.2% YTD.

QNBFS monthly banking sector 2 [qatarisbooming.com].JPG

Consumption & Others (contributes ~30% to private sector loans) increased by 3.8% MoM (+11.6% YTD). Furthermore, the Real Estate segment (contributes ~27% to private sector loans) grew by 1.2% MoM (+0.5% YTD). However, the Services segment posted a decline of 3.7% MoM and is up 13.8% in the first seven months of 2014. Overall, Contractors (+14.6% YTD) and Services (+13.8% YTD) segments are the best performing segments in the private sector YTD.

QNBFS monthly banking sector 3 [qatarisbooming.com].JPG

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