Posted on January 19, 2015

Review and Outlook

The loan book increased by 4.9% MoM (up 13.1% YoY in 2014) while deposits inched up by 0.3% MoM (+9.6% YoY in 2014) in the month of December 2014. Private sector pushed total credit growth up 4.2% MoM (up 20.4% YoY for 2014). Moreover, deposits gained by 0.3% MoM taking the overall 2014 growth to 9.6%. Thus, the LDR grew to 109% vs. 105% at the end of 2013.

QNBFS monthly banking sector 2 [].jpgThe public sector deposits decreased by 6.8% MoM (down 0.9% in 2014) for the month of December 2014. Delving into segment details, the government institutions’ segment (represents ~57% of public sector deposits) declined by 8.1% MoM (+4.2% in 2014). Moreover, the semi-government institutions’ segment posted a modest decline of 0.9% MoM (up 4.8% in 2014). Furthermore, the government segment decreased by 7.6% MoM (down 13.2% in 2014). On the other hand, private sector deposits increased by 4.1% MoM (+14.1% in 2014). On the private sector front, the companies & institutions’ segment increased by 7.3% MoM (+17.1% in 2014) while the consumer segment posted a modest growth of 1.1% MoM (up 11.3% in 2014). Non-resident deposits grew by 13.1% MoM (+43.3% in 2014).

The overall loan book posted a strong performance. Total domestic public sector loans increased by 5.8% MoM (still down 2.6% in 2014). The government segment’s loan book went up by 26.2% MoM (reversed its downward trend and posted a 14.5% increase in 2014). Moreover, the government institutions’ segment (represents ~60% of public sector loans) grew by 5.6% MoM and is still down 7.9% in 2014. However, the semi-government institutions’ segment declined by 22.1% MoM (down 7.4% in 2014). Hence, the government and government institutions pushed the overall loan book up for the month of December 2014.

QNBFS monthly banking sector 3 [].jpgPrivate sector loans gained by 4.2% MoM and are up 20.4% in 2014. Real Estate followed by Consumption & Others and Services positively contributed toward the loan growth. Real Estate (contributes ~27% to private sector loans) increased by 5.9% MoM. Consumption & Others (contributes ~29% to private sector loans) increased by 4.1% MoM. Services (contributes ~21% to private sector loans) increased by 5.0% MoM.

Overall for 2014, Consumption & Others followed by General Trade and Services were the biggest contributors to the loan book growth. Consumption & Others increased by 22.2% in 2014. General Trade grew by 34.0% in 2014. Services segment grew by 21.3% in 2014. On the other hand, the Industry segment only witnessed a 5.7% YoY increase in 2014.