Posted on May 23, 2015

Review and Outlook

The loan book decreased by 0.5% MoM (+2.9 YTD) after growing by 3.2% MoM in March 2015 (gaining by 1.7% MoM in February 2015). Deposits followed suit and dipped by 0.2% MoM (+3.1 YTD) in the month of April 2015. Public sector pulled down total credit growth with a decline of 4.7% MoM (down 5.9% YTD). Moreover, public sector deposits receded by 4.8% MoM (down 4.5% YTD). Thus, the LDR remained at 109% vs. 109% at the end of March.

The public sector deposits dropped by 4.8% MoM for the month of April 2015 vs. a decent growth of 1.3% MoM in March. Delving into segment details, the government institutions’ segment (represents ~57% of public sector deposits) declined by 8.3% MoM (down 4.4% YTD). Moreover, the government segment receded by 6.9% MoM (down 4.5% YTD) after surging by 50.1% MoM in March (dropping by 11.4% and 22.9% in February and January 2015, respectively). On the other hand, the semi-government institutions’ segment posted strong performance, expanding by 13.6% MoM (down 4.9% YTD). On the Private sector front, the companies & institutions’ segment climbed up by 1.1% MoM (down 1.3% YTD). The consumer segment followed suit and ticked up by 0.8% MoM (+5.7% YTD). Non-resident deposits grew by 10.7% MoM (+45.5% YTD). 

QNB Financial Services monthly 2 [].jpgThe overall loan book reversed its growth trajectory and declined MoM. Total domestic public sector loans decreased by 4.7% MoM (down 5.9% YTD) vs. a robust growth of 4.7% MoM in March 2015. The government segment’s loan book contracted by 23.5% MoM (+5.7% YTD) vs. a robust growth of 23.7% in March. On the other hand the government institutions’ segment (represents ~64% of public sector loans) exhibited healthy performance (+2.8% MoM) after exhibiting flat performance in March (+0.4% YTD). Furthermore, semi-government institutions’ segment expanded by 6.1% MoM (down 7.0% YTD). Hence, the government sub-segment pulled the overall loan book down for the month of April 2015.

Private sector loans grew by 1.9% MoM (+6.7% YTD) vs. +3.1% MoM in March 2015. The Consumption & Others followed by General Trade positively contributed toward the loan growth. Loans to the Consumption & Others segment (contributes ~31% to private sector loans) expanded by 4.0% MoM (+11.8% YTD) while General Trade increased by 5.0% MoM (+8.8% YTD). Moreover, the Real Estate (contributes ~25% to private sector loans)  and Contractors segments increased by 1.1% MoM (+0.2% YTD) and 1.0% MoM (+7.3% YTD), respectively. On the other hand, Services (contributes ~18% to private sector loans) dipped by 2.2% MoM (+5.4% YTD).QNB Financial Services monthly 3 [].jpg