Qatar banking sector assets total $510bln in July: QNBFS

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Qatar banking sector total assets declined 2% month-on-month (MoM) and (down 1.9% in 2023) in July to QR1.86tn, QNB Financial Services (QNBFS) has said in a report.

The month also saw a decline in both loans and deposits with banks in Qatar.

Both the public and private sectors pushed the overall credit lower.

As deposits fell by 2.9% in July, the Loans to deposits ratio (LDR) increased to 134.1% compared to 131.5% in June this year.

According to QNBFS, total assets drop in July was mainly due to a fall by 1.3% in domestic assets and 5.1% in foreign assets.

Total assets are down by 1.9% in 2023, compared to a growth of 4.2% in 2022. Assets grew by an average 6.9% over the past five years (2018-2022)

Liquid assets to total assets was at 30.7% in July, compared to 31.1% in June, QNBFS noted.

Loans went down 0.9% during July to QR1.24tn, the report said.

Loans slide in July was mainly due to a decline by 1.9% in the public sector and 0.5% in the private sector.

Loans are lower by 0.9% in 2023, compared to a growth of 3.3% in 2022.

Loans grew by an average 6.7% over the past five years (2018-2022), QNBFS said.

Loan provisions to gross loans stood at 3.8% for both June and July this year.

Total public sector loans dropped by 1.9% MoM (-3.8% in 2023).

The semi-government institutions’ segment fell by 27.7% MoM (-0.2% in 2023), while the government segment (represents 28% of public sector loans) moved lower by 2.9% MoM (-14.1% in 2023).

However, the government institutions’ segment (represents 67% of public sector loans) loan book increased by 1.3% MoM (+1.0% in 2023).

QNBFS report reveal Qatar bank deposits fell by 2.9% during July to QR927.8bn.

Deposits drop in July was mainly due to a fall by 7.1% in public sector deposits.

Deposits have declined by 7.1% in 2023, compared to a growth of 2.6% in 2022.

Deposits grew by an average 4% over the past five years (2018-2022), QNBFS said.

Loans to deposits ratio moved up during the month to 134.1% in July.

Looking at segment details, the government segment (represents 25% of public sector deposits) mainly dragged down the public sector with a fall by 15.5% MoM (-27.2% in 2023), while the government institutions’ segment (represents 58% of public sector deposits) dropped by 5.1% MoM (-10.1% in 2023).

However, the semi-government institutions’ segment moved up by 1% MoM (3.3% in 2023) in July.

An analyst said, “The banking sector deposits dropped significantly by 2.9% in July 2023 and can be attributed in part to the government’s debt redemption plan for both external and domestic debt.

“Government deposits have declined by 27.2% for the year 2023 as at July 2023 and is likely to have been utilised in repaying debt, with the recently released public budget statement for the second quarter 2023 stating that QR12.5bn in redemption of external bonds and loans were made during the second quarter (Q2) of 2023.”