DOHA: The real estate sector loan book in Qatar has touched a whopping QR80bn at the end of the first half of 2013. The country’s contract financing sector loan book has reached QR19bn during the period, said a lead banker.
“The Qatari contract financing sector has been growing steadily at the compound annual growth rate (CAGR) of 27 percent in 2005-2012 and is set to benefit hugely from the World Cup-related infrastructure spending”, the latest issue of the “Banker” magazine quoted Doha Bank Group CEO DR R Seetharaman as saying.
The magazine that features Dr Seetharaman on the cover noted that Doha Bank had a market share of 8.9 percent of the total real estate sector loan book in Qatar. The loans portfolio is approximately 90 percent completed real estate projects vs. 10 percent Greenfield or underconstruction. The bank has a 29.8 percent market share in the contract financing.
Dr Seetharaman said the second phase of Doha Bank’s capital increase will lift real estate lender limits and in general allow for an expansion of the loan book in Qatar and the GCC with a further strengthened capital position. The bank will also consolidate its position in Qatar and penetrate further in the GCC markets. The bank will continue to tap opportunities in contract finance, SME and trade finance across the GCC region.
Meanwhile, QNB’s latest ‘Qatar Economic Insight’ noted Non-hydrocarbon projects account for a growing share of current project budgets .Infrastructure projects in construction and transport currently account for the largest share of project spending. Construction and transport projects make up 81.7 percent of projects currently underway. While oil and gas accounted for most project spending during 2000-11, they now only account for 6.8 percent. The bulk of project budgets in construction are for mixed-use real estate developments. Transport spending includes a range of road, rail, sea and air projects.
QNB analysts noted credit facilities to the public sector account for the largest portion of overall loans. Overall credit facilities increased 26 percent in 2012 and a further 4.7 percent in the first six months of 2013 to $146bn. However, lending growth to the public sector has slowed from 47 percent in 2012 to an annualized rate of four percent in the first six months of 2013, as the government has recently relied more heavily on its own resources to finance infrastructure projects.
The Peninsula
