DOHA: Qatari banking sector’s loan-to-deposit ratio (LDR) increased to 107 percent at the end of January 2014 against 105 percent in December 2013.
Growth in loans and deposits improved in January. Loans climbed by 2.3 percent month-over-month (MoM). This is after a strong performance of 13.3 percent YoY for 2013, QNB Financial Services noted in its monthly banking sector update.
Deposits also expanded by one percent MoM. Going forward, the QNB expects activity in the banking sector to pick up with public sector leading the way.
In 2013, some banks issued Tier 1 bonds. The Commercial Bank of Qatar and Doha Bank raised QR2bn each in Tier 1 notes at the end of December 2013. The increased capital has improved their capital adequacy ratios as well as provided additional funds aiding loan book growth in 2014.
Public sector deposits receded by 2.3 percent MoM, while private sector deposits gained by 4.1 percent MoM. Delving into segment details, the government institutions’ segment improved marginally by 0.3 percent against a 6.6 percent decrease in the previous month. However, the government segment declined by 7.4 percent MoM against a 6.6 percent increase in the previous month. The semi-government institutions’ segment followed with a decline of 1.3 percent. On the private sector front, the companies and institutions’ segment expanded by 4.2 percent and the consumer segment expanded up by four percent.
The overall loan book exhibited improved performance in the first month of 2014. Total domestic public sector loans picked up by 1.7 percent after a 0.9 percent MoM growth in December. The government segment’s loan book grew by 4.2 percent. Private sector loans ticked up by 2.6 percent.
The Peninsula
