QNBFS monthly banking sector update

The loan book grew by 3.2% Month on Month (MoM) (+3.5 YTD) after growing by 1.7% MoM in February 2015 (receding by 1.4% MoM in January 2015). Deposits followed suit and gained by 3.1% MoM (+3.3 YTD) in the month of March 2015. Public sector drove total credit growth with a gain of 4.6% MoM (down 1.3% YTD). Moreover, public sector deposits ticked up by 1.3% MoM (flattish YTD). Thus, the LDR remained at 109% vs. 109% at the end of February.

The public sector deposits climbed up by 1.3% MoM for the month of March 2015 vs. a robust growth of 5.2% MoM in February. Delving into segment details, the government institutions’ segment (represents ~59% of public sector deposits) declined by 6.6% MoM (+4.2% YTD). Moreover, the semi-government institutions’ segment posted weak performance, contracting by 19.4% MoM (down 16.2% YTD). On the other hand, the government segment surged by 50.1% MoM (+2.6% YTD) after dropping by 11.4% and 22.9% in February and January 2015, respectively. On the Private sector front, the companies & institutions’ segment gained by 2.5% MoM (down 2.4% YTD). The consumer segment followed suit and climbed up by 2.2% MoM (+4.9% YTD). Non-resident deposits grew by 15.5% MoM (+31.4% YTD).

The overall loan book continued its growth trajectory and posted healthy performance. Total domestic public sector loans increased by 4.6% MoM (down 1.3% YTD) vs. a marginal growth of 1.5% MoM in February 2015. The government segment’s loan book expanded by 23.7% MoM (+5.7% YTD). Moreover the government institutions’ segment (represents ~60% of public sector loans) exhibited flattish performance after declining by 2.5% MoM in February (down 2.4% YTD). However, semi-government institutions’ segment declined by 11.9% MoM (down 12.3% YTD). Hence, the government sub-segment pushed the overall loan book up for the month of March 2015.

Private sector loans grew by 3.1% MoM (+4.7% YTD) vs. a flattish performance in February 2015. The Services segment followed by Consumption & Others positively contributed toward the loan growth. Loans to the Services segment expanded by 7.4% MoM (+7.7% YTD) while Consumption and Others (contributes ~31% to private sector loans) increased by 4.3% MoM (+7.4% YTD). On the other hand, Contractors (contributes ~9% to private sector loans) marginally dipped by 0.6% MoM (+6.2% YTD) while Real Estate (contributes ~26% to private sector loans) displayed flat performance MoM (down 0.9% YTD).