DOHA: Qatar-based banks witnessed the strongest growth in the GCC in terms of total assets during the third quarter of 2015 (Q3, 15). Total assets of GCC banks, covered by Global Research, expanded 7.9 percent year-on-year to $1.2 trillion in Q3, 15. Qatar-based banks’ combined assets grew 11.3 percent YoY, followed by banks in UAE and Saudi Arabia.
Global Research covers the region’s 20 biggest banks including Qatar’s QNB, Commercial Bank of Qatar and Doha Bank.
Expansion in asset was mainly supported by growth in loan book. Among the individual banks in Qatar, Qatar Islamic Bank (QIB) and Doha Bank recorded strongest asset growth in Q3, 15.
QIB’s assets grew by 31.5 percent, while Doha Bank recorded 17.1 percent asset growth on YoY.
Led by Qatar, the collective loans disbursed by GCC banks increased by 8.7 percent YoY to $778.5bn. The combined loans disbursed by Qatar-based banks grew 14.1 percent during the period on YoY, followed by UAE (8.8 percent), Saudi Arabia(6.4 percent)and Kuwait (5.2 percent).
The banks in Qatar maintained their loan growth momentum due to an increase in public sector spending backed by several developmental initiatives taken by the government prior to FIFA World Cup 2020. QIB, Doha Bank and QNB registered higher growth in lending of 39.8 percent, 21.9 percent and 11.5 percent YoY, respectively.
However, margins remained under pressure on YoY basis due to a 20bps decline in the yield on assets, leading to 14bps shrinkage in net interest margin (NIM). The net interest income (NII) of GCC banks increased 4.5 percent on YoY and 1.2 percent QoQ.
GCC banks’ profit growth was marginal during the period. The net earnings of the banks under coverage increased 3.7 percent YoY to $5.6bn in 3Q15.
Among Qatar based banks, QIB reported a 27.3 percent YoY bottom-line growth in 3Q15 mainly due to improvement in net and non-financing income and decline in provision. Qatar National Bank reported 6.8 percent growth in its bottom-line mainly due to lower provisions. Non-interest income of GCC banks fell 5.9 percent YoY during the quarter due to 2.0 percent YoY decline in fee income and what seems like lower investment gains. Fee income of the banks under coverage reduced 2.0 percent YoY, due to 10.7 percent YoY fall in the fee income of Saudi banks and 3.9 percent fall in the fee income of Kuwait banks.
On the other hand, Qatar reported 12.6 percent in fee income, while UAE reported 1.0 percent, partially offset the overall decline. In Qatar, Qatar Islamic Bank reported 19.4 percent YoY growth in non-financing income, followed by Qatar National Bank (6.5 percent).
