DOHA: Qatar-based banks witnessed the strongest growth in terms of total assets in the region during the fourth quarter of 2014. The collective assets of Qatar’s major banks grew by 11.2 percent during the quarter from a year ago. Expansion in asset base was supported by growth in loan book.
Qatar Central Bank (QCB) Governor H E Sheikh Abdullah bin Saud Al Thani recently disclosed that for the first time the combined assets of Qatar banks have crossed the one trillion Qatari riyal threshold (in full-year 2014).
The latest “GCC banking sector” research note by the Global Research, which covered 24 major banks in the GCC, including five banks in Qatar, noted Qatar Islamic Bank (QIB) and Masraf Al Rayan topped the chart in terms of asset growth in the GCC. The assets of QIB grew by 24.2 percent year-on-year and Masraf Al Rayan’s assets rose by 20.4 percent.
Loan book growth continues to remain strong across GCC markets, with banks in Qatar witnessing the highest increase of 13.7 percent YoY. Qatar-based banks maintained their loan growth momentum due to an increase in public sector spending backed by several developmental initiatives taken by the government.
Among Qatar-based banks, Masraf Al Rayan, Qatar Islamic Bank (QIB) and Doha Bank registered higher lending growth of 39.7 percent, 26.6 percent and 18.1 percent YoY, respectively. Economic expansion and huge capital investments, particularly in the infrastructure, SME and manufacturing sectors, remain growth drivers for the loan book of Saudi Arabia banks.
The collective loans disbursed by GCC banks under Global Research’s coverage increased by 9.1 percent YoY to $727.1bn in Q4, 2014 which was the main driver behind the net interest income which grew by 4.8 percent YoY during the quarter. However, margins remained under pressure on YoY basis.
The provision expenses of the region’s 24 major banks declined 15.7 percent year-on-year during Q4, last year. Provision expenses of Saudi Arabia and UAE declined 46.3 percent and 22.8 percent. In contrast provision expenses of Qatar and Kuwait rose 6.8 percent and 5.7 percent, respectively, partially offsetting the growth of the aggregate bottom-line. However, compared to the previous quarter provisions of the GCC banks grew 34.4 percent.
Qatar banks ranked second in terms of the non-interest income of GCC banks recorded 13.6 percent year-on-year growth rate. Kuwait led the pack with 24 percent increase. UAE and Saudi Arabia banks’ non-interest income rose by 13.5 percent and 2.8 percent , respectively.
In Qatar, Commercial Bank of Qatar and Masraf Al Rayan witnessed a fall in non-interest income. Among Qatar based banks, QIB reported a 30.5 percent YoY bottom-line growth in Q4 2014 mainly due to improvement in non-financing income. Masraf Al Rayan reported 27.4 percent growth in net profit due to significant decline in provisions. Commercial Bank of
Qatar reported a strong 23.5 percent growth in its bottom-line mainly due to lower operating Expenses.
The net earnings of GCC banks under coverage increased 21.2 percent YoY to $5.0bn in 4Q14,, mostly due to higher non-interest income and a 15.7 percent drop in provisions.
Net profit of banks in the Kuwait increased the most (52.9 percent YoY), followed by
UAE (32.7 percent), KSA (17.5 percent) and Qatar based banks (9.8 percent).
However, on QoQ basis, net profit of the GCC aggregate declined by 6.8 percent, with Qatar leading the fall (13.0 percent), followed by Saudi Arabia, and UAE, while Kuwait witnessed a 5.3 percent rise in net profit.
