Qatar banks witness strongest Q2 asset growth in Gulf rgion

9/23/2015 6:20:00 AM

(MENAFN- Gulf Times) Qatar's banking industry witnessed the strongest asset growth year-on-year in the Gulf region during the second quarter (Q2) of this year, according to a research note.
Qatar-based banks, under Global investment House coverage, reported 11.9% growth against the Gulf Cooperation Council (GCC) average of 9.8% in Q2, 2015.
The banks in the UAE had shown 11% expansion in assets, followed by Kuwait 9.2% and Saudi Arabia 8.1%.
The year-on-year expansion in asset base was supported by growth in loan book; even as quarter-on-quarter growth was rather sluggish due marginal increase in loans, it said.
Net earnings of the GCC banks, under its coverage, grew 8.8% with those in Kuwait registering the most of 15.1%, followed by the UAE (13.1%), Qatar (10.7%) and Saudi Arabia (3.7%).
The net profitability growth has been mainly due to higher net interest income and lower provisions, the note said.
Among Qatar-based lenders, Qatar Islamic Bank reported a 26.9% bottom line growth mainly due to improvement in net and non-financing income. Commercial Bank's net earnings grew 16.8% on the back of lower provisions and higher non-interest income and QNB saw 10.3% growth in net earnings on higher net and non-interest income.
The collective loans disbursed by the GCC banks expanded 10% with Qatar leading the pack with 13.9% surge, followed by the UAE (11.8%), Saudi Arabia (7.7%) and Kuwait (6.8%).
"Qatar-based banks maintained their loan growth momentum due to an increase in public sector spending backed by several developmental initiative taken by the government prior to FIFA World Cup 2022," it said, highlighting that Qatar Islamic Bank, Masraf Al Rayan and Doha Bank saw their loans grow 40.6%, 26.7% and 17% respectively.
However, Global said, found the GCC margins were under pressure on year-on-year basis due to a 16 basis points decline in the yield on assets, leading to 11 basis points shrinkage in net interest margin.
The GCC banks' net interest income increased 5.9% year-on-year and 1.8% quarter-on-quarter with lenders in Kuwait reporting the maximum expansion of 12.1%, followed by the UAE (6%), Qatar (5.4%) and Saudi Arabia (3.6%).
Non-interest income of the GCC banks grew 1.7% with Qatar registering a "stable" 10.6% growth, Saudi Arabia (2.1%) and the UAE (0.3%); while those in Kuwait witnessed a fall of 3.5%.
Fee income of the GCC banks under its coverage shrank 1.4% year-on-year due to a 10.8% plunge in the fee income of Saudi Arabian lenders. On the other hand, those in the UAE recorded 6.3% increase in fee income, Qatar (5%) and Kuwait (4.3%).
On provisions, Global found that the GCC banks had reported 13.7% decline with those in the UAE reporting 31.1% plunge, followed by Saudi Arabia (9.2%), Qatar (6.6%) and Kuwait (5.9%).
On the deposit front, the GCC banks' average growth was 7.8% compared to 12.1% in Qatar, 8.3% in Saudi Arabia, 6.3% in Kuwait and 4.4% in the UAE.

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