In a reflection of “strong current account surplus and lower capital outflows”, Qatar’s international reserves rose by nearly 22.5% ($7.7bn) year-on-year and totalled $41.9bn in January, a new study has shown.
The country’s international reserves stood at $34.3bn in January 2013, according to QNB.
While the balance of payments data for 2013 are yet to be released, the current account surplus is expected to have registered a strong surplus due to large hydrocarbon exports offsetting growing imports.
As a result, the latest available information suggests that import cover stands at 15.8 months, well above the International Monetary Fund-recommended level of three months for pegged exchange rates.
Qatar’s international reserves have been steadily rising over the years on large current-account surpluses. Going forward, QNB expects reserves to continue rising in 2014.
A QNB banking sector snapshot shows growth in loans and deposits improving in January this year. Loans climbed by 2.3% month-on-month (MoM). This was after a strong performance of 13.3% year-on-year (YoY) for 2013.
Deposits also expanded by 1% MoM (+19.7% YoY in 2013) in January 2014.
“Going forward, we expect activity in the banking sector to pick up in the coming months with public sector leading the way,” QNB said.
The banking sector’s loan-to-deposit ratio (LDR) increased to 107% at the end of January 2014 vs 105% in December 2013. In 2013, some banks issued Tier 1 bonds.
Commercial Bank 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 (CAR) as well as provided additional funds aiding loan book growth in 2014.
Public sector deposits receded by 2.3% MoM (down 0.6% month-on-month in December 2013), while private sector deposits gained by 4.1% MoM (+4.5% in December 2013).
Delving into segment details, the government institutions’ segment (representing 55% of public sector deposits) improved marginally by 0.3% compared with a 6.6% decrease in the previous month.
However, the government segment declined 7.4% MoM compared with a 6.6% increase in the previous month.
On the private sector front, the companies and institutions’ segment expanded by 4.2% MoM (+7.3% month-on-month in December 2013) and the consumer segment expanded up by 4% (+2% in December 2013).
The overall loan book exhibited improved performance in January this year.
Total domestic public sector loans picked up by 1.7% month-on-month after a 0.9% month-on-month growth in December.
The government segment’s loan book grew by 4.2% MoM. Government institutions’ segment (represents 63% of public sector loans) followed suit with a 1% growth.
“We maintain our view that the public sector loan growth will be the primary driver of the overall loan book in 2014,” QNB said. Source: Gulf Times