(MENAFN- The Peninsula) Heavy public spending has boosted Qatari banks' loan book growth to the highest in the GCC. Banks in Qatar registered the highest growth of 23.1 percent year-on-year in the second quarter of 2013. The overall loan book growth in the region during the period is 13.9 percent.
The region's non-interest income growth during Q2, 2013 was led by Qatari banks, up 30.6 percent year-on-year. The profitability of banks in Qatar increased by 13.4 percent during the period, Global Investment House (GIH) noted yesterday in its quarterly analysis of GCC banking sector.
The loan book of GCC banks grew 13.9 percent y-o-y to $631.2bn in 2Q13. Qatar witnessed highest increase followed by Saudi Arabia, 13.0 percent. "Qatar-based banks maintained their loan growth momentum due to an increase in public sector spending as the country is preparing to host the FIFA World Cup in 2020. Acquisition made by QNB and Commercial Bank of Qatar (CBQ) during the year also propelled loans growth considerably. Among Qatar-based banks, Qatar National Bank (QNB) and Doha Bank registered higher growth in loan book of 26.3 percent Y-o-Y and 21.9 percent Y-o-Y respectively" the GIH analyst Faisal Hasan noted.
The net interest income (NII) of GCC banks increased 12.9 percent Y-o-Y and 10.1 percent Quarter-on-Quarter. The NII of banks in Qatar grew the most, up 30.6 percent Y-o-Y, followed by that of banks in Kuwait (18.0 percent) and the UAE (10.3 percent). Among the Qatar-based banks QNB witnessed a robust growth of 46.5 percent Y-o-Y in NII driven by consolidation of the bank's Egypt-based Egypt-based subsidiary National Societe Generale Bank-Egypt (NSGB). Masraf Al Rayan's NII rose 40.9 percent Y-o-Y due to a 28bps Y-o-Y improvement in NIM.
Non-interest income of GCC banks increased 14.5 percent Y-o-Y during the quarter on higher investment income and fee income as well as on one-off gains. Fee income increased 8.6 percent Y-o-Y among GCC Banks, with banks in Qatar leading up 43.3 percent, followed by Kuwait up 17.0 percent.
QNB registered a 69.3 percent growth in non-interest income due to a 91.6 percent y-o-y rise in fee income and 130.5 percent y-o-y increase in investment gains. GIH's research analyst Faisal Hasan noted.
Provision expenses of the GCC's covered banks increased 6.4 percent y-o-y during 2Q13, mainly due to significant increase in pvosions of Qatar-based banks. During 2Q13, Commercial Bank of Qatar's provisions of impaired loans increased to QR134m from a reversal of QR13m in 2Q12. The increase is primarily on account of prudential provision taken on a domestic real estate loan.
QNB also registered an 89.7 percent y-o-y rise in provisions due to growth in its overall loan portfolio after the NSGB acquisition.
Total assets of GCC banks under the GIH coverage expanded 14.1 percent y-o-y to $994.8bn in 2Q13. Qatar-based banks witnessed the strongest growth in total assets, up 23.2 percent to $196bn followed by banks in Kuwait, UAE and Saudi Arabia.
Expansion in asset base was supported by double-digit growth in loan book. However, on Quarter-on-Quarter basis, asset growth was sluggish due to marginal increase in loan book. Among the individual banks, QNB led with a 30.4 percent y-o-y growth in asset base.
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