(MENAFN- The Peninsula) The overall credit facilities by Qatar banks increased 13.1 percent to QR575.4bn year-on-year at the end of 2013.Among other items in the assets side, financial securities portfolios accounted for QR164.2bn. Compared to the year 2012, the portfolio grew by 18.4 percent in 2013, Qatar Central Bank (QCB) data said.
The banking sector performance was remarkable in 2013 with their combined assets (liabilities) reaching QR910.1bn, up 11.4 percent compared to the previous year. Although the banks continued their strong growth in past many years, the 2013 year asset growth was mostly driven by firm expansion of credit financial securities in their balance sheet.
In the combined balance sheet of banks, domestic credit is the largest asset with QR533.1bn. Share of domestic credit is 58.6 percent of total assets by the end of the year, a 11.8 percent year-on-year increase. The year witnessed a significant drop in foreign currency credit especially from the public sector. Domestic credit in foreign currency has decreased by 56.7 percent against previous year. In the public sector, the drop was 72.6 percent.
This remarkable drop in foreign currency denominated domestic credit is attributed to public sectors' intent to obtain local currency credit in order to avoid forthcoming impact of upward interest rate movement as part of monetary normalisation in the United States. The relative share of domestic credit in foreign currencies has reduced to just 19.1 percent, thus put the end of three-year expansion of foreign currency credit.
Cross-border credit facilities by Qatar banks increased by 33.3 percent to QR42.3bn YoY. Among 89.5 percent of credit outside Qatar were processed in foreign currencies, while 94.5 percent of foreign credits were distributed to private sector in 2013.
Financial securities are the second major assets class of the banks' balance sheet with QR164.2bn worth securities as of the end of 2013. The banks' domestic securities recorded at QR139bn in 2013, 10.9 percent higher than a year ago. Share of domestic securities accounted for 84.7 percent of total financial securities portfolio held by the banks.
Out of total domestic securities, 90.1 percent were invested in Government securities, especially T-bills and Government bonds. Total Government securities recorded at QR125.2bn as of end of the year. Annually, commercial banks investment on domestic Government securities increased significantly from 2011 onwards. Of the total QR125.2bn worth investment in Government securities, QR47.3bn was in sukuks in 2013.
As of the end of 2013, the banks' foreign financial securities reported at QR25.1bn assets, where Government securities accounted QR15bn assets, or 59.5 percent, of total foreign financial securities held by the banks. Compared to 2012, there was a significant jump of 526.2 percent in foreign government securities held by the banks in 2013.
Significant accumulation of foreign government financial securities has led to 89.2 percent increase in total foreign financial securities in 2013. With regards to other foreign securities, banks held QR6.9bn of other bonds, QR2bn equities and QR1.3bn other financial securities (mainly mutual funds and others). Overall, the banks' financial securities were equivalent to 18 percent of overall assets in 2013.
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