Qatar’s lenders wrapped up December with their balance sheets on firmer ground, as total loans climbed 6.6 percent compared to the previous financial year — a noticeable step up from the 4.6 percent growth recorded a year earlier.
Over the past five years, credit expansion has averaged 4.9 percent annually, reflecting a steady, if measured, appetite for borrowing across the economy.
By the end of December, total loans stood at QR1.44 trillion, holding steady from the previous month. Beneath that calm surface, however, there was movement. International lending posted solid gains, offsetting a sharp 5.5 percent pullback in public sector borrowing. Private sector credit edged up by 0.5 percent, suggesting cautious but continued engagement from businesses and households.
Public sector loans, on a sequential basis, declined 5.2 percent in December, even as they remained 6.6 percent higher compared to the full 2024 financial year.
Assets across the banking system ticked up 0.2 percent month-on-month to reach QR2.15 trillion. Year-on-year, total assets expanded 5.1 percent — an improvement over the 3.9 percent pace seen in the prior year. Over five years, asset growth has averaged about 5 percent annually, underscoring the system’s gradual but consistent scaling.
Liquidity remains robust. Liquid assets accounted for 30 percent of total assets in December, a level widely viewed as comfortable in the region’s banking landscape.
On the funding side, total deposits saw a modest 1.7 percent increase versus the previous financial year, though the pace lagged the 4.1 percent expansion recorded in 2024. Over five years, deposit growth has averaged 2.9 percent.
Month-on-month, public sector deposits slipped 3.4 percent, while private sector deposits dipped 0.9 percent. In contrast, non-resident deposits rose 2.2 percent from November, though they were slightly lower on a yearly basis.
By composition, private sector deposits formed the largest share at 46.3 percent of the total, followed by the public sector at 34.9 percent and non-residents at 18.8 percent.
The sector’s loan-to-deposit ratio nudged up to 137 percent in December from 136 percent in November. Still, when calculated under the guidelines of the Qatar Central Bank — which factor in stable funding sources — the ratio remains comfortably below the 100 percent regulatory ceiling.
Meanwhile, provisioning levels have stabilized. Loan provisions to gross loans held steady at 4 percent in December, slightly above the 3.9 percent level at the end of 2024. The rise from 2.4 percent in 2020 to current levels reflects cautious buffers built up against riskier exposures, particularly in contracting and real estate portfolios.
Looking ahead, banks are positioned to draw momentum from the country’s broader development ambitions. The government’s Third National Development Strategy (2024–2030) places financial services at the heart of economic diversification — a signal that the credit cycle may yet have more room to run.
