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Qatar-based banks loan book grew by 23 percent

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Staff writer ▼ | June 24, 2014
Qatar bankQatar-based banks witnessed the highest increase in their loan book growth in the GCC during the first quarter of 2014. The banks' loan book grew by 23 percent year-on-year, the highest among GCC nations, a new report showed.

"Qatar-based banks maintained their loan growth momentum due to increase in public sector spending. Acquisition made by Qatar National Bank (QNB) and Commercial Bank of Qatar during the year also propelled loans growth considerably. Among Qatar-based banks, Commercial Bank of Qatar, Qatar Islamic Bank and Doha Bank registered higher growth in loan book of 33.6 percent, 30.1 percent and 26.1 percent YoY respectively," Global Investment House's (GIH) GCC Banking Quarterly report said.

Qatar also ranked top in the GCC in terms of the growth in the net interest income (NII) of GCC banks. The NII of banks grew the most (25.6 percent YoY), followed by UAE (12.9 percent), Saudi Arabia (7.8 percent) and Kuwait (5.2 percent).

Commercial Bank of Qatar witnessed a robust growth of 36.8 percent YoY in NII driven by growth in loan book due to consolidation of ABank. Qatar Islamic Bank reported 28.9 percent growth in NII.

Non-interest income of GCC banks grew by 7.9 percent YoY during the quarter due to strong growth in fee income. Fee income of combined coverage increased by 14.4 percent YoY, with banks in Qatar leading (36.9 percent YoY), followed by those in UAE (25.5 percent) and Saudi Arabia (6.7 percent). Kuwait-based banks witnessed a marginal 0.1 percent rise in their fee income during the quarter.

Amongst the Qatar-based banks Masraf Al Rayan reported 62.1 percent YoY growth in non-interest income backed by 96.6 percent YoY growth in fee income. During the quarter, the overall operating expenses of the banks grew 18.2 percent to $3.4bn, primarily driven by Qatar (44.7 percent), followed by Kuwait (23.3 percent), UAE (15.2 percent) and Saudi Arabia (8.3 percent).

Commercial Bank of Qatar recorded the highest rise in operating expenses, following the acquisition of ABank. Qatar National Bank witnessed a 57.7 percent YoY growth in operating expenses during the quarter.

Provision expenses of the banks covered by the GIH increased 2 percent YoY during 1Q14; however, declined 37.7 percent QoQ. Kuwait-based banks managed to reduce provision expenses 22.7 percent YoY during the quarter. All other countries in the region witnessed increase in provisions on YoY basis with Qatar leading (22.1 percent), followed by Saudi (14.1 percent) and UAE (3.8 percent).

Qatar-based banks witnessed the strongest growth in total assets (21.6 percent YoY), followed by banks in Kuwait (13.6 percent). Net earnings of GCC banks covered by the GIH analysts increased by 9.3 percent

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