Doha: PonteSud – News Desk
The banking credit facilities in Qatar bounced back and showed the biggest quarter-on-quarter growth in nine quarters during the first quarter Q1 of 2025 at 3%.
The increase was led by a strong growth in lending to public sector at 7.9% followed by a similar increase in lending to contractors. Lending to general trade and real estate increased by 1.5% followed by 0.8% increase in lending to services according to Kamco Invest.
Additionally, banks in Qatar registered the biggest increase in revenues with a q-o-q gain of 2.1% among the Gulf Cooperation Council (GCC) countries.
After registering a healthy growth in revenues during the previous quarter, the sequential growth in total bank revenues for the GCC banking sector was flattish with a marginal growth of 0.04%, reaching $34.6bn during Q1-2025.
The report noted that the Qatari banks witnessed growth in revenues with an increase of 2.1% followed by Saudi and UAE-listed banks with growth of 1.6% and 0.6%, respectively.
The data from GCC central banks highlighted the resilience of regional economies with continued growth in outstanding credit facilities.
Total credit facilities, as seen from central bank published data, continued to show growth during Q1-2025 led by growth in all countries in the region.
The GCC banking sector bottom-line growth remained steady during Q1-2025 witnessing a quarter on quarter growth of 7.1% and a year on year growth of 8.6% to reach $15.6 bn during the quarter, a new record high for the sector.
The increase came despite a decline in net interest income during the quarter and was mainly led by higher non-interest income, lower operating expenses as well as a sharp seasonal decline in impairments during the quarter.
The decline in net interest income reflected the impact of rate cuts during the second half of 2024 with aggregate yield on credit for the GCC banking sector falling by 5 bps to 4.16% in Q1-2025 as compared to 4.21% in Q4-2024.
Meanwhile the aggregate lending by listed banks in the GCC continued to show quarter on quarter growth during Q1-2025, backed by growth in all GCC markets.
The aggregate gross loans at the GCC level reached a new record high of $2.25 trillion, recording the highest quarter on quarter growth in 15 quarters at 3.6% in Q1-2025 versus 2.4% during the previous quarter.
The year-on-year growth continued to remain steady in double digits at 12.5%. Banks in Saudi Arabia reported the biggest quarter on quarter growth in gross loan in the GCC during Q1-2025 mainly led by healthy lending in almost all sectors.
UAE and Qatari banks were next with lending growth of $20.1bn +3.2% quarter on quarter and $14.4bn +3.6% quarter on quarter, respectively, while banks in Oman and Bahrain registered marginal increase.
In terms of type of banks, conventional banks in the GCC registered a relatively healthy growth in lending during the quarter with gross loan growth of 4.2% to reach $1.6 trillion while growth in Islamic bank lending came in at 2.4% to reach an outstanding gross loan of $677.9bn at the end of the quarter.
