Qatari banks listed first in the Gulf ranked in the list of the highest growth rates of loans granted during the last quarter of 2022 by 3.5%, and the total value of credit facilities in Qatar amounted to 1.3 trillion Qatari riyals by the end of the last quarter of 2022, with the main support of the growth of credit provided to the real estate sector by 9%, followed by service sector and public sector credit growth of 5.5% and 5.4%, respectively.
According to (Kamco Invest) data, the Qatari banks listed on the stock exchange ranked first in the Gulf at the level of risk prevention by deducting the highest level of precautionary provisions in the region at a value of $3.9 billion (14.19 billion Qatari riyals) during 2022, which reflects the continuation of the precautionary conservative policy of the local banking sector. Which is supervised by the Qatar Central Bank, and aims to maintain the quality and quality of assets at high levels, in addition to the formation of Qatar National Bank, QNB, and Commercial Bank, for provisions to hedge exposure to the risks of high-intensity inflation in Turkey, as the two Qatari banks own both QNB Finance Bank and Alternatif Bank, respectively, the two operators In the Turkish market and exposed to the risks of hyperinflation and fluctuations of the Turkish currency.
UAE banks ranked second in the list of Gulf banks with the most deductions for provisions during 2022, at $3.5 billion, then Saudi banks ranked third in the Gulf, with provisions worth $2.6 billion, while Kuwaiti banks ranked fourth in the Gulf, with provisions of $800 million. While the total allocations of Gulf banks during the year 2022 reached the level of 11.9 billion dollars
Provisions are considered any burden on the revenues of the financial period to meet any possible decrease in the value of any of the assets as a result of the occurrence of any potential risks, or any confirmed or probable obligations. The provisions are distributed among provisions for bad debts, and others for doubtful debts, in addition to mandatory and other additional provisions resulting from the application of local banks to Accounting Standard No. By setting aside it, it can be edited and included in the profits, as soon as the reasons for its deduction are no longer available.
Historically, provisions for Qatari banks increased at a rapid pace, as provisions recorded a level of $1.6 billion (5.82 billion Qatari riyals) in both 2018 and 2019, then jumped in the wake of the outbreak of the Corona pandemic to a level of $2.9 billion (10.55 billion Qatari riyals) in 2020 and the trend continued. upwards to $3.4 billion (12.37 billion Qatari riyals) in 2021.
On the Gulf level, according to an analysis conducted by Kamco Invest of the financial data that was announced by 58 banks listed on the stock exchanges of the Gulf Cooperation Council countries for the fourth quarter of 2022, the rise in interest rates in the United States and the follow-up of most central banks in the countries of the Cooperation Council Almost the same approach during 2022 led to an increase in the net interest margin for the Gulf banking sector, as the average net interest margin for banks in the Gulf Cooperation Council countries exceeded its highest levels recorded in several years, and reached more than 3% during the fourth quarter of 2022, albeit Partly reflects rising interest rates, the bulk of which were raised during the second half of the year. Saudi banks recorded the highest average net interest margin at 3.16% during the last quarter of 2022, followed by UAE banks in second place in the Gulf, with an interest margin of 3.
The increase in margins was also reflected in the performance of the return on credit (net interest income against total loans) for the Gulf banking sector, which also reached its highest levels recorded in several quarterly periods, at 4% during the fourth quarter of 2022, compared to 3.7% in the third quarter of 2022. In the last quarter of 2022, the net profit of the Gulf banking sector remained unchanged on a quarterly basis and did not witness a significant change, as it amounted to $11.4 billion, consistent with the performance of the previous quarter (the third quarter of 2022).
These results came despite the increase in net interest and non-interest income during the quarter, with total bank revenues reaching a new record of $28 billion. However, profit growth was offset by higher operating expenses as well as increased provisions in the fourth quarter of 2022. And revealed Data for listed Gulf banks recorded growth, as the total value of loans provided by Gulf banks reached a new record of $1.87 trillion, with a growth of 3.2%, or the equivalent of $57.5 billion, during the last quarter of 2022, and net non-performing loans witnessed a lower growth. Slightly by 2.8% during the last quarter as a result of the increase in provisions withheld during the last quarter of 2022.
Customer deposits recorded strong growth again during the fourth quarter of 2022, after declining growth rates during the third quarter of 2022, which reached the lowest levels recorded in six quarters. The total growth in customer deposits on a quarterly basis was 2.5%, reaching $2.2 trillion by the end of the fourth quarter of 2022. The change on a quarterly basis in customer deposits was widespread, with only Bahraini banks registering a marginal decline during the last quarter of 2022. , while most other Gulf countries recorded growth. The net effect of the strong growth in lending operations and growth in customer deposits at a slightly slower pace was the growth of the loan-to-deposit ratio in the GCC countries by the end of the fourth quarter of 2022 by 30 basis points. In addition, despite this growth, the percentage remained below the level of 80%, which is considered one of the lowest levels recorded on a quarterly basis, as it reached 79.3%.
On the other hand, the growth of lending activity in the GCC countries continued to be strong during the fourth quarter of 2022, which led to an increase in loan books by the end of the quarter. Total loans amounted to $1.87 trillion, with a growth of 3.2% on a quarterly basis and by 8.9% on an annual basis, mainly supported by the strong growth witnessed by all GCC countries, with the exception of a marginal decline witnessed by Bahraini banks. Listed banks in all GCC countries recorded an increase in net loans on a quarterly basis by the end of the fourth quarter of 2022, with the exception of Bahraini banks, which recorded a decrease of 0.3%. Net loans at the end of the first quarter of the year amounted to $1.77 trillion, a growth of 2.8%, or the equivalent of about $48.7 billion.
Credit growth in the GCC remained strong during the fourth quarter of 2022 despite higher interest rates, indicating strong economic activity and business confidence in the region. Manufacturing activity data issued by Bloomberg Agency (Market Economic Surveys) showed that the PMI reading rose to its highest level recently recorded in Saudi Arabia, as the index reading reached 59.8 points in February 2023, while the index reading in the UAE and Qatar reached 54.3 and 51.9. point, respectively. The region’s credit growth data revealed an increase in lending activity on a quarterly basis for all regional central banks except for Bahrain, which recorded a decrease of 2.2%, and the UAE, which recorded a marginal decrease of 0.2%.
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