Satyendra Pathak
Doha
The monthly report on Qatar’s banking sector released by QNB Financial Services (QNBFS) on Wednesday has highlighted that the country’s banking sector continued its upward trajectory in March 2025, with a steady rise in total assets, loans, and deposits.
The report revealed that total assets of Qatar’s banking sector increased by 0.6 percent month-on-month (MoM) in March 2025, reaching QR2.074 trillion. On a year-to-date (YTD) basis, this marked a 1.3 percent growth, indicating the resilience and ongoing expansion of the sector despite global financial uncertainties.
The loan book of Qatar’s banks also saw a 0.6 percent increase MoM, registering a 3 percent rise in 2025. In comparison, total deposits edged up by 0.2 percent during the same month and rose by 3.2 percent so far this year. As a result of stronger growth in loans compared to deposits, the loan-to-deposit ratio (LDR) rose to 131 percent in March, up from 130.5 percent in February 2025. This reflects tightening liquidity conditions and sustained credit demand across key economic segments.
The overall loan book expansion in March was primarily driven by increased lending to both the public and private sectors. Public sector loans grew by 1.0 percent MoM and recorded a robust 7.9 percent increase YTD. Within this category, loans to the government segment—accounting for approximately 32 percent of total public sector loans—surged by 3.7 percent MoM, marking a remarkable 22.7 percent growth in 2025.
Meanwhile, the report said, government institutions, which make up about 63 percent of public sector loans, saw a marginal increase of 0.1 percent MoM and 2.4 percent YTD. However, loans to semi-government institutions declined by 4.6 percent MoM, leading to a 3.3 percent drop for the year.
Private sector loans also increased by 0.3 percent MoM in March and grew by 1.1 percent in 2025. The key drivers of private sector loan growth included the consumption and others, contractors, and services segments. Loans under consumption and others, which contribute roughly 20 percent to the private sector loan portfolio, grew by 0.5 percent MoM, although they registered a slight decline of 0.2 percent on a YTD basis.
The contractors segment saw a notable increase of 2.2 percent MoM and has grown by 7.8 percent in 2025. The services sector, which constitutes about 32 percent of private sector loans, posted a modest 0.2 percent MoM increase, resulting in a 0.8 percent gain for the year. Additionally, loans to the real estate and general trade sectors both increased by 0.3 percent MoM and rose 1.5 percent YTD. Lending activities outside Qatar also saw an uptick, with loans increasing by 0.9 percent MoM and maintaining a 0.9 percent growth YTD as of March 2025, indicating cautious but positive international lending exposure by Qatari banks.
On the deposits side, the QNBFS report noted that public sector deposits climbed 0.7 percent MoM and recorded a 5.3 percent increase YTD. The government segment, representing approximately 36 percent of public sector deposits, contributed significantly to this growth with a 2.4 percent MoM rise and a 9.9 percent YTD increase. Government institutions, accounting for around 53 percent of these deposits, added 1.5 percent MoM and 4.9 percent over the year. In contrast, semi-government institutions experienced a sharp decline of 7.8 percent MoM and a 5.4 percent fallin 2025.
Non-resident deposits rose by 0.5 percent MoM and were up by 1.2 percent for the year. Their share of total deposits increased to 19.1 percent as of March 2025, up from 18.2 percent at the end of 2023, highlighting the continued reliance of Qatari banks on external funding sources.
Private sector deposits showed mixed performance, dipping slightly by 0.2 percent MoM but still recording a 2.4 percent rise so far this year. Within this category, deposits from companies and institutions dropped by 1.7 percent MoM but rose 0.7 percent YTD. On the other hand, consumer deposits grew by 1.0 percent MoM, bringing their YTD gain to 3.7 percent, reflecting stable individual saving behavior.
In terms of asset quality, the report pointed out that loan provisions to gross loans edged up to 3.9 percent in March 2025, compared to 3.8 percent in February. This figure has risen from 2.3 percent in 2019 to 3.9 percent by the end of March 2025, as banks continue to set aside provisions for Stage 2 and Stage 3 loans, particularly in the contracting and real estate sectors where asset quality risks remain elevated.
Despite these challenges, liquidity in the sector remains strong. The ratio of liquid assets to total assets stood at 30.2 percent in March, slightly down from 30.4 percent in February, but still reflective of a healthy liquidity buffer across Qatar’s banking system.
The QNBFS report concludes that the overall outlook for Qatar’s banking sector remains stable, backed by robust public sector spending, manageable credit risk exposure, and healthy liquidity positions.
