Qatar Bank Liquidity Tightens in January as Deposits Decline

  • Lenders' loan-to-deposit ratio worsened to 121.8% in January
  • Loans rose 1.3% in January from December; deposits fell 1.9%

Qatar bank liquidity last month tightened further as lending rose and customer deposits declined in the world’s biggest exporter of liquefied natural gas.

Qatar banks’ credit facilities within the country climbed 1.3 percent to 673.5 billion riyals ($185 billion) in January from the previous month, while domestic customer deposits dropped almost 2 percent to 552.8 billion riyals, according to data posted on the central bank’s website. That worsened lenders’ loan-to-deposit ratio to 121.8 percent from 117.9 percent, according to Bloomberg calculations.

Liquidity at banks in Qatar, which may post a budget deficit of $13 billion this year, is tightening as revenue from energy resources sink. Reflecting the drop in cash holdings at banks, the three-month Qatar Interbank Offered Rate in February climbed to the highest level since 2011. The nation’s central bank canceled two successive monthly treasury bill auctions this year.

Money lent by Qatari banks as a percentage of their deposits is well above its neighbors, who have also suffered due to oil’s plunge. The ratio for Saudi Arabian banks was 84.8 percent in December, while the ratio for lenders in the United Arab Emirates was 101.4 percent in January, according to central bank data.

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