Qatari banks close 2025 on strong footing as overseas lending powers solid growth

Doha [Qatar], February 19: The Qatar banking sector wrapped up 2025 on a strong and confident note, delivering solid growth across key balance sheet and earnings drivers compared with last year, QNB Financial Services (QNBFS) has said in a report published recently.According to the report, total assets rose by a healthy 5.1 percent versus year-end 2024 to reach QR 2.152 trillion in December, underscoring the sector's continued expansion and resilience despite a broadly stable month-on-month performance at the end of the year. The annual growth reflects steady credit demand, disciplined balance sheet management and the sector's increasing regional and international footprint.Lending activity remained a key pillar of growth, with the sector's loan book expanding by 6.6 percent compared with year-end 2024. This performance highlights banks' ability to support economic activity across public and private sector segments over the course of the year, even as loan balances were broadly unchanged in December following a strong run of growth earlier in 2025.Overseas lending emerged as one of the standout growth drivers for the sector in 2025. Loans outside Qatar surged by more than 41 percent compared with year-end 2024, underscoring the success of Qatari banks in expanding their regional and international presence. The strong growth reflects a strategic push to diversify revenue streams, tap higher-growth markets and reduce concentration on the domestic credit cycle. This expanding international footprint not only supports earnings diversification but also enhances the sector's resilience by spreading risk across multiple geographies and economic cycles.The private sector continued to contribute positively, with loans rising 4.2 percent year-on-year, supported by general trade and ongoing business activity. Meanwhile, lending outside Qatar recorded a sharp 41.1 percent increase compared with year-end 2024, reflecting the success of Qatari banks in diversifying their income streams and capturing growth opportunities in regional and international markets.On the funding side, deposits increased by 1.7 percent compared with year-end 2024, pointing to a stable and growing funding base over the year. Public sector deposits rose 2.2 percent on an annual basis, reflecting sustained engagement with government and government-related entities, while private sector deposits climbed 2.9 percent year-on-year, underlining the continued confidence of corporates and households in the domestic banking system.Consumer deposits, in particular, recorded solid growth of 4.4 percent compared with last year, highlighting the expanding retail franchise of Qatari banks and the deepening of customer relationships. Non-resident deposits remained a meaningful source of funding, supporting the sector's international expansion, even as their share of total deposits moderated, pointing to a healthier and more balanced funding mix.Asset quality remained sound, with the ratio of loan provisions to gross loans stable at 4 percent, reflecting prudent risk management and continued balance sheet strengthening. Banks increased provisions by 9.6 percent compared with year-end 2024, demonstrating a conservative approach to risk, particularly in sectors such as contracting and real estate. Importantly, Stage 3 loans remained stable, indicating that problem loans are contained and that credit stress has not materially increased over the year, despite a more challenging operating environment.Liquidity conditions remained strong, with liquid assets accounting for 30 percent of total assets in December, in line with November and reflecting robust liquidity buffers across the system.While the loan-to-deposit ratio increased compared with last year, this largely reflects the stronger pace of loan growth relative to deposit growth over 2025 and signals effective deployment of balance sheet capacity in support of economic activity rather than any deterioration in financial stability.Overall, the report said, the sector enters 2026 in a position of strength, backed by healthy asset growth, resilient funding, stable asset quality and a growing international presence. The positive year-on-year performance highlights the sector's ability to adapt to changing liquidity conditions while continuing to support the domestic economy and expand beyond national borders, led by major players such as Qatar National Bank and Commercial Bank of Qatar.Source: Qatar Tribune