The loan-to-deposit ratio of the Qatar banking sector is expected to fall during 2012 as credit growth slows and deposits rise, reversing an increase during 2011 that left the ratio well above regulatory guidelines.

By the end of November 2011, the loan-to-deposit ratio had hit 114 per cent, in excess of the central bank’s guidelines that banks do not exceed a ratio of 90 per cent.

“By the end of 2012, I expect the loan-to-deposit ratio to be more in line with the 90 per cent target rate of the central bank,” says one local economist. This will be driven by a slowdown in loan growth, which was up 29 per cent year on year in November for public sector lending, and 22 per cent for private sector lending growth. Deposits rose by 18 per cent in November 2011, compared to the same period last year, and private sector deposits rose by only 5.9 per cent.

The figures for public sector growth are because they include loans to government-owned companies such as Qatar Petroleum, which completed a $10bn financing for the development of the Barzan gas field in late 2011.