Qatar’s banks have posted increased profits for the first nine months this year, compared with the same period last year, ensuring the country’s banking sector continues to be highly liquid and ready to support the government’s planned infrastructure spending.

Qatar National Bank (QNB), the Gulf’s largest lender, saw net profits for the first nine months rise by 12.6 per cent to QR8bn ($2.2bn), helping maintain its leading position in the region. 

Total assets increased by 8.8 per cent from September last year to reach QR475bn, the highest ever achieved by the bank. This growth was attributed to an 8.1 per cent increase in its loans and advances portfolio to reach QR329bn.

However, some banks have posted more muted credit growth this year, with new central bank regulations introduced by the Central Bank of Qatar in July that impose a maximum net loan-to-deposit ratio of 100 per cent for Qatari banks, which could potentially place pressure on their lending capacity.

The central bank has given financial institutions until the end of the year to comply with the regulations.

Doha Bank is one of the Qatari banks that saw slower-than-expected loan growth.

An analyst note from Kuwait-based NBK Capital refers to the bank’s loan growth as “sluggish”, as the lender’s loan book decreased 1.5 per cent quarter-on-quarter in the third quarter, resulting in its year-to-date loan growth reaching about 9 per cent, which is below most analysts’ expectations.

Doha Bank has already decreased its net loan-to-deposit ratio in the third quarter in 2014, currently standing at 101.5 per cent at the end of September.

In contrast, QNB’s loan-to-deposit ratio reached 93 per cent at the end of September.

In the long term, however, Qatari banks’ profitability and loan books are expected to grow at a more rapid pace, increasing between 15 and 20 per cent in the coming years.

In particular, Qatar’s Islamic lenders will start gaining market share, with the sector already growing faster than conventional banks.

The country’s sharia-compliant financial institutions grew their balance sheets by 28 per cent between 2009 and 2013, benefiting from the rise in infrastructure spending, according to US ratings agency Standard & Poor’s (S&P).