Qatar’s Banking Sector Demonstrates Resilience, Stability in March: QNBFS

The Qatar banking sector continued to exhibit resilience and sound financial stability in March 2026, with total assets remaining broadly stable on a month-on-month (MoM) basis while maintaining healthy growth compared to year-end 2025, QNB Financial Services (QNBFS) has said in a report published recently.

Supported by strong liquidity levels, robust deposit inflows, improving funding dynamics, and steady asset quality indicators, the sector remains well-positioned to support Qatar’s economic growth trajectory.

According to the report, total assets of the Qatar banking sector stood at QR2.167 trillion in March 2026, remaining largely flat sequentially while recording a 0.7 percent increase compared to year-end 2025 levels. The stability in the balance sheet reflects the sector’s prudent growth strategy amid evolving global economic conditions.

A notable highlight during the month was the improvement in the sector’s funding profile. While the overall loan book remained broadly unchanged on a monthly basis, deposits expanded by a solid 1.9 percent MoM and 3.6 percent compared to year-end 2025.

As a result, the sector’s loan-to-deposit ratio (LDR) improved to 135 percent in March 2026 from 138 percent in February, compared with 137 percent at the end of 2025. The moderation in the LDR indicates stronger liquidity conditions and improved funding flexibility across the banking system.

Public sector deposits emerged as a key growth driver during the month, increasing by a strong 6.5 percent MoM and 1.8 percent versus year-end 2025. The rise reflects continued confidence in the domestic banking system and ongoing support from government-related entities.

Within the public sector segment, government deposits, which account for nearly 30 percent of total public sector deposits, recorded a robust 8.7 percent sequential increase despite remaining slightly lower compared to year-end 2025 levels.

Government institutions, representing approximately 55 percent of public sector deposits, also posted strong growth of 7.2 percent MoM. Meanwhile, deposits from semi-government institutions remained stable during the month while still registering healthy growth of 5.4 percent compared to the end of 2025.

Private sector deposits also maintained positive momentum, edging up by 0.3 percent MoM and 4.1 percent versus year-end 2025. Deposits from companies and institutions rose by a healthy 1.6 percent sequentially and 6.8 percent since year-end 2025, reflecting continued business activity and economic confidence. Although consumer deposits eased marginally by 0.6 percent during the month, they remained higher by 2.1 percent compared to year-end 2025, highlighting sustained retail banking stability.

Non-resident deposits witnessed a modest decline of 1.7 percent MoM; however, they continued to show strong growth of 5.5 percent compared to year-end 2025. Importantly, non-resident deposits as a percentage of total deposits increased to 19.1 percent in March 2026 from 18.8 percent at year-end 2025, reflecting Qatar’s sustained attractiveness to international capital and confidence among foreign depositors.

On the lending side, the overall loan book remained stable during March 2026, supported by strong expansion in international lending activities, which offset softness in certain domestic public sector segments.

Outside Qatar loans recorded an impressive 9.7 percent sequential expansion and surged 38.3 percent compared to year-end 2025, highlighting the increasing regional and international diversification strategies pursued by Qatari banks.

Public sector loans declined by 3.3 percent MoM and 3.9 percent compared to year-end 2025. The moderation was mainly attributable to lower exposure to government institutions, which contracted by 5.1 percent sequentially.

However, lending to the government segment itself remained strong on a year-to-date basis, posting healthy growth of 15 percent compared to year-end 2025. Semi-government institutions also continued to contribute positively with a 2.3 percent monthly increase and 10.4 percent growth versus year-end 2025.

Private sector lending remained broadly stable during March 2026, increasing marginally by 0.5 percent compared to year-end 2025. The real estate segment played a stabilizing role, helping offset moderation across some other sectors. The resilience in private sector credit continues to support economic diversification efforts and ongoing investment activity within Qatar.

Asset quality indicators remained healthy and stable across the banking sector. Loan provisions to gross loans stood at 4.1 percent in March 2026 compared to 4.0 percent at year-end 2025, indicating continued prudence among banks.

Loan loss provisions increased by 3.2 percent MoM and 4.3 percent versus year-end 2025 as banks maintained adequate precautionary buffers, particularly for Stage 1 and Stage 2 loans. Importantly, Stage 3 loans remained stable, underscoring the sector’s resilient credit fundamentals and disciplined risk management practices.

Liquidity conditions also remained robust. Liquid assets to total assets stood at a healthy 30 percent in March 2026, unchanged from January and February levels. The sustained liquidity position highlights the sector’s strong balance sheet resilience and its ability to comfortably support financing requirements across the economy.

Overall, the Qatar banking sector continued to demonstrate strength, stability, and prudent financial management during March 2026. Supported by strong deposit growth, improving liquidity metrics, resilient asset quality, and expanding international operations, the sector remains well-positioned to capitalize on economic opportunities while maintaining solid financial fundamentals.