Qatar Islamic Bank Q3 profit dips slightly

Gulf state's second largest lender posts 3.5 percent dip after big jump in provisions
The bank made a net profit of QAR393.1m (US$108m) in the three months to September 30.
By Reuters
Wed 17 Oct 2012 06:27 PM

Qatar Islamic Bank (QIB), the Gulf state's second-largest lender by market value, posted an 3.5 percent drop in third-quarter net profit on Wednesday as a big jump in provisions impacted quarterly earnings.

The bank made a net profit of QAR393.1m (US$108m) in the three months to September 30, compared with QAR407.2m in the same period a year ago, according to Reuters calculations.

This beat the average forecast of three analysts, who expected the bank to make a quarterly profit of QAR389.7m.

Higher provisioning was the main drag on quarterly earnings, with the bank setting aside QAR298m versus QAR73m in the year-ago period, a statement from the bank said.

QIB's nine-month net profit rose 2 percent over the corresponding period of 2011 to QAR1.13bn, the statement added.

Total assets grew 26.7 percent year-on-year to QAR66.8bn at the end of September, the statement said, while customer deposits jumped 50 percent in the same period to QAR39.9bn.

Net operating income for the third quarter grew 20 percent compared to last year to QAR2.46bn, "reflecting the strong growth in the bank's core operating activities," the statement added.

The lender returned to global debt markets at the beginning of October after a two-year absence with a US$750m Islamic bond sale, tapping into strong liquidity for regional issuers.

It priced a five-year sukuk at a profit rate of 2.5 percent, and a spread of 175 basis points over midswaps, tighter than the earlier guidance after strong investor interest.

Earlier this month, Qatar National Bank, the first major regional lender to report earnings and considered a bellwether for the sector's performance, posted a 10.5 percent jump in third-quarter profit.

Banks in Qatar are expected to benefit as the country, one of the world's fastest growing economies, spends billions of dollars on infrastructure as it prepares to host football's 2022 World Cup.

QIB shares slipped 0.4 percent on Wednesday, prior to the results announcement. They are down 8.4 percent year-to-date, versus a 2.8 percent drop on the main Qatar exchange.

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