Qatar National Bank's Q3 net profit rises 27%

Analysts hails performance as bank increased its lending in Qatar's booming economy
Banks in Qatar are expected to benefit as the country is one of the worlds fastest growing economies
By Reuters
Wed 05 Oct 2011 06:21 PM

Qatar
National Bank (QNB), the Gulf Arab state's largest lender, reported a jump in
quarterly profit on Wednesday, as it increased lending in Qatar's booming
economy.

The
bank's third-quarter net profit rose 27 percent to QR1.9bn ($521m), according
to Reuters calculations.

QNB
reported a nine-month net profit of QR5.4bn for the period ended Sept 30. It
did not provide figures for the third quarter.

Loans,
advances and financing activities rose 43.9 percent at the end of September
from a year earlier. Customer deposits jumped 31.4 percent.

"Their
growth is strong, the liquidity profile is very solid, and their return on
weighted assets is the second highest in MENA," said Japp Meijer, senior
analyst at AlembicHC in Dubai.

"From
every angle, the performance is phenomenal."

QNB
is the first major regional lender to report earnings and is closely watched
for indications of the sector's performance.

The
bank boosted salaries for Qatari employees by 60 percent, in line with a recent
move by the state's government, two sources familiar with the matter said last
week.

In
September the Qatari government hiked salaries, pensions and benefits for its
state and military employees by 60 percent, in a move seen as an attempt to
help preserve stability in the state.

Meijer
said he did not anticipate the salary increase to weigh heavily on the lender's
fourth-quarter earnings.

"It
might be a few percentage points lower, but nothing drastic," he said.

QNB
is 50-percent owned by sovereign wealth fund Qatar Investment Authority and has
been expanding abroad, with operations in Syria, Jordan, the UAE and
Switzerland.

Banks
in Qatar are expected to benefit as the country is one of the world's fastest
growing economies - GDP grew as much as 41.8 percent in the second quarter -
and is set to spend more on infrastructure as it prepares to host the 2022
World Cup.

Shares
in QNB are up 5 percent so far this year. They closed at QR139.5 on the Doha
exchange Wednesday.

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