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Wed 15 Oct 2008 05:11 PM

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CBQ sees profit jump 36%

UPDATE 1: Commercial Bank of Qatar posts Q3 net income of $143.8mn, at low end of forecasts.

Commercial Bank of Qatar posted its second-biggest quarterly profit in the third quarter, as it lent more in an economic boom in the world's biggest exporter of liquefied natural gas and expanded abroad.

The lender posted a third-quarter net profit of 523.1 million riyals ($143.8 million) on Wednesday, up 36.2 percent from 384.2 million riyals in the year-earlier period.

"The scale of economic activity in Qatar and our diversification strategy have enabled robust growth in all of our core businesses," Abdullah bin Khalifa Al-Attiyah, the bank's chairman, said in a statement.

Reuters reported earlier a third-quarter profit of 560 million riyals calculated from previous financial statements.

Commercial Bank had a profit of 1.6 billion riyals in the nine months ended Sept 30, versus 1 billion riyals a year earlier, it said.

"The results are probably due to the high profit margins from lending in the real estate sector," said Samer Al-Jaouni, general manager of Middle East Financial Brokerage Co in Dubai.

"I think the results are good and were expected but I don't think it will have an effect on the stock price because of current sentiment," he said, referring to the current global economic crisis.

Net fee and commission income in the three months ended Sept 30 rose 56.3 percent to 265.71 million riyals from 169.95 million riyals in the same quarter last year, the company's financial statement showed.

The quarterly earnings came at the bottom end of analysts' forecasts in a Reuters profit survey last month which ranged from 517 million riyals to 645.50 million riyals.

The average forecast was 573.01 million riyals.

Gulf Arab banks have boosted their lending businesses in the world's top oil exporting region, boosted by an almost four-fold rise in oil prices in the last six years.

They have also been expanding outside of their home markets through acquisitions as they face greater domestic competition. Commercial Bank said earlier this year it planned to continue regional acquisitions.

Commercial Bank's total assets at the end of the third quarter stood at 57.8 billion riyals, up 41.7 percent from the same period in 2007, it said.

The bank's shares closed 3.09 percent lower at 92 riyals. The results were released after market close.

"The strength and diversity of our income has been maintained and we are in a better position than ever before to build on this growth, both within the Qatar market and regionally," Group Chief Executive Andrew Stevens said.

Qatar National Bank (QNB), Qatar's largest lender by market value, topped analysts' forecasts with a record profit of 1.14 billion riyals in the third quarter.

Doha Securities Market said on its website that the Ministry of Business and Trade had called for the postponement of a 10 percent share issue which Commercial Bank had proposed to hold from Nov. 2 to Nov. 16. (Reuters)