Doha Bank should report some growth in net profit this year as the Qatari banking sector benefits from strong economic growth and expansive government spending, its chief executive said on Sunday.Still, the lender would hold back on any expansion plans this year and has no plan to raise debt until international borrowing terms become more attractive, R. Seetharaman said.
Doha Bank reported a 20-percent rise in net profit in the first quarter after the government bought local securities off of banks' balance sheets as part of a number of state measures to support the financial system.
Doha Bank said earlier this month it expected 2009 profits to increase by 10 percent from 2008.
"The banking system will be responsive to the macroeconomic fundamentals," R. Seetharaman told Reuters.
"It's a very stable and functional economy. We should be reporting marginal growth over last year ... including the overall balance sheet and profit."
The economy of Qatar, the world's largest exporter of liquefied natural gas, is likely to grow seven to nine percent this year as the country boosts natural gas production, its central bank governor said last month.
Like its neighbours in the oil-exporting Gulf region, Qatar has committed to expanding public spending this year to carry its economy through a global slowdown that brought to an end the region's economic boom.
"We have seen the worst," Seetharaman said. "I am very cautiously optimistic. We have seen the bottom and are going up."
The bank would focus on its existing branch network in Qatar, the UAE, Kuwait and the United States this year as it watches developments on international credit markets, Seetharaman said.
He said Doha Bank would derive income from financing for small and medium-sized enterprises, retail banking, and trade financing with such countries as Singapore, Turkey, China where it operates representative offices.
"This year is a year of internal integration. There is no expansion," he said.
"This is not a time to experiment ... I want to make sure that we measure the global economic trends and measure the money markets and realign effectively. International borrowing and placements need to be revitalised."
Earlier this year, Qatar bought 6.5 billion riyals ($1.79bn) worth of equity investments off of banks' balance sheets, while the Gulf state's sovereign wealth fund purchased stakes in local banks late last year. (Reuters)For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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