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Mon 19 Jul 2010 08:18 PM

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Doha Bank Q2 beats forecast but bad loans rise

Analysts said they expect good credit growth in Qatar in the short to medium term.

Doha Bank Q2 beats forecast but bad loans rise
PROFIT DROP: Qatars Doha Bank posted a Q2 net profit of $82.3m, a 5.4% drop from the previous year, but ahead of expectations. (Getty Images)

Qatar based Doha Bank posted a second quarter net profit of $82.3 million, a 5.4 percent drop from the year earlier period but ahead of analysts' expectations.

Analysts polled by Reuters had expected Qatar's fifth largest bank to post an average of $75.45 million for the second quarter.

Total non performing loans as at June 30, 2010 rose to $285.6 million from $233.7 million at the end of Dec 31, 2009.

Non performing loans at the end of first half amounted to 3.8 percent of totals loans and advances, the bank said.

Faisal Hasan, head of research, Global Investment House, Kuwait, said: "Overall, we are positive on the Qatari banking sector, mainly because of the projects in the public sector that Qatar has planned. We expect good credit growth in Qatar in the short to medium term."

He added: "We'll have to look at the provisions and see if they plan more provisions in the coming quarters."

Shares of Doha Bank closed at $12.08 on Monday before the resutls were released, down 0.68 percent.

In March, Qatar's central bank said banks would be allowed to diversify their revenue base and bolster trading income by buying shares of listed companies on the bourse and re-entering brokerage operations.

Qatar's economy grew at an average pace of 17.4 percent over the past five years and it is set to largely outperform fellow Gulf oil producers such as Saudi Arabia and the UAE in coming years due to expansion of its gas facilities. (Reuters)

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