Doha Bank second-quarter profit climbs 13 percent

Qatari lender beats estimates as it gains from interest income and lower provisions for bad assets
Doha Bank second-quarter profit climbs 13 percent
Qatari investor stock exchange
By Bloomberg
Tue 19 Jul 2011 04:24 PM

Doha Bank reported a 13 percent jump in second-quarter
profit, beating analysts’ estimates, as the Qatari lender gained from interest
income and cut provisions for bad assets.

Net income rose to QR339.4m ($93m), or QR1.64 a share, from
QR299.7m, or QR1.58 , the bank said in a statement to the Qatar Exchange on
Tuesday. The median estimate of four analysts was for a profit of QR309.5m,
according to data compiled by Bloomberg.

Qatar, the world’s biggest exporter of liquefied natural
gas, forecasts its economy to expand by 15.7 percent this year, helped by fuel
exports. Qatar National Bank SAQ, the Arabian Gulf country’s biggest lender by
assets, posted a 25 percent jump in second-quarter profit as it gained from
interest income.

The central bank in February told all conventional lenders
to wind down their Islamic banking divisions and to stop taking Islamic
deposits on concern they may be using funds from the conventional bank for
Islamic loans. The regulator in April also reduced the amount banks can lend to
Qataris to QR2m from 2.5 million and to foreigners to QR400,000, and limited
the interest lenders can charge on the loans.

Doha Bank has fully applied the new regulations on loans, it
said today. “We are convinced that the new ceiling on personal loans will not
curtail consumer lending,” chief executive officer Raghavan Seetharaman said.

Net interest income rose to QR389.5m in the second quarter
from QR311m, while provisions for impairment of loans, advances and investments
dropped to QR47.3m from QR108.2m.

Doha Bank was added to the “most preferred list” of shares
at Bank of America Merrill Lynch in June with a “buy” recommendation. “With
strong public sector spending in 2010, private sector recovery in Qatar finally
seems to be on track and is expected to contribute positively on Doha Bank’s
balance sheet in the coming quarters,” Bank of America said.

The shares fell 1.5 percent to 51.1 riyals today before the
results were released. The stock has dropped 21 percent this year, compared
with a 3.5 percent decline in the benchmark QE Index.

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