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Wed 18 Jul 2012 06:30 PM

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Qatar's CBQ sees Q2 profit rise by nearly 8%

Commercial Bank of Qatar says lower provisions, recovery of impairments boost performance

Qatar's CBQ sees Q2 profit rise by nearly 8%
(Bloomberg News - for illustrative purposes only)

Commercial Bank of Qatar (CBQ) posted a nearly eight percent rise in quarterly profit on Wednesday on lower provisions and the recovery of impairments taken in two previous quarters, beating analysts' forecasts.

The Gulf Arab state's third-largest lender by market value earned QR546m ($149.95m), up 7.7 percent from QR509.6m a year earlier.

Analysts had forecast average quarterly profit of QR486.56m, according to a Reuters poll.

"The second quarter included the recovery of the provision taken in the previous two quarters for a single domestic Islamic banking corporate account," CBQ said, without giving further details.

The bank posted a first-half net profit of QR1.1bn, it said in a statement, compared to QR955.5m in the year-earlier period.

Loans and advances grew 10 percent to QR43.9bn at the end of June. Lending growth came from both corporate and retail businesses, CBQ said. Net provisions were down 64 percent to QR32m in the first half of the year.

Customer deposits rose 17 percent to QR40.6bns from the year-earlier period, the lender said.

Total assets rose 8 percent to QR73.3bn as of June 30 compared with the year-earlier period. Meanwhile, total operating expenses rose 10 percent to QR455m due to a six percent increase in staff costs.

"Whilst public sector lending has grown in the second quarter, private sector credit demand has remained subdued and at a lower level than the first half of 2011," said Andrew Stevens, CBQ Group's chief executive.

"Despite this, we have grown both our loan book and our deposit base and have further diversified our sources of funding."

In April CBQ launched a $500m five-year bond. In February it signed a $455m term loan with a club of seven regional and international banks, with the cash to be used for general corporate purposes, the bank said, without giving further detail on tenor or pricing.

Banks in Qatar are expected to benefit from heavy state spending on infrastructure as the world's fastest growing economy prepares to host the 2022 World Cup.

Shares in CBQ closed flat at 71 riyals before the results were announced.

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