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Sun 22 Nov 2009 12:47 PM

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The Middle East’s 25 smartest banks-Qatar Islamic Bank

The Middle East’s 25 smartest banks-Qatar Islamic Bank

Earlier this month Fitch Ratings affirmed
Qatar Islamic Bank's (QIB)

ratings at Long-term Issuer Default (IDR) ‘A' with Stable Outlook, Short-term IDR ‘F1', Individual ‘C' and Support ‘1'. Fitch also affirmed the Support Rating Floor at ‘A'.

Fitch said that
QIB

's IDRs and Support Rating reflect the extremely high probability of support from the Qatari authorities, if needed; a view that has been reinforced by Qatar's support measures since the beginning of 2009 for the local banks. The Stable Outlook reflects Fitch's opinion that Qatar's credit fundamentals remain strong despite the global and regional downturn.

Meanwhile, Fitch said that the Individual Rating (or standalone strength) reflects QIB's leading Islamic franchise (around 50 percent share of Islamic assets and nine percent overall market share of system assets), high earnings power from core banking and healthy capital ratios.

The rating is constrained, however, by
QIB

's high exposure to real estate and retail sectors which could translate to sharply higher credit defaults/impairment charges in the next few reporting periods.

QIB

was incorporated by an Emiri decree in 1982 as Qatar's first Islamic bank and is now the fourth largest commercial bank in the system. Listed on the Qatar Stock Exchange, the QIA owns a five percent stake, which is likely to be increased to ten percent by end-2009.

QIB

operates under an Islamic banking licence issued by the Qatar Central Bank, which means that all of its banking operations must be fully compliant with Sharia law.

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