Qatar Commercial, Qatar Islamic post record Q1 profit

DUBAI - Commercial Bank of Qatar and Qatar Islamic Bank, two of the country's three biggest lenders by market value, posted record profit in the first quarter as the stock market recovered and economy grew.

Commercial Bank, the bigger of the two, posted its second record profit in three quarters after generating more income from fees, commissions and investments.

Net income in the three months to March 31 surged 64 percent to 436.4 million riyals ($119.9 million), or 2.4 riyals per share, from 266.43 million riyals, or 1.46 riyals per share, the bank said.
At Qatar Islamic, profit surged 69 percent to a third consecutive record of 455.5 million riyals ($125.2 million), or 2.48 riyals a share, compared with 270.2 million riyals, or 1.47 riyals per share in the year earlier period.

"The results are good," Bashar Issa, investment analyst at Dlala Brokerage & Investment Holding said of Commercial Bank. "I expect they will be the best performing bank in Qatar this year. Commissions and fees will drive its growth."

Net fees and commissions surged 38.5 percent to 208.26 million riyals, and profit from investments almost five-fold to 38.8 million riyals, Commercial Bank said. Profit from affiliates jumped almost 68 percent to 47 million riyals.

At Qatar Islamic, net income from lending jumped 54 percent to 254.1 million riyals, and net income from investing activities almost doubled to 353.7 million riyals.

EXPANSION

As in other Gulf states, Qatar's main stock index collapsed in 2006 before starting to recover in the second quarter of last year. The index traded as high as 10,730 points in the first quarter, compared with 7,140 points in the year-earlier period, according to Reuters data.

The economy of Qatar, the world's largest exporter of liquefied natural gas, may grow 9.9 percent this year, according to a Reuters survey of economists in December, compared with an average during the last six years of almost 9 percent.

Commercial Bank owns almost 35 percent of National Bank of Oman and in February raised its stake in Sharjah, United Arab Emirates-based United Arab Bank to 38.2 percent.

Gulf Arab banks have boosted their lending businesses in the world's top oil-exporting region, buoyed by a more than fivefold rise in oil prices in the last six years.

Banks have also been expanding through acquisitions as they face greater competition in their home markets. Commercial Bank said last month it planned to continue regional acquisitions.

Shares of Commercial Bank have risen almost 21 percent this year, about in line with the Qatar banking index. Shares of rival Qatar National Bank -- the country's biggest lender -- have climbed almost 26 percent.

Qatar National posted its biggest profit ever in the first quarter on higher revenue from foreign operations after buying into a Jordanian lender last year.