Wednesday, 14 July 2010 at 16:46, Reuters, Doha
Second quarter profit at Qatar Islamic Bank (QIB) fell more than a third on Wednesday, blamed by an analyst on a drop in investment income and an increase in provisions against bad debts.
The Gulf state's second-largest lender by market value earned 301m Qatari riyals ($82.74m), according to Reuters calculations, missing analysts' expectations and down 35 per cent from 462.4m a year earlier.
Analysts polled by Reuters on average expected a quarterly profit of 373m riyals.
A bank statement gave no separate detail about second-quarter operations.
"The decline was for two reasons: a drop in investment income, mostly from property-related investment," said an analyst at Bahrain-based SICO who asked not to be identified.
"The second was probably an increase in provisions, likely from non-performing loans."
"Overall, I am positive on the bank. In the past they have relied a lot on the property sector, but they are diversifying, moving into Europe. Going forward, with a diversified profile, they should be fine," he added.
QIB reported a net profit of 601m riyals ($165m) in the first half of 2010, compared with 812.6m in the same period last year.
The company plans to increase its branch network from 26 to 35 by 2012, it said.
QIB has agreed with French banking group Banque Populaire Des Caisses d'Epargne (BPCE) to promote Shariah-compliant products in France, the bank said.
The two banks will explore offering Islamic products such as sukuk for large French corporate or institutional clients and co-operating in project finance.
In December, Qatar Islamic Bank said it had exposure to a Dubai World Islamic bond maturing in 2017 worth 54m riyals. Dubai World has said sukuk holders would be paid in full, pending agreement over its restructuring plan.
Qatar's sovereign wealth fund took a second 5 percent stake in QIB in December, 2009 as part of measures by the Qatar Investment Authority (QIA) to shore up banks.
QIB shares closed up 1.5 per cent 74.7 riyals on the Qatar bourse before the results were released.
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