Qatar Islamic Bank Q2 Net Profit Drops 2.9%

Qatar Islamic Bank (QIB), the Gulf Arab state’s largest sharia-compliant bank by assets, reported a 2.9 per cent drop in second-quarter net profit on Tuesday.

Net profit for the three months to June 30 was 339 million riyals ($93.1 million), it said in a bourse filing, versus a profit of 348.9 million riyals in the second quarter of 2012.

Despite the fall, the earnings beat estimates of seven analysts polled by Reuters who had on average expected a net profit of 324.8 million riyals.

QIB did not elaborate on why earnings fell.

Its net profit for the first half of 2013 was 630 million riyals, down from the 737 million riyals in the corresponding period of last year.

QIB had already reported a 25 per cent slump in first-quarter net profit in April.

The fall in profit comes in contrast to Qatar National Bank , which posted a 23.8 percent surge in second-quarter profit on strong loan growth.

Total assets at QIB grew 17.2 per cent to 74 billion riyals from the second quarter of 2012, the statement said. Customer deposits grew 38.3 per cent in the same period.

Last October the bank returned to global debt markets after two years with a $750 million sukuk sale, tapping into strong liquidity for regional issuers.

“We believe the bank will tap the market with new sukuk,” QNB Financial Services said in a research note on Tuesday.

QIB and Commercial Bank of Qatar have asked Qatar Exchange to increase the number of their shares available to foreign investors to 25 per cent of their market capitalisation, Qatar’s stock exchange said last month, with the changes due to be implemented in six to nine months.

The announcement came before index compiler Morgan Stanley Capital International (MSCI) decided to upgrade Qatar to emerging market from frontier status.

Banks in Qatar are expected to benefit as the country, one of the world’s fastest growing economies, spends billions of dollars on infrastructure as it prepares to host soccer’s 2022 World Cup.