Qatar’s banking sector substantially improved its financial performance in the first half (H1) of this year mainly due to robust core earnings, which is reflective of the buoyancy of the fastest growing country’s economy.
The cumulative net profit of the eight Qatar Exchange-listed banks registered 25% growth during the January-June period this year against a 10% rise in the corresponding period of the previous year, according to the data collected from the Qatar Exchange.
The banks’ cumulative net profit stood at QR7.38bn and total assets at QR543bn during the first six months of this year.
The surge in profitability came despite the Qatar Central Bank restrictions on personal borrowings by both nationals and expatriates. The banking regulator had capped lending to expatriates at QR400,000 and limited the borrowing for nationals at QR2mn. It has also capped personal loan rates at 6.5%, which according to bank officials, has thinned the net margins.
QNB, the country’s largest lender by assets, reported a 31% growth in their net profit in H1 2011 (against a 30% growth in the year-ago period), Commercialbank 17% (-13%), Doha Bank 14% (-5%), Qatar Islamic Bank 17% (-26%), Ahlibank 28% (8%), International Islamic 18% (7%), Masraf Al Rayan 14% (56%) and al khaliji 122% (3%).
The lenders’ cumulative operating income surged 25% with interest/finance earnings growing by a similar proportion whereas fee and commission income grew slower at 6% during January-June this year. Both Ahlibank and Masraf Al Rayan gave total operating income; while others gave net operating earnings.
QNB has reported a 30% jump in its operating income, Commercialbank (14%), Doha Bank (16%), Qatar Islamic Bank (14%), Ahlibank (20%), International Islamic (14%), Masraf Al Rayan (41%) and al khaliji (56%).
Within the operational parameters, QNB reported a 35% growth in interest income, Commercialbank (8%), Doha Bank (28%), Ahlibank (19%) and al khaliji 58%. In the case of Shariah-principled lenders, Qatar Islamic Bank’s finance income was up 23%; International Islamic (16%) and Masraf Al Rayan (15%).
In the case of net fee and commission income, QNB could register a 5% rise, Commercialbank (6%), Ahlibank (25%), Masraf Al Rayan (433%) and al khaliji (20%); while Doha Bank’s fell 18% and Qatar Islamic Bank (39%).
The cumulative assets of the banks stood at QR542.89bn, of which loan portfolio’s share was 55% or QR300.73bn at the end of June 30, 2011.
In the Islamic financing segment of the conventional lenders, net income from the Shariah-principled route was still on the rise in the case of a majority of the banks but largely on account of the fall in ‘unrestricted investment account holders’ share in the profit’.
QNB’s financial statement gave a consolidated figure for both conventional and Islamic financing.
The net impairment on loans and advances registered increases in the case of QNB, Commercialbank, International Islamic and al khaliji, while that of Qatar Islamic Bank fell. Doha Bank and Ahlibank showed lower provisions for impairment on loans and advances.
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