QIB’s net profit dips 3.5% in third quarter

REUTERS

DOHA

QATAR Islamic Bank (QIB), Qatar’s second-largest lender by market value, posted a 3.5 percent drop in third-quarter net profit on Wednesday as a big jump in provisions impacted quarterly earnings.

The bank made a net profit of QR393.1 million ($108 million) in the three months to September 30, compared with 407.2 million riyals in the same period a year ago, according to Reuters calculations.

This beat the average forecast of three analysts, who expected the bank to make a quarterly profit of 389.7 million riyals.

Higher provisioning was the main drag on quarterly earnings, with the bank setting aside QR298 million versus QR73 million in the year-ago period, a statement from the bank said.

QIB’s nine-month net profit rose 2 percent over the corresponding period of 2011 to QR1.13 billion, the statement added.

Total assets grew 26.7 percent year-on-year to QR66.8 billion at the end of September, the statement said, while customer deposits jumped 50 percent in the same period to QR39.9 billion.

Net operating income for the third quarter grew 20 percent compared to last year to QR2.46 billion, reflecting the strong growth in the bank’s core operating activities, the statement added.

The lender returned to global debt markets at the beginning of October after a two-year absence with a $750 million Islamic bond sale, tapping into strong liquidity for regional issuers.

It priced a five-year sukuk at a profit rate of 2.5 percent, and a spread of 175 basis points over midswaps, tighter than the earlier guidance after strong investor interest.

Earlier this month, Qatar National Bank, the first major regional lender to report earnings and considered a bellwether for the sector’s performance, posted a 10.5 percent jump in thirdquarter profit.