UPDATE 1-Qatar Islamic Bank Q1 drops 14 pct, misses f'casts

Wed Apr 14, 2010 11:01am EDT

Related Topics

* QIB reports Q1 net profit of 300 mln riyals

* Shares fell 1.1 pct before results announced

(Adds analyst's comment, detail, background)

DOHA, April 14 (Reuters) - Qatar Islamic Bank QISB.QA (QIB), the Gulf state's second biggest lender by market value, reported a 14.3 percent drop in first-quarter earnings, missing analysts' expectations.

The bank made a net profit of 300 million riyals ($82.46 million) in the quarter, down from 350 million riyals a year earlier, it said in a statement on the bourse website.

Analysts polled by Reuters had expected an average quarterly profit of 377 million riyals. [ID:nLDE63A03M]

Earnings per share fell to 1.43 riyals from 1.74 riyals in the same period in 2009, the statement said without giving detailed results.

In December, Qatar Islamic said it had exposure to a Dubai World [DWLD.UL] Islamic bond maturing in 2017 worth 54 million riyals. Dubai World has said sukuk holders would be paid in full, pending agreement over its restructuring plan.

"QIB was hurt by large provisions last year, but we expect provisions will be reduced this year. We're waiting for more detailed numbers, but generally QIB and all other Qatari banks will benefit from the economic boom in Qatar this year," said Khalid al Sahli, analyst at Kuwait's Global Investment House.

Other Qatari banks have reported robust earnings so far this quarter. Qatar National Bank QNBK.QA, among the first Gulf Arab banks to disclose first-quarter results, posted a 25 percent rise in first-quarter net profit on increased lending and Islamic banking activities.

Qatar's Masraf al Rayan MARK.QA reported a 44 percent increase in quarterly profit.

Qatar's sovereign wealth fund took a second 5 percent stake in QIB's capital in December 2009 as part of measures by the Qatar Investment Authority (QIA) to buy 10 percent to 20 percent of listed banks' capital to shore up the banking sector.

QIB shares closed 1.1 percent lower on Wednesday before the results were issued. ($1=3.638 riyals) (Reporting by Regan E. Doherty; Editing by Firouz Sedarat and Simon Jessop)

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