UPDATE 1-QIB Q1 profit gains 7 pct, below analyst forecast

Wed Apr 13, 2011 8:08am EDT

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* Q1 profit up 7 pct missing forecasts

* Shares closed at 83.60 riyals

DOHA, April 13 (Reuters) - Qatar Islamic Bank QISB.QA (QIB) posted a 7 percent jump in first quarter net profit on Wednesday, missing analysts forecasts, as net financing income gains were offset by a drop in fee income.

The Gulf state's second-largest lender by market value earned 321 million riyals ($88.16 million) , up from 300.1 million riyals a year earlier.

Analysts on average had forecast quarterly profit of 344.33 million riyals, according to a Reuters poll. [ID:nLDE73A1BD]

Net financing income climbed 8.6 percent to 457 million riyals but fee income fell 21.7 percent from a year ago to 65 million riyals.

The bank's investment portfolio surged 261 percent to 16.6 billion riyals due to a risk-free investment in government Islamic bonds.

QIB invested 1.25 billion riyals in a sukuk last June issued by the Qatar Central Bank on behalf of the government to boost the domestic bond market. [ID:nLDE65J016]

The lender also launched a $750 million Islamic bond in late September, part of a spate of debt issues across the Gulf region.

Banks in Qatar are expected to benefit as the world's fastest growing economy spends more on infrastructure in preparation of its plans to host the 2022 World Cup.

Shares in QIB closed up 0.84 percent at 83.50 riyals before the results were released. ($1=3.641 Qatar Rial) (Reporting by Shaheen Pasha; Editing by X)

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