UPDATE 2-Qatar National Bank Q1 profit rises 10 pct

* Q1 net profit 1 bln riyals vs forecast 920 mln

(Adds details, analyst quote)

By Dania Saadi

DOHA, April 8 (Reuters) - Qatar National Bank QNBK.QA (QNB), the country's largest lender, made a first-quarter net profit of 1.0 billion riyals ($275 million), up 10 percent year on year as the bank said it had effectively managed risk.

Net income in the first quarter of 2008 was 917.3 million riyals, the company said in a statement on the Doha bourse Web site.

"Provisioning for loans losses is lower than we had expected and significantly lower than what the market was worried about," said Raj Madha, a banking analyst at EFG-Hermes in Dubai.

"They had good cost control compared to the previous quarter."

EFG-Hermes' forecast in a Reuters survey earlier this month was for net profit of 920 million riyals. Shares in QNB have lost a quarter of their value so far in 2009. [ID:nL2932732]

The Qatari government has implemented a slew of measures since October last year to help local banks weather the economic downturn, including plans to buy between 10 percent and 20 percent of listed banks' capital and listed shares within banks' investment portfolios.

In March, QNB sold about 75 percent of its listed shares investment portfolio to the Qatar Investment Authority, the country's sovereign wealth fund, a person familiar with the portfolio told Reuters.

That sale was worth about 4 billion riyals, from a total 6.5 billion riyals sold to the Qatar Investment Authority by all the country's listed banks, the source said.

QNB, in which Qatar's sovereign wealth fund owns a 50 percent stake, did not sell any additional stakes to the fund after the announcement of the proposed stake sales in October.

The bank's net operating income rose 9 percent to 1.3 billion riyals, mainly due to higher net interest income and income from financing activities.

Its total assets grew 8 percent to 140.6 billion riyals, while loans, advances and financing activities rose by 5 percent to 81.6 billion riyals.

QNB operates in 22 countries besides Qatar, spanning Iran to Singapore, either through branches or stakes in banks.

It has a 50 percent stake in the Tunisian-Qatari bank and bought a 23.8 percent stake in the United Arab Emirates-based Commercial Bank International CBI.AD. It has a 33.2 percent stake in Jordan's Housing Bank for Trade and Finance THBK.AM. (Additional reporting by John Irish in Dubai; Editing by Sam Cage and Andrew Macdonald) ($1=3.638 riyals)