January 16, 2018 / 1:15 PM / a year ago

Qatar's Masraf Al Rayan reports 9.6 pct fall in Q4 profit

DUBAI, Jan 16 (Reuters) - Masraf Al Rayan, Qatar’s second-largest bank by market value, reported a 9.6-percent drop in fourth-quarter net profit on Tuesday, according to Reuters calculations, missing analysts’ expectations.

Net profit for the three months to Dec. 31 was 466 million riyals ($128 million) compared to 515.6 million riyals in the same period a year ago, Reuters calculations showed, using financial statements in lieu of a quarterly earnings breakdown.

An average of three analysts polled by Reuters had forecast the bank would make a net profit of 562.5 million riyals.

It was the second major bank to report earnings for the quarter after Qatar National Bank, which reported a 5.2 percent increase in fourth-quarter net profit, missing two analysts’ forecasts as provisions for bad loans jumped.

Qatar banks have had to diversify funding sources since banks from some neighbouring Arab countries pulled out funds in response to a regional diplomatic crisis. Still, Qatar’s economy has generally weathered the dispute and banks should gain support in 2018 as the government moderately ramps up spending.

Masraf Al Rayan said its board was recommending a dividend for 2017 of 2 riyals per share, the same level as the previous year.

In a deal that would create Qatar’s second-largest bank, Masraf Al Rayan is in initial merger talks with Barwa Bank and International Bank of Qatar.

For the full-year of 2017, the sharia-compliant bank posted net profit of 2.03 billion riyals, lower than the 2.08 billion riyals it reported the previous year. ($1 = 3.6415 Qatar riyals) (Reporting By Tom Arnold; Editing by Andrew Heavens)

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