Qatar Islamic Bank (QIB) has reported a 22% jump in its January-September 2011 net profit to QR1.11bn mainly on its robust core earnings and lower impairments on its credit and investment portfolios.
Net income from financing was down 6% to QR1.36bn, while that from investments jumped about nine-fold to QR499.71mn. Thus, its total net financing and investment income rose 24% to QR1.86bn, according to its financial statement filed with the Qatar Exchange.
Net commission and fee income were down 7% to QR200.28mn. Although the bank reported foreign exchange loss of QR14.78mn against gains of QR19.96mn in the year-ago period, its net operating income gained 19% to QR2.05bn.
“The announcement of the results comes on the back of a strategic transformation programme that the bank is implementing with a view to restructuring both its local groups and its affiliates abroad in order to build a strong banking group with regional and international presence that meets the expectations of its shareholders, customers and strategic partners,” QIB chairman Sheikh Jassim bin Hamad bin Jassim bin Jabor al-Thani said.
General and administrative expenses shot up 56% to QR473.36mn even as net impairment losses on receivables from financing plunged 38% to QR60.52mn and those on financial investments by 34% to QR12.09mn.
‘Unrestricted Investment Account’ (URIA) holders’ share of profit was QR285.02mn compared to QR376.17mn in January-September 2010 and “this is a testament to QIB’s balanced funding strategy and the continued support and confidence of the bank’s customers,” he said.
Total assets were valued at QR52.76bn, comprising receivables and balances of QR26.86bn from financing, financial investments of QR15.10bn, dues of QR5.52bn from and investment with banks and financial institutions, cash and balances of QR1.62bn with Qatar Central Bank, other assets worth QR1.56bn and other investments of QR1.13bn.
The return on average assets in the nine-month period stood at 3%.
Domestic financing represented 98% of its overall portfolio, which indicated a high level of immunity from adverse global economic changes as well as the range of and diversity of the financing products offered to customers, a QIB spokesman said.
Total shareholders’ equity stood at QR10.91bn on a capital base of QR2.36bn and earnings-per-share was QR4.81 at the end of third quarter ended September 30, 2011.
Reuters adds: QIB is said to be planning to raise between $500mn to $1bn via a sukuk sale.
The lender pulled out of a deal to buy a majority stake in Indonesian Islamic lender PT Bank Muamalat, banking sources said in July.
Qatar’s central bank has ordered conventional banks to stop offering Islamic banking services by year-end, a move seen as boosting Islamic lenders in the Gulf state.
Banks in Qatar are expected to benefit as the country is one of the world’s fastest growing economies – GDP grew as much as 41.8% in the second quarter – and is set to spend more on infrastructure as it prepares to host the 2022 World Cup.
QIB shares traded at QR79.90 before the results were announced.