Qatar Islamic Bank (QIBK) SAQ, the Persian Gulf country’s biggest Shariah-compliant lender, posted a 27 percent jump in second-quarter profit, topping analysts’ estimates, as income from investments increased.
Net income rose to 382 million riyals ($105 million) from 301 million riyals a year earlier, the bank said in an e-mailed statement today. The average of five analysts’ estimates was 361 million riyals, according to data compiled by Bloomberg.
First-half investment income rose to 311 million riyals from 48 million riyals a year earlier, according to the statement. Net financing income fell to 863 million riyals from 906 million riyals and fee income dropped to 125 million riyals from 186 million riyals.
“At first glance this is a mixed set of results, with good profitability, but without strong conviction, and with little in the way of loan growth,” Raj Madha, a Dubai-based analyst at Rasmala Investment Bank Ltd., said in an e-mail today. “I wouldn’t extrapolate this set of results into the future unless we get further details.”
The value of the Islamic loan portfolio fell to 24.7 billion riyals in the first half of the year, from 28.6 billion riyals a year earlier, the bank said in the statement.
Qatar’s central bank in February ordered all conventional lenders to wind down their Islamic banking divisions by year end on concern deposits may go toward Islamic loans. Qatar Islamic may seek to buy Islamic units of conventional lenders, acting Chief Executive Officer Ahmad Meshari said in February.
The bank has faced competition in recent years, with the establishment of Masraf Al Rayan and Barwa Bank. The lender, which has about 750 employees, recently hired more than 50 people, having made a somewhat lesser number redundant, to bring in “new blood,” Ahmad Meshari said in an interview May 12.
“The announcement of the results comes on the back of a strategic transformation program that the bank is implementing with a view to restructuring both its local groups and its affiliates abroad,” Jassim Bin Hamad J.J. Al Thani, chairman of Qatar Islamic, said in the statement.
The shares increased 0.3 percent to 78.6 riyals on the Qatar Exchange today before the results were released. The stock has dropped 2.4 percent this year compared with a 3.4 percent fall in the benchmark QE Index. (DSM)
To contact the reporter on this story: Robert Tuttle in Doha at [email protected]
To contact the editor responsible for this story: Stephen Voss at [email protected]