Commercial Bank of Qatar (CBQ), the country’s second-biggest lender by assets (and third by market value), advanced to 83.9 riyals yesterday on news of the Fed’s larger-than-expected $600 billion in Treasury securities purchase order, which along with roughly $300 billion of reinvestment of maturing assets will take the central bank through next June.  “Qatar’s market is reflecting what happened globally,” Haissam Arabi, CEO of Dubai-based asset manager Gulfmena Alternative Investments, told Bloomberg. “It will continue an upward trend.”  Per expected, Qatar’s bank have responded in kind with the economy at large, which is expected to grow roughly 18% this year in real terms after 9% growth in 2009 (see graph, right).  Against this backdrop, per its 1H2010 results public sector loans and advances grew 4% while customers’ deposits grew by 16%; furthermore, the non-performing loan ratio, on a 90 day basis, fell to 2.67% from 3.56% from year-end 2009.  The bank remains well capitalized (its capital adequacy ratio of 19.2% is well above the Qatar Central Bank’s required minimum level of 10%).  Looking ahead, the bank’s conservative risk management (loan loss coverage of 161%) and initiative towards lowering expenses (cost to income ratio fell 300 basis points) should help CBQ continue to grow.  Yet Bank Audi sal in Lebanon reiterates that long term “a thorough steering of the economy to avoid bubbles related to overheating conditions, a progress in economic diversification away from the oil and gas sector, along with a further improvement of Qatar’s institutional profile, would constitute key success factors for the country’s growth and development trajectory at large.”

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