QNB announces financial results for first quarter of 2007

The Bank achieved net profits for the first quarter of QR652.8 million, up QR41.2 million (6.7%) on the QR611.6 million delivered in 31st March 2006. Total operating income increased by QR182.6 million (26.4%) to QR874.8 million. The increase in total operating income is mainly due to the increase in net interest income and income from financing activities of QR80.8 million (19.7%) to reach QR490.8 million.

Net Fees and ccommissions grew by QR64.2 million (49.5%) to QR194.1 million. At the same time, dividend income grew by QR27.9 million (38.6%) to QR100.1 million, reflecting high dividend distribution of the Bank's Doha Securities Market (DSM) equity portfolio.

Total assets grew since 31st March 2006 to QR70.0 billion, representing an increase of QR12.7 billion, or 22.1%. Loans and advances grew to QR47.2 billion, representing an increase of QR13.8 billion, or 41.5%. Customer Deposits and unrestricted investment accounts also grew by QR7.2 billion (15.8%) during the period to reach QR52.7 billion.

Total shareholders' equity at 31st March 2007 amounted to QR8.1 billion (US$2.2 billion), with total market capitalization of the Bank's share reaching QR26.2 billion (US$7.2 billion). As a result of the improvement in the Bank's performance, Interim earnings per share increased from QR3.8 in 31st March 2006 to QR4.0 in 31st March 2007.

Al Watani Al Islami also succeeded in achieving excellent results during the first quarter of 2007, with total assets reaching QR7.6 billion, up by QR2.3 billion (44.0%) since 31st March 2006 mainly due to the increase in financing activities by QR1.8 billion (172%) to reach QR2.8 billion. Current customer deposits and unrestricted investment accounts grow by QR2.2 billion (42.7%) to reach QR7.3 billion. Net profit for Al Watani Al Islami was up by QR17.6 million (115%) to reach QR32.9 million.

H.E. the Chairman added:

"Our strategy to expand the array of activities and products is clearly bearing fruit; given the strong start of the year marked by the set of financial results for the first quarter. Indeed, such consistent growth and outstanding financial performance is a reinforcement of QNB's leading position. Given our plans to continue expanding different businesses going forward, we remain optimistic about the Bank's performance in the years ahead."

Mr. Ali Shareef Al Emadi, QNB's Acting Chief Executive said: "For both our customers and shareholders, QNB will continue to stand steadfast in the achievements it promised to deliver during the General Assembly's meeting held last February. This was confirmed by the leading role the Bank key role as the main bank and financial advisor for Qatar telecommunication (Q-tel) in acquiring 51 percent shares of the National Mobile Telecommunications Company (Watania Telecom) in Kuwait valued at QR 13.5 billion, the largest transaction in the history of the region. It is also reflected opening of new branches and launching of new innovative products and services; and our shareholders can be assured that we will embrace a laser-sharp focus on maximizing returns on our investments."

"During the first quarter, QNB made significant strides in Corporate and Retail Banking; most evidenced by its strategy to update the governmental institutions and enhance their capabilities, since the bank continued its successful cooperation strategy with the governmental departments to replace the cash collecting system with POS and e-cash card. QNB was also the first bank to launch the electronic Initial Public Offering service (e-IPO), which facilitates the fastest and easiest IPO application process for the new local companies."

The bank seizes this opportunity to reiterate its commitment towards its shareholders and customers in continuing the strong record of growth it has been witnessing for the past years, as reflected in its financial results as well as in the services it has been offering to its customers.

In its quest to keep up with the growing demand for Islamic banking products and services, QNB opened four new branches for its Islamic operations wing, QNB Al Islami, all serving Islamic Shari'a-compliant products and services for both individuals & institutions at various locations in Qatar. The bank also witnessed yet another addition to its Islamic wing with the opening of a new office at Qatar National Olympic Committee's building (QNOC). In line with its continuous efforts to expand its distinguished banking services and enhance its international presence, the bank also opened a full services branch in the Omani capital as well as an office at Qatar Telecommunication (Q-tel) headquarters.

Selected as the official sponsor for various prestigious events taking place in Qatar confirms the leading position of QNB. During the year 2007, the bank sponsored the Tenth Annual Meeting of Middle Eastern and North African Bank Chief Executives, in cooperation with the Institute of International Finance (IIF), which was attended by a large number of officials and representatives of Middle Eastern and North African leading financial institutions and banks. Furthermore, the bank was the gold sponsor for MEED non energy projects conference and the sponsor for Tasmeem 2007- Doha, as well as the sponsor for the 6th Doha Cultural Festival.

In line with its strategy to strengthen its relations with the leading companies in the State and its contribution to the growth and development of the Qatari economy, in particular the gas and oil sector, QNB signed with Future Pipes Industries, a financing agreement worth QR 288 million in order to finance the projects of the company in Qatar. The bank also signed a Memorandum of Understanding with The Land Investment & Real Estate Development Company that will help finance individuals interested in purchasing residential units; the company is building at The Pearl -Qatar. This agreement has been signed at a time when the importance of owning a home gains more significance within a rapid growing economy.

As further evidence to its strategic partnership in the economic ventures emerging in the country, QNB signed a share allocation agreement with Al-Meera Hypermarket Chain, another significant initiative towards supporting the thriving local economy. Moreover, the bank managed the payment process of the remaining amounts of the shares of Qatar Gas Transport Limited (NAKILAT) and offered exceptional financing benefits to shareholders, regardless of whether they are QNB customers or not, through conventional and Islamic banking services.

Keeping up its record in retail services, QNB introduced into the market a host of new products. QNB launched a promotion campaign for its Qatar Airways Co-branded MasterCard Credit Card that enables new applicants for the card to automatically enter in the monthly draws where there are a total of 1 Million Q-Miles to be won. The bank also launched its "Best Lending Deals" campaign covering the Personal, Vehicle and Mortgage Loans, with attractive interest rates and competitive tenor periods. Simultaneously, the bank announced the introduction of Value Added Services for its Credit Card Holders, including Personal Accident Travel Insurance and Credit Card Purchase Protection Cover free of charge. These initiatives fall in line with the banks' continuous efforts to enhance its retail services in order to offer the best deals for its customers.

QNB continued its the priority it grants to its big support to the Qatari sports, since it signed during this first quarter an agreement with the Qatar Tennis Federation (QTF) naming the bank as the Official Bank for the Men's and Women's tours of the Association of Tennis Professionals (ATP) in Doha. The bank signed as well an agreement with Qatar Motor and Motorcycle Federation (QMMF) through which, QNB will be the official sponsor of 2007 sponsorship of Losail National Cup motorcycle racing campaign, in addition to being the official sponsor of the traditional sports in the country, horse and camel racing. These initiatives add to the bank's rich resume of sports involvement in Qatar.

QNB's Ratings

QNB has the highest credit rating among Qatari banks from leading rating agencies including Standard & Poor's, Moody's, Fitch, and Capital Intelligence.

In 2006, three leading rating agencies upgraded QNB's credit rating to become one of the highest in the region. Moody's also rated QNB"S long term foreign currency bank deposit ratings from (A1) to (Aa3), and upgraded the bank's short term foreign currency bank deposit ratings from (P2) to (P1). These ratings constitute the ceiling of the Qatari ratings, which reflects the important performance of the bank in the local banking services.

During this first quarter of 2007, QNB has been the recipient of the Best New product launch Award by GMR as well as the "Best Bank" In Qatar award by Global Finance magazine.
About Qatar National Bank (QNB)

Qatar National Bank (QNB) was established in 1964 as the country's first Qatari-owned commercial bank, with an ownership structure split between the Government of Qatar (50%) and the private sector (50%).

QNB has steadily grown to be among the largest banks in the region and is by far the leading financial institution in the country with a market share approaching 45% of banking sector assets. QNB has the largest distribution network of 38 branches and offices, in addition to 7 Islamic branches, and around 120 ATM's.

QNB international presence is rapidly expanding with new locations in Singapore and Libya, Oman, Kuwait and Yemen, supplementing existing branches in London and Paris and a Representative Office in Iran. The London-based Ansbacher, QNB's Wealth Management and Private Banking subsidiary, operates in Switzerland, Channel Islands, the Bahamas, Dubai International Financial Center and Qatar Financial Center. Ansbacher was the first financial institution to be granted a license to operate at Qatar Financial Centre providing a wide range of wealth management services in Qatar and the region.

QNB offers a full range of retail, corporate, investment, treasury, wealth management, and Islamic banking products and services for individuals, corporate institutions and government entities. QNB is constantly striving to provide intelligent banking solutions and its range of products and services, and delivery channels across all disciplines continues to be unrivalled.

Through its affiliate, QNB Al Islami, QNB was the first commercial bank in Qatar to offer Islamic Banking products and services, and the first Qatari bank to launch equity funds (Al Watani Funds) for companies listed in the Doha Securities Market.

QNB has the highest credit rating among Qatari banks from leading rating agencies including Standard & Poor's, Moody's, Fitch, and Capital Intelligence. The Bank has also been the recipient of the "Best Bank in Qatar" Award from leading international specialized financial publications.

QNB has an active community support program and sponsors various social, educational, and sports events.

The Bank is the official sponsor of the four major sports in Qatar which include Football, Basketball, Handball, and Volleyball.