Qatar National Bank's foreign currency ratings raised

The support rating of 1 is affirmed and reflects the State's 50% share-holding in QNB.

Qatar's economy continues to expand and diversify, based on the platform of its huge hydrocarbon resources. The government's financial position continues to improve. CI raised the State of Qatar's sovereign ratings in January 2008:- foreign currency long-term to AA- and short-term to A1+.

QNB vigorously expanded its loan portfolio in 2007. However capital adequacy remained strong, boosted by a rights issue, although dipping in Q1 2008. QNB has not issued any subordinated loan stock. Liquidity is also satisfactory, with firm growth in customer deposits, including unrestricted Islamic investment accounts. QNB accessed the international markets for a substantial syndicated bullet term loan. Gross income grew briskly due to vibrant expansion of the loan and Islamic financing portfolio, offset by a lower interest differential. Operating profit benefited from sound control of costs in an inflationary environment. Although recoveries of earlier loan-loss provisions were lower, QNB once again achieved record net profits in 2007.

Going forward, QNB's investment in expanding its international network and activities should contribute to lifting the Group to the next level as a powerful regional player. Building this into a profitable business will complement QNB's dominance of its domestic market and diversify the sources of its earnings.