QNB's interim results for the six months ended 30 June 2008

Highlighting the details of June 2008 financial results, H.E. the Chairman stated that net profit reached a record QR1,857m, up QR651.7m (54.1%) on the QR1,205m delivered in June 2007. Total assets grew since June 2007 to QR152.6bn, representing an increase of QR77.0bn, or 102%. Loans and advances and financing activities grew to QR84.3bn, representing an increase of QR31.6bn, or 60.0%. Customer deposits and unrestricted investment accounts also grew by QR45.5bn (85.9%) during the period to reach QR98.5bn.

Net operating income increased by QR760.3m (46.0%) to QR2,413m, with a substantial increase in most sources of income. Net interest income and income from financing activities increased by QR245.2m (24.9%) to reach QR1,232m.

Net fees and commission income increased by QR147.2m (41.1%) to QR505.1m, reflecting the success in diversifying sources of income. At the same time, dividend income grew by QR18.2m (15.6%) to QR135.2m, and net gains from dealing in foreign currencies grew by QR53.6m (51.0%) to QR158.6m.

Total equity at 30 June 2008 amounted to QR19.0bn, with total market capitalization increasing by 57% since June 2007 to reach QR55.3bn. As a result of the improvement in the Bank's performance, Interim earnings per share increased from QR6.2 in June 2007 to QR8.0 in June 2008.

QNB Al Islami also succeeded in achieving excellent results during the first six months of 2008, with financing activities increasing by QR2.8bn (89.1%) to reach QR5.9bn. Net profit for QNB Al Islami was up by QR73.7m (95.3%) to reach QR151.0m. QNB Al Islami total assets increased by QR8.5bn (144%) to reach QR14.4bn.

Commenting on the interim results, Mr. Ali Shareef Al-Emadi, QNB's Group Chief Executive Officer, said:

"QNB's results for the first half of 2008 are a reflection of the sustained growth in activities across business lines in Qatar and abroad. QNB will continue its expansion strategy that will see the opening of new locations in the Middle East and North Africa Region in the second half of 2008."

As part of its planned international expansion, QNB acquired 50% of the shares of the Tunisian-Qatari Bank, and laid the Foundation Stone for QNB's Tower in Khartoum, the Sudanese capital, after obtaining regulatory approvals to establish a branch. Also, the Bank entered into a strategic partnership with Kuwaiti companies to establish the Kuwaiti-Qatari Company for Ijara and Investment which will offer Islamic financing services within GCC Countries. QNB also concluded a strategic shareholding partnership in Al Jazeera Islamic Company (AJIC) acquiring 20% of its shares.

QNB's extensive experience of managing IPOs is evidenced by the tremendous faith shown in the Bank's capabilities by leading Qatari companies. Qatari customers and expatriates utilized QNB's electronic channels, EAZYinternet, to subscribe to Barwa Real Estate Company, Qatar Navigation, QTel, Doha Insurance, First Finance, and Qatari German Medical Company share capital increase. QNB was also appointed by Qatar Petroleum (QP) as the Lead Receiving Bank of its IPO for Gulf International Services (GIS) a Qatari shareholding company. Also, the Bank has been selected by Industries Qatar, QTel, Woqod, Barwa Real Estate, Al Meera Co-operative, and Ijara to distribute 2007 cash dividends.

QNB launched EAZYmobile, the first mobile banking service for customers in Qatar. EAZYmobile is an instant, reliable and flexible addition to the widely acclaimed EAZYLife banking services. EAZYmobile provides QNB customers with a wide range of services including bill payments, transfers, statements, news, and much more.

In recognition of QNB's dominant position in the Qatari financial sector, its ability to deliver a strong set of financial results, its strong capitalization and high assets quality, the international credit ratings agency Capital Intelligence raised the Bank's foreign currency rating to AA- from A+ (long-term) and A1+ from A1 (short-term). At A+, QNB's rating from Standard & Poor's is the highest and is on par with a small group of leading financial institutions in the region.

Due to its consistent efforts and innovative strategies over the past year, Retail Banking Division has won QNB the title of "Best Retail Bank in Qatar". This award was accorded to the bank by The Asian Banker at the "The Asian Banker Excellence in Retail Financial Services Awards 2008".

QNB Al Islami launched a new product under the name of "Vehicle Lease" in Qatar, thereby being the first Islamic bank in Qatar to offer it. This will allow the financing of both new and used vehicles at very competitive profit rates which are considered the lowest in the Islamic and commercial banking market in the State of Qatar.

To develop its Qatari resources and to ensure they are well equipped to take on future challenges, the Bank established the new QNB Learning & Development Centre (LDC) to address and meet all present and future training and developmental needs of the Bank's employees.

In order to provide employment opportunities for all eligible Qatari professionals and fresh graduates, QNB held for the second time a Career Day. This event will further increase QNB's Qatarisation ratio, which is the highest in the banking sector.