With most of the major GCC banks now having released financial results for the first half of 2005, the story continues to be one of soaring profits and strong asset growth on the back of booming economies.The rising income has been in some cases spectacular. At both National Bank of Abu Dhabiand Abu Dhabi Commercial Bank, profits climbed by more than 100 per cent, while at Emirates Bank Groupthe rise was scarcely more modest at 77.5 per cent. The increasingly dynamic Qatar National Bank (QNB)similarly grew profits by more than 70 per cent, reaping the rewards of its increasing activity in project and Islamic finance. Banks going regional, whether organically or through acquisitions, are evidently finding the move a lucrative one: National Bank of Kuwait, now with assets in Iraq and Qatar and a licence to operate in Saudi Arabia, increased net earnings by 51 per cent; Bank Muscat, also with a licence in Saudi Arabia and operations in Bahrain, saw profits rise by 41 per cent; and Ahli United Bank, one of the pioneers of a regional strategy, posted 25.1 per cent income growth. QNB’s local rival, Commercial Bank of Qatar – where profits were up by 81 per cent – is also looking aggressively abroad, concluding in late July the acquisition of a 34.9 per cent stake in National Bank of Oman. Avowedly regional banks Arab Banking Corporation (ABC) and Gulf International Bank (GIB)also had a good start to the year. The streamlined ABC reported a 19.6 per cent growth in income, while GIB managed a 70.2 per cent hike, benefiting from the GCC’s busy project finance scene. A rise in fee income, counterbalancing the impact of low interest rates, is a feature of balance sheets across the board (Banking, MEED Special Report, 17:6:05, pages 29-33). Saudi Arabia’s banking heavyweights are naturally profiting handsomely from the oil-induced boom. The four biggest in asset terms, TheNational Commercial Bank, Samba Financial Group, Riyad Bankand Arab National Bank (ANB)increased first-half net income respectively by 39, 51, 58 and 55 per cent. ANB exemplified the move to diversify revenue streams: fee income was up by 53 per cent. The local players appear sufficiently strong to withstand both the appearance of a new player on the scene – the recently launched Bank Albilad– and the full implementation of the Capital Market Law, the remaining provisions of which were issued in late July (MEED 22:7:05).