The first-half results reporting season has begun. A number of big-hitting regional banks have posted healthy profits, allaying concerns that exposure to falling stock markets would have a
serious impact on bottom lines.

The most punctual reporting was in Saudi Arabia, where most banks have released robust first-half financials. Bank Aljazira, one of the most exposed to the equity markets, announced profits of $357.3 million, a 430 per cent increase compared with the same period in 2005. The Saudi Investment Bank reported equally strong H1 profits of $367.7 million, a 181 per cent rise. The trend continued at Banque Saudi Fransi, which recorded profits of $449 million, a 68 per cent increase, and SABB, where profits were up by 51 per cent to $482 million over the period. At the largest bank in the kingdom, The National Commercial Bank, profits rose by 37 per cent, totalling SR 3,339 million ($890 million).

The bullish performance was repeated in Doha. Qatar National Bank announced a profit increase of 57 per cent on the first half of 2005 to QR 1,105 million ($303 million), while first-half profits at Commercialbank totalled a record QR 443 million ($121.7 million), up by 36 per cent.

The first banks to report in Kuwait and Bahrain also showed strong earnings. National Bank of Kuwait reported record profits of $447 million, up 32 per cent, while National Bank of Bahrain saw an 11 per cent increase in first-half profits to BD 18.5 million ($49 million). Bucking the trend was National Bank of Abu Dhabi, the only UAE bank to report so far. It announced preliminary profits of AED 1,130 million ($307 million), a drop of 15 per cent on the same period last year.

Some analysts have cautioned against reading too much into the first-half results. 'Some of the biggest stock market gains were achieved in the second half of last year and it is difficult to see those repeated this year,' said one.