The profit increase would have been even more impressive but for a doubling in the level of provisioning for impairment of loans and advances to QR 64 million ($18 million).

Income statement figures clearly show that QNB was a nimble exploiter of the declining interest rate environment prevalent last year, and was able to protect its spreads. Net interest income increased by 10 per cent, though some of the increase might be the result of a seemingly aggressive readjustment of the bank’s balance sheet. Lending levels were sharply up year-on-year and, at the end of 2001, QNB’s loans/deposits ratio had climbed to 89 per cent from 75 per cent at the end of 2000.

QNB was also successful in sharply raising its non-funded income: other income was up 22 per cent year-on-year. The development of a strong in-house project finance capability will have contributed to the hike in fee income. During 2001, the bank lead arranged four major project finance transactions.