Qatar and Oman presented stark differences in the way their banking sectors performed during the first three months of 2010.
Net interest income in Qatar grew 19 per cent during the period. The first quarter was a 7 per cent improvement over the fourth quarter of 2009 number, according to a report by Global Investment House.
"A robust topline growth however could not trickle down into an increase in profits due to a sizeable decline in the non-interest income segment," the report said.
"A drop in provisions both on a yearly and, more so, on a quarterly basis nevertheless supported the bottomline which remained unchanged year-on-year and jumped 36 per cent quarter-on-quarter."
Oman's banking sector, however, could not lay similar claims. Despite a 16 per cent year-on-year gain in net interest income, profits recorded a slide by as much as 31 per cent. But dig a little deeper and a slightly different picture emerges.
"This can be attributed to inflated non-interest income for the first quarter 2009 period, particularly on account of Bank Muscat which made large capital gains during the period," the Global report notes.
"Accounting for that, we believe Omani banks would have collectively reported an increase of over 20 per cent in profits for the first quarter. We believe Omani banks will be able to retain benefits from maintenance of the top-line and decrease in provisions during the forthcoming quarters."
