All but one of Qatar's major banks saw a drop in investment returns on their assets last year compared to 2006 levels, said Global Investment House.
Qatar National Bank saw returns on assets fall to 2.7 per cent in 2007 from 3.3 per cent in 2006, while Qatar Islamic Bank dropped to 6.9 per cent from 8.2 per cent two years ago.
Commercial Bank of Qatar is the only bank to record returns on its assets last year as it improved from 3.3 per cent in 2006 to 3.7 per cent in 2007. For return on average equity, Commercial Bank, Doha Bank and Ahli Bank reported improved returns in 2007 while Qatar National Bank, Qatar Islamic Bank and Qatar International Islamic Bank reported decline in their returns, Global Investment House's latest economic and strategic outlook report said.
Qatar Islamic Bank posted the highest returns on equity and also on assets as it reported 32.2 per cent and 6.9 per cent respectively.
In quarter one of 2008, the aggregate assets of all the listed banks witnessed a year to date growth of 15.1 per cent to QR290.4 billion ($79.7bn) from QR252.4bn at the end of 2007.
The combined net profit of the banks under review grew by 54.2 per cent year on year in quarter one of 2008, from QR1.6bn at the same time last year to QR2.5bn.
Kuwait-based Global Investment House said in 2007 the combined balance sheet of all Qatari listed banks grew by 61 per cent in 2007 to QR252bn from QR157bn in 2006.
"The economy of Qatar is registering a strong growth over the past few years and on the back of this, activities are flourishing in almost every sector of the economy and banking sector would be one of the major beneficiaries of this economic boom," the report said.
"Over the past few years, banks in Qatar have extensively focused on improving their quality of assets which resulted into substantial improvement in the quality of their loan portfolio. We believe that going forward quality of the loan book are likely to remain sound, however, steep growth in loan book needs to be watched with caution."