CBQ’s IDRs are support-driven, reflecting Qatar’s strong economic fundamentals and the extremely high probability of external support available to the bank from the Qatari authorities in case of need.

Fitch’s view of support is based on CBQ’s systemic importance as Qatar’s second-largest lender/deposit taker and the authorities’ strong history of support for the banking system as demonstrated by recent support measures.

The Individual Rating reflects CBQ’s strong commercial franchise and its improving financial profile due to stronger capitalization, consistent profitability and good balance sheet liquidity.

It also considers high sector and name concentrations in both loans and deposits.

Impaired loans declined marginally over 2010 with CBQ’s NPL ratio at 3.2 percent at end-2010.

Whilst this shows some improvement in asset quality, Fitch is concerned that the ratio has benefited from higher levels of restructured lending during the year.

Nevertheless, Fitch believes that a reviving Qatari economy and improving business confidence and activity could translate into better asset quality in 2011.

CBQ is well-capitalized.

In Q111, the bank received QAR1.6bn from the government as the third and final tranche of regulatory capital support plan for domestic banks. The state’s direct shareholding in the bank is now 16.7 percent.

Established in 1975, CBQ is Qatar’s second-largest bank.

The bank is listed on the Qatar Exchange and its GDRs are listed on the London Stock Exchange.

CBQ holds strategic stakes in National Bank of Oman (35 percent) and UAE-based United Arab Bank (40 percent).