Qatari lender Masraf Al-Rayan expects its fourth-quarter profit to exceed the third quarter and will push ahead with its expansion strategy, the bank's chief executive said.

Adel Mustafawi said the Islamic lender was looking to grow organically and through acquisitions, focusing on the Gulf region and Asia, especially in the real estate and industrial sectors where he saw 'good prices'.

Masraf posted a net profit of QR214.14 million ($58.9 million) in the third quarter, down 52 per cent on a year ago.

Mustafawi said Qatar's fourth-largest lender by market value would benefit in the fourth quarter from closing a $445 million advisory deal for Gulf Bridge International (GBI), which is building an undersea cable to provide high-speed connectivity between the Gulf, North Africa and Europe.

'We are still going to see balanced growth in the asset and liability side - that's going to result in higher profitability,' Mustafawi told Reuters in an interview.

'The margin has increased with us which helps us achieve good profit in the next few months.'    

Fuelled by an almost four-fold rise in oil prices since 2002, lenders in the Gulf region have also being expanding overseas as they face increasing saturation in home markets.

'We have to maintain our strategy to grow beyond Qatar and that's going to happen through acquisitions and growth,' Mustafawi said.

The bank, which will increase its branch network at home to 12 in 2010 from five, sees expansion through its core banking business and investments in the industrial and property sectors in the Arab World and Asia.

'We are bringing a lot of investors from Asia to (the Gulf area) and we are going to take a lot of investors (from the Gulf) to Asia,' he said.

The lender, which said in 2008 it wanted a representative office in Libya, is hoping to open the office in the North African Opec oil exporter early next year, although acquiring a full banking licence was difficult for an Islamic bank.

Masraf will expand its business in top oil exporter Saudi Arabia, where it operates through Kirnaf, in which the bank holds a majority share and eventually aims to convert into a bank within three years.

'Saudi is the number one country in the Arab world in terms of GDP and size of economy ... and there is a commitment of the government to spend money in the economy.'    

The three-year old bank is arranging an Islamic bond sale for the first quarter of next year. 'We are finalising this issue, to be a lead arranger for a regional sukuk issuer for $300-$500 million,' he said.

'It's a company in the real estate sector with excellent cash flow (and is) profitable,' he added, declining to identify the borrower.

Masraf's investment banking unit, Al-Rayan Investment, is also set to announce an equity fund for the Gulf region.-Reuters