Doha Bank had a good year in 2011, but will the Qatari lender run out of steam in the months ahead?
It was buoyed last year by the country's moves to prepare its infrastructure for hosting the 2022 Fifa World Cup, lifting its profit 44.9 per cent to 230.4 million rials.
But the bank's shares have barely budged since the start of the year, and analysts have warned that Doha Bank may be too thinly capitalised to support its loan-growth targets.
JPMorgan downgraded Doha Bank to "neutral" this month, trimming its target share price by 8.4 per cent to 76 rials.
The bank's capital adequacy ratio is expected to fall to 12 per cent by next year, which the country's central bank has advised should be the minimum level.
"We see Doha Bank's ambition to strategically use the opportunity of robust Qatari economic growth for asset book expansion and enhance its international network by making an [emerging market] acquisition, being constrained by a relatively limited capital base," analysts from JPMorgan wrote in a research report.
Doha Bank has three options, the note said: cut the dividend; attempt a rights issue; or sell its Islamic banking business.
"We believe increasing focus on capital could make the stock take a breather in 1H [the first half of] 2012," the note added.
While the bank produced decent levels of loan growth during the fourth quarter, that has not always been the case, said Raj Madha, a financial analyst at Rasmala Investment Bank.
"It's getting difficult for them to maintain any sort of level of growth in 2012 without running close to regulatory minimums," he said.
Doha Bank's ambitions to expand internationally, particularly in India, were yet to yield significant results, Mr Madha added.
"We remain to be convinced that they can become a serious player on the international stage outside of Qatar," he said.
"I wouldn't expect Doha Bank would be among the first tier of financial entities to get one of the new banking licences in India once they are issued."
twitter: Follow our breaking business news and retweet to your followers. Follow us