Supported by a more than five-fold rise in oil prices since 2002, profits of Gulf banks have surged on growing demand for credit from state and private investors to finance billions of dollars of infrastructure, real estate and industrial projects.

Faced with growing competition from global players, lenders in the biggest oil-exporting region are turning to consolidation to help them better compete and diversify their revenues. “This strategic stake is to broaden the network of QNB outside of Qatar,” said Andrew Duff, head of international banking at QNB, the biggest bank in Qatar, the world’s biggest exporter of liquefied natural gas.

Qatar National bought 297.69 million shares, or a 23.77% stake, in Commercial Bank at 3.70 dirham per share. The stock, listed in Abu Dhabi, soared 7.72% to 3.66 dirham Wednesday.

“In a country like the UAE booming as it is, everyone would like to participate in what’s going on in the country,” said Alfred Fayek, director of EFG-Hermes’ Gulf institutional desk. “Some big-name banks would like to come here but they can’t get licenses. It is better to buy a small bank.” Commercial Bank operates 12 branches in the UAE.

The Gulf state’s economy is expected to expand 7.9% this year in real terms, according to analysts polled by Reuters in July. Some 45 banks operate in the country of 4.5 million people, according to central bank data. The biggest, Emirates NBD, operates 115 branches – itself resulting from the merger of Emirates Bank International and National Bank of Dubai last year.

QNB chief financial officer Ramzi Marie said QNB had no immediate plans to increase the stake. The bank’s prof