* Wants to benefit from Qatar growth plans

* Sees prospects in contracty financing, loans

* To increase share capital by 50 pct

* Some proceeds may go for acquisitions-analyst

(Recasts, adds CEO, analyst's comments)

By Regan Doherty

DOHA, Sept 19 (Reuters) - Doha Bank DOBK.QA , Qatar's fifth-largest lender by market value, is planning a share issue which could raise a further $1.6 million to ride an economic boom in the gas-rich Gulf state.

The bank, which raised $500 million from a bond sale in March, said on Wednesday in a statement to the Qatar bourse that it planned to increase its share capital by 50 percent in the first quarter of 2013.

The bank has a market value of around $3.2 billion

"We want to set a clear expansion model in terms of growth, commensurate with the region and the local economy ... aligning ourselves with Qatar's development strategy," Chief Executive R. Seetharaman told reporters on the sidelines of a conference.

He said growth projects would "create opportunities for contract finance, trade finance and corporate and commercial lending. So we're getting ready for the boom phase."

"Now we are paving the way for an equity issue."

Qatar banks are expected to benefit from the country's breakneck expansion plans and many have already tapped capital markets this year.

Jaap Meijer, a director for equity research at Dubai-based Arqaam Capital Ltd., which has a "hold" rating on the stock, said the bank's capital level was "very tight".

He said some of the proceeds will be used to boost capital while the remainder would go for mergers and acquisitions outside Qatar.

Meijer expects the bank to raise between 4.1 billion Qatari riyals to 5.8 billion riyals, depending on whether the shares are sold at par or at a discount.

The bank said details of the capital raising would be disclosed after necessary studies and approvals were in place.

Doha Bank shares rose 0.4 percent on the Qatar bourse Wednesday. They have fallen 12.6 percent year-to-date, according to Thomson Reuters data.

Meijer said he expected the capital increase to boost the bank's core tier-one capital to 19.2 percent.

Qatar National Bank QNBK.QA (QNB), the largest lender in the country, has been on an acquisition spree recently snapping up stakes in regional lenders.

It is also in talks with France's Societe Generale SOGN.PA to buy its controlling stake in Egyptian unit National Societe Generale Bank NSGB.CA .

QNB raised $3.5 billion from a rights issue last year.

A senior Standard & Poor's executive said in July that Qatari lenders should rely less on deposits and issue more debt and Islamic bonds to raise capital to fuel the country's growth.

ID:nL6E8I46SO ($1 = 3.6412 Qatar rials)

(Additional reporting by Rachna Uppal; Writing by Dinesh Nair; Editing by David Cowell)

((rachna.uppal@thomsonreuters.com)(+971 4 366 4240)(Reuters Messaging: rachna.uppal.reuters.com@reuters.net))

Keywords: DOHABANK FINANCING/