DUBAI - Qatar National Bank's (QNB) net profit rose 7% in the first quarter, the Gulf's biggest bank by assets said on Monday, after a boost from increased net interest income.

QNB's net profit for the quarter was 4.1 billion Qatari riyals ($1.12 billion), up from 3.9 billion riyals a year earlier and in line with analysts' forecasts, LSEG data showed.

Most Gulf currencies are pegged to the U.S. dollar and Gulf lenders have benefited from higher interest rates in the United States to combat inflation.

QNB's net interest income - the difference between what banks earn on loans and pay out on deposits - increased by around 12% to 8.08 billion riyals, while operating income rose 11% to 10.4 billion.

"Overall, results were pretty solid," banking analyst at EFG Hermes Elena Sanchez-Cabezudo told Reuters.

The positive net profit reading resulted from drivers including an increase in net interest income, fee and forex incomes and lower provisioning costs, she said.

The lender had total assets of 1.237 trillion riyals as of the end of March, up 5% year-on-year and mainly driven by a 7% growth in loans and advances from a year earlier.

QNB's credit growth of 7% in the first quarter was particularly positive and close to a forecast of an average 8% growth expected from Saudi and UAE lenders, Sanchez-Cabezudo said.

EFG expects the bank to confirm its latest earnings growth guidance of 7-9% for 2024 during the earnings call next week, she added. ($1 = 3.6465 Qatar riyals)

(Reporting by Federico Maccioni; Editing by Jason Neely, Alexander Smith and Barbara Lewis)