Qatar National Bank, the Gulf state\'s largest bank, is in talks with banks on refinancing a $1.85bn loan maturing July 22, two sources have said. Refinancing the full amount could prove tricky, the bankers said, given the reluctance of European banks to commit new funds in the face of the euro zone crisis. \"(Also,) they are better rated than many of the banks they are going to, so the banks will have to take it as a loss-leader as their funding costs will be higher than for QNB,\" a London-based banker involved in the talks said on Thursday, on condition of anonymity. \"QNB is a great name but it is a question of market capacity as, to get the full liquidity needed, they will have to be flexible and cannot be too aggressive on pricing.\" QNB, rated A+ by Fitch Ratings and Standard & Poor\'s and Aa3 by Moody\'s, was not available for comment. The sources did not want to be identified as the matter has not been made public. Most bank fundraisings in the Gulf this year have come in the bond market as regional financial institutions look to take advantage of historically low interest rates to diversify away from bank lines and secure longer-term funding. QNB itself priced a $1bn five-year bond in February. European lenders pulling back from the Middle Eastern loan market due to the euro zone debt crisis has led to a smaller pool of banks able to service the regional market. Therefore, QNB will have to rely on relationship lenders to put a new loan together. \"If, in securing a three-year loan, they can shave 50 basis points off what they would pay for a five-year bond, it will make sense. But they will have to lean on their relationships for such a big amount,\" the second banker, based in the Gulf, said. \"They will be able to do a transaction but I doubt for such a big amount.\" The five-year loan paid 19.5 basis points over the London interbank offered rate (LIBOR) and was arranged by Barclays and Royal Bank of Scotland, with 25 banks making up the original syndicate. QNB is in the running to acquire Denizbank, the Turkish unit of embattled Belgian lender Dexia, and increased its offer last month. QNB shares closed down 0.2 percent on Thursday, taking year-to-date losses to 3.6 percent.