NBK posts record profit

RECORD PROFIT: NBK saw Q1 earnings jump 28%, helped by income from its foreign operations. (ITP Images)

National Bank of Kuwait (NBK), the Gulf's third-largest lender by market value, posted record profit in the first quarter helped by income from its foreign operations.

Net income in the three months to March 31 jumped 28% to 82 million dinars ($308.5 million), compared with 64 million dinars in the year-earlier period, the bank said in a statement.

Operating income rose 30% to 134.3 million dinars, and return on average assets was 2.87%, the bank said.

"The strong results of the first quarter reflect continued growth in all lines of business and the strength of our operations and franchise," NBK Chief Executive Ibrahim Dabdoub said in the statement.

"They also confirm the merits of our growth strategies emphasising regional expansion," he said.

Kuwait's Global Investment House expected first quarter profit of 74 million dinars, according to a survey by newswire Reuters last month.

Naser Al-Nafisi, general manager at the Al-Joman Center for Economic Consultancy in Kuwait, said NBK was benefiting from an expansion in the Middle East to counter growing competition at home, where it controls 40% of the market.

"The opportunities are abroad. In Kuwait there is no more growth with eight to nine banks operating," he said.

Last year, it agreed to pay at least $522 million for 51% of AlWatany Bank of Egypt, later increasing that to 98%.

It also raised its stake in International Bank of Qatar (IBQ) to 30% from 20%, and bought 40% of Istanbul-based Turkish Bank. It also plans to expand to Syria through a joint-venture.

"We are already seeing the fruits of these investments in terms of increased growth in our profitability and reach," Dabdoub said.

AlWatany posted a 157% surge in profit last year and IBQ's jumped 56%.

Dabdoub told Reuters in January he expected Kuwait's largest lender to post profit growth this year of as much as 15%.

But Al-Nafisi said NBK would feel the impact of new restrictions on consumer lending imposed by the central bank to tackle inflation. The new rules took effect on March 30.

"The impact will take time, we will see an impact from the third quarter," he said.

Shares of NBK have risen almost 8% this year, compared with 17% for the main stock index. Islamic rival Kuwait Finance House has climbed about 23%. (Reuters)

Print | Email | Discuss this article |

USER COMMENTS (0 COMMENTS)

POST A COMMENT

CLICK HERE TO POST A COMMENT

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.