Kuwait's NBK Q4 profit dips; CEO upbeat on '09

LOW KEY: NBK's full-year profit fell to $884mn from $948m in 2007.

National Bank of Kuwait, the country's biggest bank, posted a 78 percent fall in fourth-quarter net profit as it took provisions to offset the impact of the global financial crisis.

Full-year profit fell to 255.3 million dinars ($884.3 million) from 273.6 million dinars ($947.69 million) in 2007, the bank said in a statement on Tuesday, and Reuters calculated fourth-quarter profit of 11.6 million dinars based on previous data. That compares to fourth-qaurter profits of 53.07 million dinars in the same period of 2007.

Global Investment House analysts surveyed by Reuters in December expected fourth-quarter net profit of 65 million dinars ($225.14 million).

NBK took voluntary provisions of 45 million dinars ($155.87 million) as a precaution, Chief Executive Ibrahim Dabdoub said. Without the provisions, net profit would have grown by 10 percent in 2008.

Dabdoub told Reuters he hopes to keep 2009 net profit stable at last year's level but warned this year would be difficult because of the global crisis.

"To be realistic we ... say hopefully we will be able to reach, this year, last year's figure", he said when asked to give a profit forecast for 2009.

The bank expects retail lending to rise this year and corporate lending to be flat, he added.

Dabdoub told Reuters in October he expected NBK to post a net profit of around 350 million dinars ($1212.32 million) in 2008, but later warned the bank would not meet the target as the global credit crunch hit the Gulf.

NBK will slow down foreign expansions but still plans to set up an Islamic lender in Switzerland, Dabdoub said.

"We will be slowing down our expansion unless we see a good acquisition opportunity," he said. "(Switzerland) has not been done. We are still waiting until we agree with our partners on a strategy."

In March, NBK said it plans to set up an Islamic lender in Switzerland with a Saudi partner aimed at Gulf investors in the European country.

NBK has been expanding abroad to offset rising competition at home by buying Al-Watany Bank of Egypt and a 40 percent stake of an unlisted Istanbul-based Turkish bank in 2007.

It is also active in Qatar through its affiliate International Bank of Qatar (IBQ).

Dabdoub said the bank is still eyeing expansion opportunities in Syria and North Africa "but it takes time".

Both Egypt's Watany and Qatar's IBQ performed well last year, he said without giving details.

Operating income for the year rose 20 percent to $1.84 billion last year, compared to 2007, NBK said in the statement.

Earnings per share in 2008 fell to 95 fils, compared with 112 fils a year earlier. (Reuters)

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