CBK puts Iraq and Yemen plans on hold

PLANS FROZEN: Commercial Bank of Kuwait freezes plans to buy Iraqi and Yemeni lenders. (Getty Images)

Commercial Bank of Kuwait (CBK) has put on hold plans to buy Iraqi and Yemeni lenders due to the global economic slowdown and may take provisions in 2009 to weather the storm, its chairman said.

"This year we will be cautious but we'll keep our eyes open," Abdulmajeed al-Shatti told reporters on Wednesday after a shareholders' meeting.

"Plans are on hold because of the current economic situation," he said.

In November, Shatti told Reuters the lender was in talks with a local investment firm to buy a majority stake in an unnamed Iraqi lender and a 70 percent stake of Yemen Gulf Bank.

"In Iraq nothing has materialised for the time being ... in Yemen, there was a slowdown," he said without elaborating.

Shatti said he saw 2009 as a difficult year, declining to give a profit forecast, but said the lender could book provisions this year.

"I think this year also part of our profit will taken as provisions," he said. "The economic circumstances are difficult."

He said profit in the first quarter will not match the year-earlier period, but added "profit will be good under the current difficult circumstances".

In the first quarter of 2008, Kuwait's third-biggest bank by market value posted a 22 percent rise in net profit to 34.12 million dinars ($115.5 million) after it sold its stake in the Bank of Bahrain & Kuwait.

CBK posted a 16.3 percent profit fall to 100.7 million dinars in 2008 as it booked provisions to offset the impact of the global financial crisis.

CBK made a fourth-quarter loss of about 4.17 million dinars, according to Reuters calculations. The bank said it booked 57.7 million dinars of provisions for possible impairment in 2008 against loans and investments. (Reuters)

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