Kuwait's largest bank puts expansion plan on hold

National Bank of Kuwait (NBK) is putting its regional expansion plans on hold and will focus on capturing synergies across the group, chief executive Ibrahim Dabdoub has told Arabian Business.

“Regional expansion is an important pillar of our strategy. However, we have put that on hold for the time being. This would give us an opportunity to digest acquisitions we have made recently, especially in Egypt, and capture synergies across the Group,” Dabdoub said in an interview.

NBK has been expanding regionally over the past few years amid growing competition in its home market.

On Sunday the bank said it has agreed to buy the Commercial Bank of Kuwait’s (CBK) stake in Boubyan Bank for $420m. However, Islamic investment firm Investment Dar on Tuesday won a lawsuit against CBK to suspend the sale.

Kuwait’s largest bank by assets bought Egypt’s Alwatany Bank in 2008. It also holds a 40 percent stake in Istanbul-based Turkish Bank and 30 percent in the International Bank of Qatar.

The bank will be going “back to basics” this year and will focus on its personal and corporate banking divisions, Dabdoub said.

Consumer banking will continue to post strong growth due to government policies that protect the employment and income of Kuwaiti nationals, while corporate clients will be looking to snap up bargains in the wake of the international financial crisis.

“Our corporate clients include the leading businesses in the country and many of them will require financing to take advantage of the opportunities arising as things stabilize,” he said.

“The economic, business and regulatory environment will be our biggest challenge this year. We will still strive to grow, but we realise that there will be constraints, for some time.”

The global downturn is unlikely to end “soon”, he added.

“Don't believe anyone who says they can call market turnarounds. No one has a crystal ball. We are all happy about the recent market turnaround. But if, and when, the economy dips again, we might see another decline.”

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