National Bank of Kuwait posted a four percent increase in full-year profit as the country’s biggest lender by market value expanded operations.
Net income rose to 265.2 million dinars ($925m) from 255.3 million dinars a year earlier, the bank said in an emailed statement. Fourth-quarter profit surged more than fivefold to 63.7 million dinars ($221.5m) from 11.7 million dinars a year earlier, according to Bloomberg calculations based on the full-year data.
“The increase in profits was attained even after taking additional and voluntary general provisions as a precaution against any further deterioration in economic conditions and financial markets due to the global financial crisis,” according to the statement. It didn’t give details about the provisions.
The worst economic crisis since the 1930s has crimped lending at banks, weakened capital-markets and increased loan defaults in the region. The crisis prompted Kuwait in 2008 to guarantee deposits in local lenders after Gulf Bank lost 375 million dinars from derivatives trading and Global Investment House, the country’s biggest investment bank by assets, defaulted on $2.8bn of debt.
National Bank of Kuwait raised its stake in Boubyan Bank KSC, an Islamic lender, to 40 percent last year as part of a drive to develop Islamic banking. The bank plans to buy back as much as 10 percent of its shares.
“Our regional expansion strategy proved successful as confirmed by the resilience of our profits and the diversity of our income sources,” CEO Ibrahim Dabdoub said.
“Our operations outside Kuwait continued to provide a stronger foundation for the stability of our profits with growing contributions from Egypt, Qatar and Turkey.”
National Bank of Kuwait’s operating income rose 2 percent to 518 million dinars and total assets grew 7.8 percent to 12.9 billion dinars at the end of last year. The lender’s board recommended a cash dividend of 40 fils a share and 10 free shares for every 100 held.