Bad loans spur earnings slump at Kuwait’s CBK

Second quarter earnings down 91% on provisions against loans, investments
Bad loans spur earnings slump at Kuwait’s CBK
By Reuters
Thu 04 Aug 2011 07:58 AM

Commercial
Bank of Kuwait (CBK) reported a 91 percent drop in its second-quarter net
profit, missing forecasts after booking provisions against its investment and
loan portfolio.

Net
profit in the three months to June 30 was KD198,000 ($724,478), compared to KD2.3m
a year earlier, the lender said in a statement on the bourse website.

"The
bank has continued its prudent policy towards building up a strong provision
base, the bank has total provisions for credit facilities of KD180.3m,"
CBK's Chairman Ali al-Awadhi said in another statement.

Net
income in the first half of the year was KD1.5m compared with KD890,000 a year
ago.

Operating
profit before provisions for the first half of the year came in at KD52.3m, the
lender said.

Last
month, Goldman Sachs cut its price target on CBK to KD0.84 from KD0.93, citing
weak loan growth and high cost of risk.

CBK's
shares closed 5.8 percent higher at KD0.92 on Wednesday. The results were
released after the market closed.

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