Kuwait’s Gulf Bank, which lost a billion dollars in 2008 and provisioned for a further billion dollar loss in 2009, is on course to make a profit in 2010, CEO Michel Accad has said.
In an interview with Arabian Business, Accad said: “Once you have taken 100 percent provision on your bad debt, what else is there? You can’t have any more bad accidents, you don’t have (bad) derivatives, you don’t have any more bad debts. Actually our future, in my view, is probably amongst the brightest of the banks in the Gulf… For the second half of the year we expect that no matter what happens in the economy we will do much better and show a good profit for the year.”
Accad, who was appointed CEO in June, 2009, added 2010 was proving to be a “turnaround year,” and attributed the performance to new management.
In 2008, in return for a 16 percent stake, the Kuwait government had to rescue the bank after it lost all of its capital following a series of disastrous derivatives positions. In 2009 the bank suffered due to the credit crunch, Accad said.
“Our stock price, which is a good indicator, has been the leading performer on the Kuwaiti stock exchange since the start of the year. People know that we have recognised all our problems and put them behind us,” he added.
At the time of writing, shares in Gulf Bank – the fourth largest bank in Kuwait by market value – were trading around $1.60, up from $1 at the start of the year.
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