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Wed 29 Oct 2008 06:10 AM

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Gulf Bank losses 'will be known within two days'

Kuwait bank officials currently calculating scale of problem - new chairman.

The full scale of the losses incurred by the troubled Gulf Bank in Kuwait will be known within two days, the new chairman of the bank has announced.

Newly-appointed Qutaiba Al-Ghanim added that major stakeholders were ready to support the financial position of his bank "very strongly."

The statement followed the decision by the Central Bank of Kuwait (CBK) to step in and guarantee all deposits and accounts of the Gulf Bank customers after the losses incurred by the bank, news agency KUNA reported.

"Gulf Bank is currently calculating the financial losses that some of Gulf Bank customers incurred as a result of dealing through the Bank in derivatives contracts," Al-Ghanim said.

"The process will take one or two days to complete," he added.

The loss resulted from the significant decline in the exchange rate of the Euro against the US dollar.

The customers in question had been unwilling or unable to meet their obligations to cover their losses.

Gulf Bank will incur, at present, this loss, pending settlement of the issue by the bank and its customers, he said.

"It is premature to announce the total losses of the bank," Al-Ghanim added.

He also denied reports that the bank had informed the Central Bank of Kuwait about the problems too late.

"This is not true because the Gulf Bank discovered the issue just on Thursday. The legal advisors of the bank are mulling the best ways and the possible alternatives to settle the dispute with the customers or take the issue to court in order to preserve the rights of the banks and its depositors," he said.

Al-Ghanim replaced former chairman and managing director Bassam Al-Ghanim who had to resign his post amid the current crisis.

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