Gulf state's third largest lender by assets says it made nearly $53m profit after loss in same period last year
Burgan Bank swung to a third-quarter net profit, according to a bourse statement on Sunday, but the earnings at Kuwait's third-largest lender by assets fell short of analysts' forecasts.
A unit of Kuwait Projects Company (KIPCO), Burgan said net profit was KD15.35 million ($52.96 million) for the three months to the end of September, compared to a KD10.31 million loss in the same period a year ago.
The bank's third-quarter results in 2013 were impacted by a significant jump in provisions for bad loans, which rose nearly four-fold on the previous year to wipe out its profit.
Despite the return to profit in the third-quarter of this year, the earnings fell short of a Reuters poll of five analysts, which had estimated an average net profit of KD17.36 million for the period.
Burgan's results continue a mixed earnings season for Kuwait's largest banks. National Bank of Kuwait andKuwait Finance House, numbers one and two respectively by assets, reported year-on-year declines in net profit.
Gulf Bank, the fourth-largest by assets, beat estimates with a 11.2 percent profit increase.
Shares in Burgan Bank closed down 1.8 percent on the Kuwait bourse, whose main index was near-flat. The earnings were published after the market close.
In its filing to the Kuwait bourse, Burgan said its net profit increase was attributable to higher volumes within its main business.
Net interest income in the third quarter reached KD46.2 million, up 9.7 percent on the same period last year. It contributed 66 percent of its total revenues, which grew 17 percent year on year to KD70.3 million, the lender said.
Income from net fees and commission, the second largest contributor to revenue, rose by 16.2 percent to KD12.4 million, while other income jumped more than three-fold to KD7 million.
In a bid to raise more capital to comply with the Basel III banking industry regulations, in September the bank sold a $500 million bond which increased its Tier 1 - or core - capital.
It has also received regulatory approval to launch a KD21.6 million rights issue by the end of 2014, it said on a bourse filing on Oct. 30.