By Rania El Gamal and Ulf Laessing
Commercial Bank of Kuwait becomes latest bank in GCC to wilt under pressure of global financial crisis.
Commercial Bank of Kuwait posted a net loss of about 4.17 million dinars ($14.31 million) in the fourth-quarter, the latest bank in the Gulf region to come under pressure amid a global financial crisis.
Banks across the oil-exporting Gulf, including Kuwait, have seen sharp declines in quarterly profits and some have made losses as a credit crisis hits their lending businesses, they book provisions for bad loans and write down investment losses.
Commercial Bank's full-year profit fell 16.3 percent to 100.73 million dinars, or 80.6 fils per share, from 120.36 million dinars, or 95.1 fils per share, in 2007, it said in a statement on the bourse website on Monday.
The bank, Kuwait's third-biggest by market value, did not provide quarterly data, which Reuters calculated based on previous financial statements showing the bank made profit of 104.9 million dinars in the first nine months of the year.
Commercial Bank did not give a reason for the decline in full-year profit or say whether it had restated any prior financial data. The bank made profit of 28.16 million dinars in the fourth quarter of 2007.
Last month, Kuwait Finance House, Kuwait's biggest listed bank, said it took 210.9 million dinars of provisions, the main reason behind a 63.7 million dinar loss in the fourth quarter.
National Bank of Kuwait's fourth-quarter earnings also plunged 78 percent.
Shares of CBK, down more than 13 percent this year, had fallen as much as 2 percent after the earnings were released.
The quarterly loss compared with a 32.50-million-dinar profit forecast by Global Investment House in a Reuters net profit survey in December.
The bank proposed a cash dividend of 40 fils per share but no bonus shares. There are 1,000 fils per dinar.
Bankers and analysts have said Kuwaiti banks were booking provisions at the request of the central bank.
The Gulf state had to step in to rescue Gulf Bank late last year after the lender made steep derivatives losses and earlier this month approved a 1.5 billion dinar economic stimulus package including state guarantees on fresh loans.
As part of an expansion plan, CBK, which is mainly active in Kuwait, said last year it wanted to increase its stake in Syrian Islamic lender Cham Bank to 30 percent and was in talks to buy 70 percent of Yemen Gulf Bank.
Total assets rose slightly to 4.31 billion dinars in 2008 compared with 4.29 billion dinars a year earlier, while shareholders' equity fell to 497.37 million dinars from 527.02 million dinars in 2007. (Reuters)