By Ulf Laessing
Major Gulf Islamic lender posts heavy losses a day after NBK reports 78% fall in profit.
Major Gulf Islamic lender Kuwait Finance House (KFH) plunged into losses in the fourth quarter, a day after market leader National Bank of Kuwait (NBK) reported a 78 percent quarterly profit fall.
Full-year profit fell to 156.9 million dinars ($539.7 million), down from 275.27 million dinars in 2007, KFH said in a statement on Wednesday. Reuters calculated a net loss of 63.7 million dinars ($219.1 million) in the fourth quarter based on previous data.
Global Investment House analysts surveyed by Reuters in December expected fourth quarter net profit of 82 million dinars.
Kuwait's biggest Islamic bank gave no explanation for the net loss, and company officials could not immediately be reached for comment. KFH had made 220.59 million dinars in the first nine months.
KFH, which has been expanding to Turkey, Asia and Australia to offset rising competition at home, proposed a 40 fils cash dividend and 12 bonus shares for every 100 held for 2008.
Total assets rose to 10.54 billion dinars in 2008 up from 8.79 billion dinars in the previous year, while shareholder equity came in at 1.24 billion dinars after 1.21 billion dinars in 2007, KFH said in the statement on the bourse website.
The news came a day after NBK saw fourth-quarter net profit fell 78 percent to 11.6 million dinars as it took provisions to offset the impact of a global credit crunch.
KFH's stock was up 5.66 percent on Wednesday. Earnings were released after the close of the market.
The firm said it had taken 210.94 million dinars ($725.5 million) in provisions to help it weather a global financial crisis. (Reuters)