National Bank of Kuwait says it continues to benefit from gov't spending as it makes quarterly profit of $248.9m
National Bank of Kuwait (NBK), the Gulf Arab state's largest commercial lender, posted a 40 percent rise in fourth-quarter net profit, according to Reuters' calculations, as the bank continued to benefit from government spending.
The bank made a net profit of 75.9 million dinars ($248.9 million) in the three months to Dec. 31, compared with 54.2 million dinars a year earlier, Reuters calculated based on previous financial statements in lieu of a quarterly breakdown.
EFG Hermes forecast NBK would make a quarterly net profit of 69.2 million dinars.
Banks in Kuwait and the rest of the Gulf are facing stronger headwinds as low oil prices trim deposit growth and push up problem loans.
Still, lenders in Kuwait have received a boost as the government pushes ahead with capital spending plans including multi-billion dollar schemes such as the Clean Fuels Project to upgrade and expand two of Kuwait's largest refineries and the building of the al-Zour refinery.
NBK also said on Dec. 27 it had been invited by the public debt office at the Kuwaiti ministry of finance to participate in a bond issue by the government.
"With the size of our balance sheet, regional and international presence and relationships, we proved to be the largest beneficiary of the growing government expenditure, leveraging the high growth opportunity in the project finance business," said Nasser al-Sayer, NBK group chairman.
For the full year of 2016, the bank's net profit was 295.2 million dinars, compared with 282.2 million dinars in 2015.
Net profit in 2015 included a gain from the sale of its stake in International Bank of Qatar, NBK added.
At the end of the fourth quarter, NBK's total assets were 24.2 billion dinars, up 2.6 percent from the same time a year earlier. Loans and advances stood at 13.6 billion dinars, which it said was "marginally up" from the same period a year earlier without providing that figure.
It attributed the lending rise mainly to "larger-than-usual" loan settlements, as well as the currency devaluation in Egypt.
The move by Egypt's government in November to devalue the Egyptian currency resulted in a dip in the value of assets and liabilities held by its Egyptian subsidiary when converted to dinars, NBK said.
Deposits rose by 4.6 percent to 12.6 billion dinars at the end of the fourth quarter versus the same time a year earlier.
The bank also said its board had recommended a cash dividend for 2016 of 0.03 dinars per share and 5 bonus shares for every 100 currently held, the same as for the previous year.