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Tue 14 Oct 2008 12:15 AM

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Kuwait's NBK Q3 down as bourse slides

Quarterly profit down 9.9% to $257mn, hit by losses on Kuwaiti and Qatari markets. 

National Bank of Kuwait (NBK), the country's largest bank by assets, posted a 9.9 percent fall in third-quarter net profit, as a slide among Gulf stock markets hurt investment income.

Net income in the three months to Sept. 30 came in at 68.59 million dinars ($257 million), or 26 fils per share, compared with 76.12 million dinars, or 32 fils per share in the same period a year ago, NBK said in a statement.

"Most banks have an investment portfolio in the market. This quarter has a decline... in the range of 15 million dinars," NBK's Deputy Chief Executive Shaikha Al-Bahar told Al-Arabiya television, adding that NBK was invested in Gulf markets such as Kuwaiti and Qatari shares.

Global Investment House had forecast a third-quarter net profit of 83.20 million dinars.

NBK said its net profit in the nine months to Sept. 30 rose 10.5 percent to 243.7 million dinars.

This includes unrealised losses of 3.96 million dinars.

Return on assets in the nine months was 2.72 percent, while return on equity was 21.7 percent, NBK said in a statement.

NBK does not have any exposure to US bank Lehman Brothers , Al-Bahar told Arabiya.

"We don't have any exposure to Lehman Brothers or any bank or investment firm... in the US markets," she said.

Operational profit rose about 16 percent to $1.5 billion in the first nine months compared with $1.3 billion in the same period last year, she said.

NBK has been expanding in the Middle East to counter increasing competition at home by buying Al-Watany Bank of Egypt and a 40 percent stake of unlisted Istanbul-based Turkish Bank last year.

"We expect our international branches to contribute 50 percent of total group profits by the year 2015," Chief Executive Ibrahim Dabdoub reiterated in a statement.

Dabdoub said in July he expected 2008 net profit to reach 350 million dinars, a 28 percent rise compared with last year. He could not immediately be reached for comment on Monday.

The bank's total assets rose 10.7 percent to 12.4 billion dinars at the end of the first nine months, while shareholder equity grew 6.3 percent to 1.7 billion dinars, compared with the first half of 2008.

NBK stock, which lost 6.25 percent this year, closed 1.1 percent down on Monday. Earnings were released after the market closed. (Reuters)

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