By Jo Anne Bladd
NBK, KFC say dealings do not violate central bank laws, risk customers’ cash
Kuwait's biggest lenders National Bank of Kuwait and Kuwait
Finance House denied on Sunday reports that they were putting customers' money
at risk by trading in derivatives.
Kuwaiti daily newspaper al-Seyassah said on Saturday in a
report, citing unnamed parliamentary and economic sources, that several
lawmakers were planning to investigate derivatives trading by some banks. The
trades took place away from the central bank's supervision, it reported, and
put clients' deposits at risk.
"NBK does not engage in any derivative trading at all
and has no exposure whatsoever to these instruments," Kuwait's biggest lender
said in a statement on the bourse website on Sunday, reiterated by a similar
statement by KFH.
NBK added that it applies international standards "in
hedging against risks of interest and foreign currency fluctuations."
"KFH is fully committed to the laws and regulations of
the supervisory authorities and all the procedures governing banks, and has no
dealings that violate or circumvent the supervision of the Central Bank of
Kuwait," the country's biggest Islamic lender said in an emailed statement.
The paper added that the move by lawmakers was a
"counter-attack" after some local banks leaked information about
suspicious cash deposits in several parliamentarians' accounts.
In 2008, shareholders in Kuwait's Gulf Bank approved a
rescue plan ordered by the central bank to raise KD375m ($1.36bn) in a 100
percent emergency rights issue to cover derivatives losses of the same amount.
Troubles of Gulf Bank, in which the country's sovereign
wealth fund owns a 16 percent stake, prompted the government to guarantee all
deposits in local banks to restore confidence.
Gulf Bank was the only lender in the oil-rich region that
had to be rescued by a government in the fallout from the global credit crisis.