National Bank of Kuwait full-year net rises 14%, below estimates

Country’s biggest lender's net income rose to KD301.7m ($1.1bn) from KD265.2m a year earlier
National Bank of Kuwait full-year net rises 14%, below estimates
BANK RESULTS: National Bank of Kuwait, the country’s biggest lender, reported a 14 percent increase in full-year profit, below estimates (ITP Images)
By Bloomberg
Tue 01 Feb 2011 03:58 PM

National
Bank of Kuwait, the country’s biggest lender, reported a 14 percent
increase in full-year profit, below estimates.

Net
income rose to KD301.7m ($1.1bn) from KD265.2m a
year earlier, the bank said in an e- mailed statement on Tuesday.

The mean estimate
of five analysts was for a profit of KD308.6m. Fourth-quarter
profit rose 21 percent to KD77.2m, according to Bloomberg
calculations based on the full-year data.

The
global credit crisis weakened lending and investment banking in the Middle
East, pushing up provisions for loan defaults and a decline in the value of
banks’ investments.

Kuwait was forced to guarantee all deposits at local banks
in 2008 after Gulf Bank lost $1.3bn in derivatives trading and Global
Investment House, the country’s biggest investment bank, defaulted on $2.8bn of debt.

“The
strong growth in our net profit shows our ability to continue delivering
outstanding results into the future and confirms that our strategy remains
solid with focus on core business activities in and outside Kuwait,” Chief
Executive Officer Ibrahim Dabdoub said in the statement.

The bank’s operations
outside Kuwait contributed more than 20 percent of the profit, he said.

NBK
raised its capital by 10 percent to 360 million dinars in October in a rights
share offering that was more than five times oversubscribed. The bank’s total
assets were KD12.9bn at the end of 2010.

NBK,
which has a 47.29 percent stake in Islamic lender Boubyan Bank, said
shareholders’ equity rose to KD2.1bn at the end of 2010. The stake
in Boubyan strengthened “our market position in the Islamic banking segment in
Kuwait,” Dabdoub said.

The
bank’s shares gained 51 percent last year. They fell 2.8 percent to 1,400 fils
at 12:22 p.m. in Kuwait today.

NBK’s
board recommended a cash dividend of 40 fils a share and 10 bonus shares for
every 100 held.

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