Look, we’re strong and stable: Kuwaiti banks

October 14th, 2008 - 1:37 pm ICT by IANS  

Dubai, Oct 14 (IANS) Three major banks in Kuwait have made a strong pitch for their stability in the face of the global financial crisis, releasing quarterly results that revealed significant profits.Heads of the Kuwait Finance House (KFH), National Bank of Kuwait (NBK) and the Commercial Bank of Kuwait (CBK) reiterated their banks’ stable and strong foundation and gave the results as proof.

The Islamic finance or sharia-compliant KFH announced that the bank’s total profit for the third quarter this year was approximately 463.42 million Kuwaiti dinars ($1,740.06 million) compared to KD393.46 million ($1478.06 million) profit for same period last year, a growth of 18 percent.

Total assets stood at KD10.54 billion ($39.59 billion), an increase of KD2.29 billion ($8.60 billion) from the same period last year.

Total deposits increased in the third quarter to KD6.33 billion ($23.78 billion), up 26 percent from the same period last year.

According to KFH chairman and managing director Bader Abdul-Mohsin Al-Mukhaizeem, the bank’s sharia-compliant methodology and its investments, which were based on the selection of high quality assets, supported the bank strongly.

KFH business strategy has protected it from high level risk markets which contradict the Islamic investment concept that stipulates that customers’ funds are considered as a trust and should be invested with utmost care, he said.

Accordingly, KFH headed to regions of balanced growth and stability like southeast Asian countries and China, the state-run Kuwait News Agency (KUNA) quoted Al-Mukhaizeem as saying.

“The Kuwaiti market suffered significant unjustified losses recently in a way that do not cope with the national economy’s tenacity and strength, the matter which requires more focus and accuracy in tackling the crisis management methodology,” he said.

“We live in a world where economy has become the most significant factor that affects the lives of individuals and societies as witnessed in the recent global crises.”

NBK, the largest Kuwaiti bank and the highest-rated in the Middle East, too reported a record net profit of KD243.7 million ($915 million) during the first nine months of 2008, up 10.5 percent from the same period last year.

Return on assets for the period was 2.72 percent with return on equity at 21.7 percent, demonstrating the bank’s strong earning power, KUNA reported.

“This strong performance attests to the solid foundations on which the bank was built,” NBK board chairman Muhammad al-Bahr said.

“NBK has been able to sail through the storm gripping global and regional financial markets unscathed, as we have consistently focused on our core business and ways to diversify sources of income,” he added.

NBK’s total assets stood at KD12.4 billion ($46.4 billion) at the end of the first nine months, while shareholder equity grew to KD1.7 billion ($6.2 billion).

Meanwhile, CBK announced a record net profit for the nine months to Sep 30, 2008, of KD104.9 million ($393.5 million), an increase of 14 percent from the same period in 2007.

The bank’s total assets reached KD4.3 billion (16.1 billion) at the end of September 2008 and its shareholders’ equity stood at KD480.3 million ($1.8 billion).

“Our results are encouraging in light of the difficult circumstances that have impacted a number of financial markets around the globe and affected the performance of Gulf and Arab markets,” CBK’s chairman and managing director Abdulmajeed Al-Shatti said.

“Our profits reflect the sound business strategies adopted by the Bank and reflect the strength of the Kuwaiti banking sector, its strong capital base and the effectiveness of the Central Bank of Kuwait initiatives to support the national economy,” he added.

The announcements from the banks came late Monday after the Kuwaiti bourse became the only one to close in the red, falling marginally by 0.24 percent.

All other markets in the Gulf rebounded Monday following a weeklong bloodbath triggered by the global credit crisis, as central banks of the region announced a series of remedial measures to restore investor confidence.

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