NBK reports net profits of USD 925 million for 2008
National Bank of Kuwait (NBK), the largest Kuwaiti bank and the highest rated in the Middle East, announced net profits of USD 925 million (KD 255.3 million) as compared with USD 991 million in 2007. The profit figure reflects the Bank’s prudent and voluntary decision to make additional general provisions. The provisions were made as a precautionary measure against any protracted impact of the global financial crisis, coupled with a cautious approach as to the potential ramifications for local and regional economies.
NBK however reported an increase in operating income for the year to USD 1,843 million, a 20% increase over the previous year, reflecting impressive growth in the Bank’s core activities. The growth is all the more reassuring considering the unprecedented challenges faced by the industry.
Ibrahim S. Dabdoub, NBK’s Group Chief Executive Officer, commented on the Group’s result saying “The decision by NBK’s Management and Board of Directors to increase the Group’s general provisions was a voluntary and precautionary measure against the potential fallout of the global crisis on domestic and regional markets. These voluntary general provisions are over and above regulatory requirements. Such additional provisions give NBK further confidence and resilience with which to successfully manage through these difficult times. Excluding such provisions, net profits would have grown by 10% over 2007.”
The Bank's performance remains solid and impressive given the challenging environment for financial and non-financial institutions worldwide. Return on average assets (ROAA) remained a respectable 2.2% and return on average equity (ROAE) equaled 17.4%, marking a bright spot on the league tables of regional and international banks. NBK's total assets reached USD 43.4 billion (KD 11.97 billion) at the end of 2008, while shareholder equity stood at USD 5.2 billion (KD 1.44 billion), excluding proposed dividends and minority interest.
“NBK's clear strategy, prudent culture, and rock-solid franchise have always gained us the trust and confidence of customers. This is a testament to NBK’s position in the region and continued drive to offer innovative, best in class products and services, based on an understanding of customer needs,” said Dabdoub.
NBK has been pursuing a strategy of regional expansion that saw it acquire Al Watany Bank of Egypt and a 40% stake in The Turkish Bank in November 2007 and January 2008 respectively. 2008 saw the first full year of Al Watany Bank of Egypt being consolidated into the financial results of the NBK Group. "Considerable effort has been spent on integrating the operations and systems to meet Group standards and we are very encouraged by the progress made to date," Dabdoub added.
Today, NBK enjoys the largest presence in Kuwait with 69 branches, as well as a growing regional and international network comprising an additional 86 branches covering 16 countries in both the MENA region and world financial centers including London, Paris, New York and Singapore, as well as in China and Vietnam. The newly acquired presence in Egypt, Turkey and Dubai follows on the heels of NBK’s entry into Qatar, Saudi Arabia, Jordan, and Iraq. Together with an established presence in Bahrain and Lebanon, these new markets position NBK as a leading regional player.
Last year, NBK’s long-term credit rating was upgraded by FitchRatings to AA- from A+, a reflection of the Bank’s strong financial position, solid and sustainable growth as well as the success of its regional expansion strategy. This further consolidated the strong reputation NBK has enjoyed over the years, having been consistently awarded the highest credit rating of all banks in the region from Moody's, Standard & Poor's, and Fitch. The Bank’s rating is supported by its high capitalization, prudent lending policies and its disciplined approach to risk management, in addition to the recognized excellence of its very stable management.
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