Press Release 01 September 2010 The bank’s franchise is strong and its dominant position is not being challenged Moody’s: NBK’s ratings capture its resilient asset quality, strong profitability, strength of management team, and clear strategy • Non-performing loans to gross loans declined to a market best of 1.76% • The bank benefits from strong brand-name recognition and an excellent reputation, particularly in its domestic market, and should benefit from a flight to quality in the event of market tension • One of the few indigenous banks in the region with the capacity to structure and underwrite large capital-market transactions • NBK’s management is characterised by its strength and depth, as well as its clear strategy and vision The credit rating agency Moody’s has released its latest credit analysis report for the National Bank of Kuwait. Moody’s report highlighted that NBK’s ratings reflect "dominant position in domestic commercial banking" and captures “the strength and depth of NBK’s management team, its clear strategy, and strong financial metrics, particularly the resilience of its asset quality and strong profitability despite the weakening operating environment". Moody's in the report issued yesterday said that NBK’s “reported asset-quality figures for the year proved exceptionally resilient” where “NPLs to gross loans actually declined to a market best of 1.76%”. According to Moody’s, “NBK appears to have avoided high-profile regional and domestic corporate defaults. This reflects well on its credit vetting systems and processes, which have so far proven adequate to safeguard asset quality”. Moody's added that “NBK is Kuwait’s largest bank with its market shares in assets and loans reaching around 30%” and that “NBK’s franchise is strong and its dominant position is not being challenged by domestic commercial banks”. NBK is “one of the few indigenous banks in the region with the capacity to structure and underwrite large capital-market transactions”. Moreover, according to Moody’s, NBK “benefits from strong brand-name recognition and an excellent reputation, particularly in its domestic market, and should benefit from a flight to quality in the event of market tensions”. Finally, Moody’s pointed out that “NBK was the only Kuwaiti bank that was able to post an increase in net income during 2009” and that “compared with its domestic peers, the depth and diversity of its business lines enhance NBK’s revenue diversification”. Moreover, “NBK has been pursuing a regional expansion strategy in recent years that may, over the medium-to-long term, provide it with the growth opportunities lacking in its domestic market”.