National Bank of Kuwait (NBK), the largest Kuwaiti bank and the highest-rated in the Middle East, reported a record net profit of USD 533.3 million (KD 155.7 million) for the first nine months of 2005 compared with USD 346.5 million for the same period last year, a record increase of 54%.
Return on assets and return on equity also rose to 3.65% and 37.1% respectively, marking an outstanding performance by international standards.
Ibrahim Dabdoub, CEO of NBK, commented “Our performance this year was very strong. All our businesses achieved excellent results and solid growth, benefiting from a favourable business environment combined with rising interest rates. Our interest margins positively reflected the rise in interest rates as well as the sound management and advantageous mix of liabilities. Our solid franchise and diversified revenue sources generated balanced growth across business lines and regions."
“Our regional expansion strategy started to bear fruit this year with strong results coming from our new markets in Qatar and Jordan alongside our established network in major financial centers that has long played an important role in supporting NBK's businesses from treasury, trade finance and corporate banking to private banking and wealth management," added Dabdoub.
In 2004, NBK acquired a 20% ownership stake in the International Bank of Qatar (formerly Grindlays Qatar Bank) together with full management control. Also in 2004, NBK opened a new branch in Amman, Jordan, and a tenth branch in Lebanon. “This year, we expect to inaugurate branches in Saudi Arabia and Iraq, in addition to acquiring a banking license to operate in Dubai and China,” noted Dabdoub.
“An integral element of NBK's consistent performance is our ability to manage growth while staying disciplined in managing costs and risks. Our cost to income ratio is down to 23% from 27% a year ago. We also continue to enjoy excellent asset quality arising from a long-standing, prudent credit culture."
NBK has consistently earned the highest credit ratings in the Middle East by international agencies including Moody’s, Standard & Poor’s and FitchRatings, in recognition of its healthy performance, fine asset quality and solid capital base. Rating agencies also praise the depth and stability of NBK’s management and its clear strategy as fundamental pillars for the Bank’s superior ranking.
"I am confident that we can maintain our momentum and exceptional results in the coming period, but more importantly maintain our focus on meeting the evolving needs of our customers with an ever widening array of innovative products and services,” continued Dabdoub. "One of the areas we hold high expectations for is investment banking, which is positioned to take advantage of a solid regional economic outlook in the medium term in light of record oil prices, capital projects and strong liquidity. We have thus established a new subsidiary, NBK Capital, that will handle all investment banking activities of our Group.”
“To accommodate our ambitious expansion strategy, NBK is investing heavily in numerous projects to develop our infrastructure and human resources. In planning these projects we are looking at the business needs one, five, and even ten years ahead. This is NBK’s strength. We give as much attention to strategy execution as we give to development, and there we have been able to differentiate ourselves within the region.,” concluded Dabdoub.
NBK’s total assets reached USD 20 billion at the end of September 2005, while its shareholders’ equity stood at USD 2.4 billion.
NBK was founded in 1952 as the first indigenous bank and the first joint stock company in Kuwait and the Gulf Region. It is by far the largest financial institution in Kuwait with effective market dominance in the commercial banking market. NBK stands out in Kuwait and among Arab banks in terms of its local and international network, which includes branches, subsidiaries and representative offices in New York, London, Paris, Geneva, Lebanon, Amman, Bahrain, Qatar, Singapore, Vietnam and Thailand, with other ambitious plans for regional and global expansion. NBK reported profits of USD 515 million during 2004, among the highest in the Arab world.
NBK’s Long-Term Rating:
• Moody’s A2
• FitchRatings A+
• Standard & Poor’s A
• Capital Intelligence A+
© 2005 Al Bawaba (www.albawaba.com)
