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CBK posts slowest growth in two years

By Agencies

Commercial Bank of Kuwait posted its slowest growth in quarterly profit in two years after it said the central bank tightened lending restrictions. The bank said it wants to buy in Egypt and enter Algeria.


Profit in the fourth quarter was KWD28.16 million, up 12.7 per cent on the year-earlier period, the slowest rate of growth since the fourth quarter of 2005 and below an analyst forecast.


"The regulatory requirements from the central bank concerning loans changed. They added constraints," Chairman Abdul-Majeed Al Shatti told Reuters by telephone on Wednesday.


Net income in the year to December 31 was KWD120.36 million, compared with KWD100 million in 2006, the bank said in a statement on the Kuwaiti bourse Web site, without giving quarterly data. Reuters calculated the fourth quarter based on earlier data.


"Our plan is to achieve 20 per cent profit growth this year because we launched private banking at the end of last year and because of dividends from investments," Shatti said.


"We are looking to find a good acquisition in Egypt in 2008... we're looking for a majority stake," he said, declining to give details. "Egypt has great growth potential because the population is big and there is a lot of development."


The bank's bid for AlWatany Bank of Egypt in August but was beaten by bigger rival National Bank of Kuwait.


It also bid for Turkish Islamic lender Turkiye Finans but failed to beat Saudi Arabia's National Commercial Bank.


Like other Gulf Arab banks benefiting from windfall returns from soaring oil prices, CBK has been trying to expand in the region.


Shatti said the bank is "considering very seriously" all possibilities in Algeria. It also plans to open eight branches in Kuwait this year.


The bank made KWD24.99 million in the fourth quarter of 2006 and KWD92.2 million in the first nine months of last year, according to earlier data.


A Global Investment House analyst surveyed by Reuters expected fourth quarter net profit of KWD31.60 million.


The bank proposed a cash dividend of 85 per cent or 85 fils per share and a one bonus share every 20 held. There are 1,000 fils per dinar.


The bank's shares, up more than nine per cent this year, closed 1.22 per cent lower on Wednesday. (Reuters)