National Bank of Kuwait (NBK), the Gulf's third-largest lender by market value, posted record profit in the first quarter helped by income from its foreign operations.
Net income in the three months to March 31 jumped 28 per cent to KWD82 million ($Dh1.132 billion), compared with KWD64m in the year-earlier period, the bank said in a statement.
Operating income rose 30 per cent to KWD134.3m, and return on average assets was 2.87 per cent, the bank said.
"The strong results of the first quarter reflect continued growth in all lines of business and the strength of our operations and franchise," NBK Chief Executive Ibrahim Dabdoub said in the statement.
"They also confirm the merits of our growth strategies emphasising regional expansion," he said.
Kuwait's Global Investment House expected first quarter profit of KWD74m, according to a Reuters survey last month.
Naser Al Nafisi, General Manager at the Al Joman Center for Economic Consultancy in Kuwait, said NBK was benefiting from an expansion in the Middle East to counter growing competition at home, where it controls 40 per cent of the market.
"The opportunities are abroad. In Kuwait there is no more growth with eight to nine banks operating," he said.
Kuwait's second-largest lender by market value is expanding abroad to counter growing competition at home, where it controls 40 per cent of the market.
Last year, it agreed to pay at least $522m for 51 per cent of Al Watany Bank of Egypt, later increasing that to 98 per cent.
It also raised its stake in International Bank of Qatar (IBQ) to 30 per cent from 20 per cent, and bought 40 per cent of Istanbul-based Turkish Bank. It also plans to expand to Syria through a joint-venture.
"We are already seeing the fruits of these investments in terms of increased growth in our profitability and reach," Dabdoub said.
AlWatany posted a 157 per cent surge in profit last year and IBQ's jumped 56 per cent.
Dabdoub told Reuters in January he expected Kuwait's largest lender to post profit growth this year of as much as 15 per cent.
But Al Nafisi said NBK would feel the impact of new restrictions on consumer lending imposed by the central bank to tackle inflation. The new rules took effect on March 30.
"The impact will take time, we will see an impact from the third quarter," he said.
Shares of NBK have risen almost eight per cent this year, compared with 17 per cent for the main stock index. Islamic rival Kuwait Finance House has climbed about 23 per cent. (Reuters)
Kuwait's NBK Q1 profit a record