NBK posts record profit on foreign buys

 

National Bank of Kuwait, the Gulf's third-largest lender by market value, posted record profit in the first quarter after adding income from overseas, including Egypt, Qatar and Turkey.

 

Net income in three months to March 31 jumped 28 per cent to KWD82 million ($308.5 million; Dh1.1 billion), compared with KWD64 million (Dh887 million) in the year-earlier period, the bank said in a statement.

 

Operating income rose 30 per cent to KWD134.3 million (Dh1.86 billion), 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 Officer Ibrahim Dabdoub said in the statement.

 

"They also confirm the merits of our growth strategies emphasizing regional expansion," he said.

 

Kuwait's Global Investment House expected first quarter profit of KWD74 million (Dh1.02 billion), according to a Reuters survey last month.

 

Kuwait's largest lender 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 $522 million (Dh1.9 billion) for 51 per cent of AlWatany 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.

 

"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.

 

Shares of NBK have risen almost 8 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)