National Bank of Kuwait (NBK), claimed to be the largest Kuwaiti bank and the highest-rated in the Middle East, reported a net profit of $ 431.2 million (KD 120.8 million) for the first half of 2012 compared with $ 523.5 million (KD 146.7 million) for the same period in 2011. NBK's H1, 2012 profits were held back by the $ 96.4 million (KD 27.0 million) judgmental provision charges, reflecting the negative economic and geopolitical developments occurring both domestically and in the region and their potential implications on an already stagnant operating environment.
As of end of June 2012, NBK Group's total assets reached $ 51.1 billion (KD 14.3 billion) up 4.4 percent compared to June 2011, while total group shareholders' equity increased by 4.9 percent year-on-year to $ 8.2 billion (KD 2.3 billion). NBK's net operating income recorded a solid $ 943 million, in line with last year's figure.
NBK's Group Chief Executive Officer Ibrahim Dabdoub said: "NBK continues to operate and deliver in a very challenging environment both domestically and regionally. Our first half profits were negatively affected by heavy judgmental provision charges. We have opted to set aside $ 96.4 million in judgmental provisions in face of a further potential deterioration in our operating environment. Domestically, a negative outlook is inevitable where Government spending remains dormant, tendering of new projects significantly lags and asset values continue contracting as the local stock market considerably underperforms. Add to that, the geopolitical developments that are putting further pressures on both the local and regional economic activity."
He added: "During the first half of 2012 profits from our international operations grew by 44 percent year-on-year. Additionally, our recent move to increase our stake in Boubyan Bank strengthens our presence in Kuwait's Islamic banking market and opens new growth prospects for the Group."