The General Assembly of the Commercial Bank of Kuwait (CBK also known as Al-Tijari) announceed Wednesday it would be converting from traditional to Sharia-abiding banking.
The decision was approved by a majority of 85 percent of the shareholders who attended ordinary and extraordinary meetings of the general assembly, Board Chairman Ali Mousa Al-Mousa announced.
"Though the majority of the shareholders voted for the move which was on the top of the agenda of the ordinary meeting, the decision does not take immediate effect - it is just a first step in a legal process involving several studies and approvals," he noted.
"The General Assembly also approved the issuance of subordinate bonds with a total value of KD 120 million in keeping with the bank''''s plans for expansion and the provisions of Basel III," Al-Mousa disclosed.
On the financial results of 2013, Al-Mousa affirmed the bank''''s commitment to the principles of corporate governance in all its policies and activities which are subject to constant revision.
"The shareholders'''' equity in the bank grew by 1.8 percent to KD 562 million, compared with the previous year, which ranked the bank as the third largest in Kuwait.
"The total value of assets grew by 7.1 percent y/y to KD 3.9 billion, thus ranking as the fifth largest in the country''''s banking sector," Al-Mousa went on to say.
"The volume of credits offered to clients last year topped KD 2.3 billion, reflecting an increase of KD 189.3 million or 8.9 percent y/y," he said noting that there was a boom in the bank''''s overseas credits which grew to KD 71 million.
The operating and net profits hit KD 102 million and KD 23.5 million respectively in 2013 with the capital adequacy ratio standing at 18.38 percent and the ratio of non-performing loans (NPLs) to the gross loans hitting 1.35 percent.
The aggregate provisions were KD 128.2 million, resulting in provision coverage for NPLs at 367 percent, compared with 169 percent in 2012, he added.
The General Assembly also approved the recommendation of the Board of Directors to distribute cash dividends of 7 fils per share and bonus shares amounting to 11 percent for each 100 shares