KUWAIT CITY, March 7: Shareholders of the National Bank of Kuwait (NBK), the country’s biggest lender, have agreed to raise the bank’s capital by 10 percent to KD 359.8 million ($1.25 billion). The capital increase is intended to support NBK’s expansion plans, the bank has said.
According to Deputy Chairman of NBK Nasser Mesaed Al-Sayer, the bank achieved remarkable growth in 2009, despite the economic challenges that the world witnessed over the last years, due to the concerted efforts of a hardworking management team and employees.  He believes this reflects the success of the bank’s strategies.
Al-Sayer made the statement during the general assembly of the bank Sunday, during which the recommendation of the board of directors to distribute 40 percent cash profits or 40 fils per share was approved. The assembly also agreed to distribute 10 percent bonus shares, which is equivalent to 10 shares for every 100 shares, to shareholders registered in the bank on the date of the extraordinary general assembly.  It has also elected the board members of the bank for three years — from 2010 to 2012.
Excellent performance
Al-Sayer disclosed the bank earned a net profit of KD 265.2 million ($925 million) in 2009 — a four percent increase compared to KD 255 million during the previous year — in spite of the global economic meltdown.  He added the bank compensated 66 million in appropriation/allowances, which has been kept as guarantee, to the customers who suffered due to the Madoff investment scandal.  He asserted this is an initiative taken by the bank to protect its customers.
Moreover, the profit per share of NBK increased from 87 fils in 2008 to 92 fils in 2009.  Al-Sayer confirmed the operating revenues of the bank increased from about KD 508 million ($1,773 million) to KD 518 million ($1,808 million).  He said the return on investments reached 2.17 percent, while the return on shareholders rights reached about 18.4 percent and total return of the bank reached KD 12.9 billion ($45 billion).  Rights of the shareholders reached KD 1.7 billion ($6 billion) towards the end of 2009.
Al-Sayer affirmed NBK was elected as one of the most secure banks in the Arab World in 2009 and one of the top 10 biggest banks in developing markets in the same year.  He said the NBK has maintained its status as one of the most trusted banks in the Middle East despite the financial meltdown.  He added the Standard & Poor (S&P) — rating agency — gave A+ to NBK, referring to the strong financial situation of the bank, its operating performance and its leadership in the local market. He stated the Fitch Rating also gave the bank AA+ in the same area, in addition to Moody’s which gave NBK a rating of Aa2 for its strong presence in the local market and expansion in regional markets.
Regional expansion
Due to the financial meltdown in the international market, the executive board of NBK adopted a strategy at the beginning of 2009 to deal with the situation effectively.  This allowed the bank to focus on expanding in the region, after approving the expansion policy during the last years.  It has also merged the units of the group, particularly the level of risk department and expansion of services, products and banking solutions provided to customers as part of the system of the group.  Al-Sayer clarified this expansion policy comes after the emergence of a wide array of opportunities and the bank is ready to scour for these opportunities at the right time and place.
 After many Arab banks, which adopted a similar expansion policy suffered, Al-Sayer stressed NBK maintained the success of its foreign branches, including financial incomes which exceeded expectations.  He pointed out this reflects positively on the expansion policy of the bank and its operation objectives.  Based on these facts and results, the bank intends to increase its contribution to its foreign branches to 50 percent of the total net profit starting from 2010.
 Transformation to Islamic Banking
Al-Sayer asserted the year 2009 witnessed a strong strategic diversion in the investment scheme of the group as it acquired 40 percent of Boubyan Islamic Bank to become its Islamic banking arm.  The top management of the group is keen on the complete separation of the administration of both banks. After this deal, NBK strengthened its presence in the Islamic banking sector, an opportunity the bank has been eyeing for several years.  Al-Sayer believes this will boost the overall income of the group in the coming years.
Human resources
Al-Sayer confirmed the bank continued in 2009 its policy to enhance the skills of its workers and support the national policies ton human resources.  He stressed human resource is the foundation of the group in the future leadership.  To prove that the bank fully supports the national manpower, the bank employed more than 430 Kuwaitis in 2009.
Meanwhile, chief executive officer of NBK Ibrahim Dabdoub presented the most important results of the bank compared to its local, regional and international counterparts.  He disclosed the profits of the bank total KD 302 million after deducting voluntary allowances amounting to KD 14 million and compensation for customers affected by the Madoff investment scandal worth KD 19 million, earning net profit of KD 265 million with four percent growth.
Dabdoub asserted the bank focuses on operating revenues as it is the core of all banks, indicating the recent international financial meltdown affected all sectors in the country except the banking sector. He described the NBK as a mountain that cannot be shaken even by the strongest winds. He added the main strategy of the bank is that it received 22 percent from abroad, hoping it will increase to 50 percent of the total income in the next five years.  He stated that starting from the establishment of the bank in 1952, the total cash distribution during the last five decades reached KD4.7 billion cash, since the bank is the most secure as it is part of the top 50 banks in the region.
Following are the elected board members of NBK:
1. Mohammad Abdulrahman Al-Bahr — 1,930,243,165
2. Nasser Masead Abdullah Al-Sayer — 1,861,607,951
3. Hammad Abdulaziz Al-Hamad Al-Sagar — 1,850,009,121
4. Nasser Mohamed Abdul Mohsen Al-Kharafi — 1,842,559,507
5. Gassan Ahmed Saud Al-Khalid — 1,843,699,360
6.  Yaqoub Yousef Abdulaziz Al-Faleej — 1,854,200,998
7. Hamad Mohammed Abdulrahman Al-Bahr — 1,847,256,402
8. Mathna Mohamed Ahmed Abdullatif Al-Hamad — 1,827,938,154
9. Haithem Suleiman Hamoud Al-Khalid — 1,768,161,379
10. Emad Mohamed Abdulrahman Al-Bahr — 551,336,263
11. Lowi Jassem Mohamed Al-Kharafi — 145,708,670