KUWAIT CITY, March 20: Gulf Bank posted a net loss of KD 28.1 million in 2009, compared to KD 359.5 million in 2008.
Fawzi Al-Thunayan, General Manager Board Affairs of Gulf Bank, was announcing the bank’s financial results for 2009 at the Annual General Meeting held Saturday.
“Gulf Bank reported an operating profit before provisions of KD 83.1 million for 2009. On a normalized basis, the bank’s operating profit amounted to KD 106 million. The net provisioning requirements for the year of KD 111.1 million on the credit portfolio resulted in a net loss of KD 28.1 million, or 12 fils per share.
“Net interest income was lower mainly due to the effective interest rate adjustments and interest suspended on non-performing loans. Subject to these adjustments, there was an increase in net interest margins.
“Other operating income was higher by KD 141.8 million. Total assets decreased by KD 204 million or 4 percent to KD 4.7 billion on Dec 31, 2009. Sixty nine percent of the balance sheet was deployed in customer loans and advances.
“Loans and advances to banks declined by 22.7 million or 71 percent to KD 9.3 million while deposits with banks and other financial institutions decreased by KD 344 million, which is 83 percent.
“The bank’s total liabilities dropped by 12 percent from 4.9 billion to KD 4.3 billion in 2009. The liabilities mainly comprise of deposits from customers, banks and other financial institutions.
“The shareholders’ funds went up by KD 369.9 million as the bank’s equity was increased by KD 376 million through an issue of 1.2 billion shares of 100 fils each at a premium of 200 fils per share in January 2009. The re-capitalization was necessitated to address the one-off losses incurred by the bank in 2008 on some structured derivative contracts, impairments to the credit portfolio and market losses on the investment portfolio.”
Post recapitalization in January 2009, the accumulated losses of KD 235.6 million till January 2009 were fully offset against the balances in Share Premium Reserves of KD 89.4 million, General Reserve of KD 2.4 million and Salutary Reserve of KD 143.8 million. The Chairman of Gulf Bank, Ali Abdul Rahman Al Bader, in his message highlighted some of the key events in 2009 saying the global financial crisis brought drastic changes in policies and conditions, which have re-shaped the economic and financial trends in the world economy.
“Despite these changes, Gulf Bank posted strong operating performance during 2009, which was a direct result of the hard work of all our staff, as well as our conservative strategy.
“The bank continued to grow its overall credit portfolio by granting new credit facilities and renewing existing credits, within the range of 10 percent of the total portfolio, which improved the general performance of the portfolio.
“During 2009, we set aside the bank’s entire operating profit of KD 83 million, together with additional amounts, as precautionary provisions against our credit portfolio. This led to net loss of KD 28 million for 2009, which was carried forward to 2010.”
The chairman also mentioned in his message the appointment of the bank’s new Chief Executive Officer and Chief General Manager, Michel Accad, “in addition to appointing well-known experts as heads of a number of critical in the Bank, including finance, risk management and retail banking.”