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CBK records net profit of KD 5.4 mln in first qtr Total assets reach KD 3.9 bln

KUWAIT CITY, May 6: Commercial Bank of Kuwait announced an operating profit before provisions for the first quarter of KD 24.6 million (1Q2013: KD 24.7 million). The bank allocated about KD 19 million of these profits as specific and judgmental provisions against the loan and investment portfolios resulting in a net profit of KD 5.4 million for three months to 31st March 2014, an increase of KD 4.6 million compared to the net profit of KD 0.8 million during 1 Q2013.  The bank endeavours to underpin its provisions in view of its prudent policy of building a strong provision base and its proactive recognition of any problems pertaining to loan and investment portfolios. Total provisions held with the bank against problem loans as at the end of the 1st quarter amounted to KD 130.4 million with the provision coverage ratio of 335% (December 2011: 92%, December 2012: 169% and December 2013: 367%). This loan provision coverage percentage is among the best percentages in the Kuwaiti banking system and exceeds the prevailing percentage in the banking sector.

As regarding the Non-performing loans - NPL to total loan portfolio ratio which is considered as one of the important measurement indicator of loan portfolio quality in banks, this ratio fell from 2.9% in 1Q2013 to 1.5% in 1Q2014 (December 2011: 6.69%, December 2012: 2.76% and December 2013: 1.35%), the bank explained that it endeavours to maintain this ratio at its minimum level during the current year, and emphasizing that this ratio which is the best in the Kuwaiti banking sector is a true reflection of the bank’s ongoing efforts to reduce its NPL ratio. It is worth noting that this ratio is evidently lower than the ratio prevailed in Kuwait banking sector which stood at 3.2% as at the end of 2013.  Commenting on the bank’s financial results, Mr. Yaqoub Al Ebrahim the bank’s official spokesman said that total assets at the end of March 2014 reached KD 3.9 billion with shareholders equity of KD 562.3 million (December 2013: KD 553.0 million). The capital adequacy ratio at the end of March 2014 is 18.78% which exceeds the minimum 12% required by the Central Bank of Kuwait, and is more than twice the minimum ratio mandated by Basel Committee.

Additionally, the bank is preparing to issue subordinated bonds of KD 120 million in the near future which will solidify the Bank’s capital base on the one hand and boost its business activities and operations on the other hand.   The bank continues to demonstrate its cost leadership with operational efficiency, a competitive advantage for the bank, where the bank continues to maintain one of the lowest cost/income ratios among Kuwaiti banks at 26.8 % for the 1Q 2014. Despite the fact that this ratio is higher than that reported 1Q last year, yet it remains among the lowest in the banking sector. Commercial Bank of Kuwait provides its corporate and retail customers with wide spectrum of banking products and services though one of the largest full service branch networks in Kuwait. CBK seek to maximize shareholder value by demonstrating excellence in leadership, innovation, Commit-ment and Corporate Citizenship to build the future together.

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