National Bank of Kuwait widely missed analysts’ expectations as it posted a 48 per cent drop in fourth-quarter net profit, although the bank said its full-year earnings reflected improved confidence in the local economy.
Net profit for Kuwait’s largest lender was $142 million in the three months to the end of December, compared with $273 million in the same period a year ago, Reuters calculated based on financial statements.
Three analysts in a Reuters poll had predicted KD80.14 million ($283.2 million) net profit on average.
The bank didn’t break its results down on a quarterly basis but a statement on Wednesday said it made a full-year profit for 2013 of $844 million, down from the $1.08 billion recorded for 2012.
However, excluding the exceptional gain of $289 million which NBK recognised in 2012 from its acquisition of a majority stake in Boubyan Bank, annual profit grew 6.5 per cent, the statement added.
Profitability at NBK has been stymied in some previous quarters by political instability in the country, which has held up economic reforms and a KD30 billion($106 billion) development plan for big infrastructure projects.
But 2013 had seen the beginnings of a recovery in sentiment, with NBK reiterating in its latest earnings that while challenges remained in the domestic market, things were improving.
“We have started witnessing some acceleration in the tendering, award and execution of some of the large projects as the government proves determined to advance the execution of the development plan,” outgoing CEO Ibrahim Dabdoub said in the statement.
There was no word on Dabdoub’s potential successor at the bank in the statement. He plans to step down later this year and sources with knowledge of the matter have told Reuters that his deputy Isam al-Sager is the frontrunner pending regulatory approval.
Loans and advances were $37.9 billion at the end of 2013, up 8.5 per cent from a year earlier. Customer deposits reached $37.1 billion, a 10.2 per cent rise.
NBK’s board recommended a cash dividend worth 0.03 dinars per share and a bonus share dividend of five per cent. This was the same as the dividend recommended for 2012.