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Kuwait’s Gulf Bank Q4 Net Profit Climbs 10.7%, Proposes Stock Dividend

Kuwait’s Gulf Bank Q4 Net Profit Climbs 10.7%, Proposes Stock Dividend

Net profit for the three months to the end of December was 8.97 million dinars ($30.4 million), compared to 8.1 million dinars in the year-earlier period.

Kuwait’s Gulf Bank, the country’s fourth-largest lender by assets, reported a 10.7 per cent rise in fourth-quarter net profit on Tuesday, and said it had recovered from the global financial crisis.

The bank received a KD375 million ($1.27 billion) emergency capital injection from the Kuwait Investment Authority in January 2009 after a derivatives loss of the same amount, one of the only occasions that a Gulf government had to step in with direct support for a bank due to the financial crisis.

Gulf Bank undertook a major restructuring and its profits have strengthened in recent quarters, helped by a more buoyant local economy that has replenished deposits and bolstered lending growth.

“Gulf Bank has culminated its transition and has started a new path after completing its recovery,” Chairman Omar Kutayba Alghanim said in the bank’s 2014 earnings statement.

“Far seem today the difficult times when our NPLs (non-performing loans) reached 30 per cent. Now we have all the elements in place to grow better and faster.”

The bank’s NPL ratio — the amount of bad loans as a percentage of its total lending — dropped to 3.2 per cent at the end of 2014 and its coverage ratio, which signifies how much cash the bank set aside to cover those bad loans, stood at 266 per cent, the statement said.

Net profit for the three months to the end of December was KD8.97 million ($30.4 million), compared with KD8.1 million in the year-earlier period, according to Reuters calculations.

Gulf Bank did not provide a quarterly break down so Reuters calculated the figures based on the bank’s financial statements.

Net profit for 2014 was KD35.5 million, up 10 per cent from the previous year, a statement from the bank said.

It said loan growth was nine per cent during the year. This was higher than the 5.2 per cent growth for the wider banking sector in November, according to the latest data from the Kuwait central bank.

Gulf Bank also said its board proposed a stock dividend of five free shares for every 100 held for 2014. This was in line with the recommended payout for 2013.

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