National Bank of Kuwait (NBK), the largest Kuwaiti bank and the highest-rated in the Middle East, reported net profits of $431.2m (KD120.8m) for the first half of 2012 compared with $523.5m (KD146.7m) for the same period in 2011. NBK's 1H 2012 profits were held back by the $96.4m (KD 27.0m) judgmental provision charges, reflecting the negative economic and geopolitical developments occurring both domestically and in the region and their potential implications on an already stagnant operating environment. As of end of June 2012, NBK Group's total assets reached $51.1bn (KD14.3bn) up 4.4% compared to June 2011, while total group shareholders' equity increased by 4.9% year-on-year to $8.2bn (KD2.3bn). NBK's net operating income recorded a solid $943m, in line with last year's figure. Ibrahim Dabdoub, NBK's Group Chief Executive Officer said "NBK continues to operate and deliver in a very challenging environment both domestically and regionally. Our first half profits were negatively affected by heavy judgmental provision charges. We have opted to set aside $96.4m in judgmental provisions in face of a further potential deterioration in our operating environment. Domestically, a negative outlook is inevitable where Government spending remains dormant, tendering of new projects significantly lags and asset values continue contracting as the local stock market considerably underperforms. Add to that, the geopolitical developments that are putting further pressures on both the local and regional economic activity". "NBK will continue to focus on core banking activities both in and outside Kuwait, with a clear strategy that aims at diversifying our income sources. During the first half of 2012 profits from our international operations grew by 44% year-on-year. Additionally, our recent move to increase our stake in Boubyan Bank strengthens our presence in Kuwait's Islamic banking market and opens new growth prospects for the Group" Dabdoub added. Dabdoub also highlighted that NBK's strong financial position and healthy profitability in such turbulent times are testimony to our healthy balance sheet and sound earning generation capabilities. NBK's clear strategy and strong risk management practices helped the bank sustain its financial performance and resilient position through crises and will continue to preserve our position as a leading regional bank. NBK has the widest banking presence in Kuwait with 67 branches, which together with its growing international presence totals 176 branches worldwide. NBK's international presence spans many of the world's leading financial centers including London, Paris, Geneva, New York and Singapore, as well as China (Shanghai). Meanwhile, regional coverage extends to Lebanon, Jordan, Iraq, Egypt, Bahrain, Qatar, Saudi Arabia, the UAE, and Turkey. NBK continues to collectively enjoy the highest ratings among all banks in the Middle East from the three international rating agencies; Moody's, Fitch Ratings and Standard and Poor's. The Bank's ratings are supported by its high capitalization, prudent lending policies, and its disciplined approach to risk management, in addition to its highly recognized and very stable management team. Ameinfo
