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Feb 07 2012

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ABK Records KD 79.6 Million Operating Profits in 2011 With a Growth Rate of 9%

Net profit amounted to KD 50.3 million with earnings per share of 35 fils, total assets of KD 3.08 billion, and shareholders' equity of KD 491 million.

The Board of Directors has recommended to the General Assembly a cash dividend at 15% of the nominal value per share (15 Fils per share) and 5% bonus shares, to be distributed to the shareholders registered in the Bank's records as on the date of the General Assembly Meeting. Such recommendation shall be subject to the approval of the ABK General Assembly Meeting and the competent authorities.

Commenting on these financial results, Mr. Ahmed Yousuf Behbehani, the Chairman of the Board, stated: Despite the difficult conditions, ABK managed to increase its operating profits from KD 73 million in 2010 to KD 79.6 million in 2011, with a growth rate of 9%. "We remained prudent and took additional voluntary general provisions to further strengthen our balance sheet against unexpected market events, and reported a net profit of KD 50.3 million."

Our capital adequacy ratio of 25.1 percent is well in excess of local and international regulatory requirements, and our very positive liquidity leaves us strongly placed to take full advantage of opportunities arising when markets return to more positive sentiment.

About the reasons behind ABK success, Mr. Behbehani pointed out: "This good performance is the fruit of the strategic policies and decisions adopted by the Bank over the past few years. We have always been conservative in our approach and of late this principle has been applied even more stringently. Prudence is at the core of the Bank's operating philosophy and has been instrumental in the results we have achieved. We maintained our strengths in corporate banking - by far our main source of revenue, expanded our retail branch network, and grew the retail customer base.

Operationally, Mr. Behbehani explained that the efficiency and quality customer service were the driving factors to achieve these goals. The bank also invests considerably in its human resources. ABK employees are highly trained to be qualified for providing quality customer service.

Our strengths are further underlined by the investment grade (A2) that the Bank's international rating agencies have maintained, with Stable Outlook.

As for the future economic expectations on world and local levels, Mr. Behbehani stated that: We began the year with cautious optimism that the worst of the global financial turmoil was behind us. However more severe threats to international economic stability have emerged in the Euro zone crisis and may have negative effects on the local economies. The risks have escalated to the sovereign level, with nation-states and affected many countries in Euro zone such as Greece, Italy and Spain, with increasing probability of another economic crisis.

As for the local economy, Mr. Behbehani stated that the impact of economic recession of Euro zone eventually would be relatively limited, in the sense that we do not have significant exposure to the indebtedness of the countries concerned, either inter-government or as a banking sector. Kuwait's economic fundamentals are strong and resilient to cope with depressed oil prices. However, the acceleration of the planned infrastructural mega-projects will contribute significantly to re-igniting the domestic economy and stimulating the banking sector through fresh demand for project finance.

He concluded by stating that ABK will be well placed to take a lead role in the development and support of national economy. We can take reassurance from the inherent solidity of our operations, which have proved their value and efficiency in enabling us to cope with the world financial crisis, giving us more support and confidence to face the challenges ahead.