Kuwait Commercial Bank Plans to Book Provisions for Most of 2012
February 08, 2012, 4:38 AM ESTBy Dahlia Kholaif
Feb. 8 (Bloomberg) -- Commercial Bank of Kuwait SAK plans to continue booking provisions in the first three quarters of 2012 as the process of “cleaning up balance sheets” takes longer than expected, the acting chief executive officer said.
Regional and international “economic situations didn’t look that bad a year ago,” Elham Mahfouz said in a phone interview in Kuwait City yesterday, citing popular unrests in the Middle East and North Africa region and the debt crisis in Europe. The bank set aside 101.3 million dinars ($366 million) as provisions against loans and investment portfolios.
Lending is expected to grow by less than 5 percent this year and the bank foresees a “slight” increase in profit, Mahfouz said. Profit plunged to 810,000 dinars last year from 40.5 million dinars in 2010, the bank said on Feb. 5.
“We are hoping delayed mega projects in Kuwait’s water and electricity sectors see the light soon,” Mahfouz said, referring to Kuwait’s 30.8 billion-dinar development plan seeking to modernize and restructure the country’s oil-dependent economy. “This will get the economy wheel rotating, which will positively benefit everyone, including us.”
The shares dropped 2.7 percent to 710 fils at 1 p.m. in Kuwait. The stock has lost 10 percent this year compared with a 0.4 percent gain for the benchmark KSE Index.
--Editors: Shaji Mathew, Jennifer M. Freedman
To contact the reporter on this story: Dahlia Kholaif in Kuwait at dkholaif@bloomberg.net
To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net
