Commercial Bank of Kuwait Operating Profit before Provisions
KD 24.689 Million for 1Q2011
Commercial Bank of Kuwait announced an operating profit before provisions for the period of KD 24.689 million (2010: KD 22.024 million). This was allocated as provisions against the loan and investment portfolios resulting in a net profit attributable to shareholders of the parent bank for the three months to 31st March 2011 of KD 1.332 million (1Q2010: Net Loss KD 1.454 million).
In his comment on the financial results for the period, Chairman Mr. Ali Yousef Al Awadhi said that the bank has adopted a prudent policy towards building up a strong provision base and took additional judgemental provisions of KD 12.4 million over and above regulatory requirements explaining that the bank has total provisions for credit facilities of KD 180.5 million which includes KD 53.9 million of additional judgemental provisions taken over and above regulatory requirements. Al Awadhi noted that results were in line with expectations and that other performance indicators showed a return to profitable growth with net interest income of KD 20.4 million up 8% on last year and other operating income up 5%.
Al Awadhi went on to say that Commercial Bank is moving well ahead according to its planned strategy that aims at returning the Bank back to higher profitability rates generated from core banking activities. Al Awadhi noted that Commercial Bank continues to develop and upgrade its services and product offerings to attain customers' utmost satisfaction, explained that the bank continues to participate in the financing of mega development projects under the State's ambitious development plan and works closely with its corporate customers to meet their financing requirements. Al Awadhi explained that the improvement in the economic and business environment will positively reflect on the banking sector and on Commercial Bank. Commercial Bank's financial position and balance sheet is strong with additional judgment provisions that provide the bank with more comfort when taking up businesses, added Al Awadhi noting that when these provisions are no longer required they will be released to the income statement.
The bank continues to demonstrate its cost leadership with operating expenses down 8% on 1Q2010 and staff expenses down 6% for the period. Operational efficiency is a competitive advantage for the bank which continues to maintain one of the lowest cost/income ratios with 21.64% for 1Q2011.
Asset quality indicators showed improvement with non-performing loans down during the period ended 31 March 2011 with a coverage ratio including collateral of 116% for NPLs.
Commercial Bank's total assets at the end of March 2011 reached KD 3.77 billion (3/2010: KD 3.65 billion) with an increase of 3.3% with shareholders equity of KD 459.7 million (3/2010: KD 441.2 million) with an increase of 4%. The capital adequacy ratio at March 2011 is 20.42% (3/2010: 19.00%) which exceeds the minimum 12% required by the Central Bank of Kuwait. The bank continues to have a strong capital base with more than twice the international ratio required by Basel II.
Commercial Bank of Kuwait took the opportunity to thank the bank's valued customers for their trust and confidence, the Executive Management team and staff for their hard work and loyalty and shareholders for their continued support and faith.
By operating the second full service branch network in Kuwait, Commercial Bank of Kuwait offers customer state-of-the-art banking products and services. For further information on Commercial Bank of Kuwait products or services please contact 1-888-CBK or visit www.cbk.com.
