Kuwait: Kuwait's Gulf Bank expects to post a profit in the first quarter after a bailout by shareholders to cover $1.29 billion (Dh4.73 billion) in derivatives losses, its chairman said on Saturday.
Trading in Gulf Bank, in which sovereign wealth fund Kuwait Investment Authority (KIA) owns a 16 per cent stake after a restructuring plan ordered by the central bank, could resume "within days", Kutayba Al Ganem said.
"There will be profit in the first quarter," Ganem said on the sidelines of a shareholders meeting. "Profit will be better than last year." He did not elaborate.
In 2008, Kuwait's fourth-largest bank by market value made a full-year net loss of 359.5 million dinars ($1.24 billion), compared with a net profit of 130.44 million dinars the previous year, citing losses on derivatives transactions.
In January, it made net loss of 1.6 million dinars, a relative improvement on fourth-quarter losses of 445.5 million dinars, the lender said last month.
In December, shareholders approved a rescue plan worked out by the government to raise 375 million dinars in an emergency rights issue to cover derivatives losses of the same amount. In the following month, KIA bought the remaining unsubscribed stock, taking a 16 per cent stake in Gulf Bank.
In October, the central bank halted trading in Gulf Bank until the end of a restructuring plan that saw Chairman Bassam Al Ganem replaced by his brother Kutayba.
"Stock trading will start soon after this meeting by a central bank decision," Ganem told shareholders on Saturday. "I think trading will resume within days."
Ganem voiced optimism the lender is now able to weather market conditions and said it would expand its activities and seek more opportunities in Kuwait in 2009.
"The bank now has a capital adequacy ratio of 13.82 per cent," he said.
"This is a strong balance sheet that will give us the financial strength and flexibility to weather the continuing turbulence and uncertainty of the global financial markets."
