NBK reports net profit of USD 876 million for 2006

Net profits rose to USD 876 million (KD 253 million), up 23% from last year. NBK also reported an improvement in return on average assets to 3.6% and return on equity to 38.6%.

Ibrahim S. Dabdoub, NBK's Chief Executive Officer, said 'We are very pleased to deliver yet another year of record profits, exceptionally strong growth, and superior returns to shareholders. The consistent growth in our profitability since the Bank's inception is something we are very proud of and work hard to maintain. It takes focus and a clear strategy to improve each of our businesses and maintain our solid, market leading franchise. At the same time, diversification of our revenue base ensures balanced growth that can be sustained going forward, while discipline in managing liabilities, costs, and risks remains an integral part of our performance driven culture.'

'Our overall results continued to benefit from a positive economic environment despite some challenges. High oil prices and strong investor confidence have produced unprecedented economic growth in the region. Project activity, spending levels and employment growth contributed to a very favorable environment and allowed all key business drivers, such as loans, credit card accounts and sales volume, deposits, and assets under management to show continued momentum. We expect the economic boom in the region to continue over the medium term and to support our ability to deliver outstanding results to shareholders,' added Dabdoub.

Commenting on NBK's strategy Dabdoub noted, 'There are three pillars to our strategy: pursue organic growth both domestically and regionally, expand our presence in the region through acquisitions in promising markets, and invest in people, technology, channels and systems to serve our customers more effectively, and thus maintain our market lead and the strong momentum we have built over the past few years.'

NBK is pursuing an ambitious expansion strategy in both its domestic market and across the region. During 2006, it increased the number of branches in Kuwait to 55, keeping NBK the bank with the largest distribution network in the country. In the last two years, the Bank acquired a 20% stake in the International Bank of Qatar and a 75% controlling share in Credit Bank of Iraq. It also set up new operations in Jordan, Saudi Arabia and China. NBK's international network also covers New York, London, Paris, Geneva, Lebanon, Bahrain, and Singapore.

'We are very pleased with the positive results from the new markets we entered recently that have surpassed our expectations. While our international network has long played an important role in diversifying our income sources and supporting our domestic businesses from treasury, trade finance and corporate banking to private banking and wealth management, our expanding regional presence allows us to benefit from emerging growth opportunities in highly promising markets that we know quite well,'

noted Dabdoub.

NBK's long-term credit rating was upgraded by Moody's during 2006 to Aa3 from A2, a reflection of its strong financial position and long term positive outlook. This was in line with the solid reputation NBK has enjoyed over the years, having maintained the highest credit ratings of all banks in the region and emerging markets from the rating agencies Moody's, Standard & Poor's, and Fitch Ratings. NBK's solid position is supported by its high capitalization, prudent lending policies, and its systematic approach to risk management, in addition to the Bank's recognized management stability and excellence.
NBK's total assets reached USD 27.3 billion (KD 7.9 billion) at the end of 2006, while its shareholders' equity stood at USD 3.2 billion (KD 915 million). NBK is the largest company on the Kuwait Stock Exchange with market capitalization of USD 14.6 billion at the end of 2006.