Khaleeji Commercial Bank increases net profit by 161% to BD20.8m and declares 15% cash dividend

Net income for the year increased by 161% to BD20.8m compared to BD8m in 2006. The net income provided a return on average equity of 23.4%. Total assets also increased significantly to BD269m, a growth of 180% compared to the previous year. Total shareholders' equity grew by 217% to BD135m following a capital increase from BD30m to BD100m during the year. Based on the excellent results declared by the Bank, the Board of Directors have recommended, for the first time, a cash dividend of 15%, subject to necessary regulatory approvals.

Dr Fuad Al-Omar, Chairman of Khaleeji Commercial Bank, said, "These are outstanding results achieved by executing clearly defined strategy to position the Bank as a leading regional Islamic financial institution delivering innovative Islamic financial products and services to customers in the GCC and MENA regions."

"2007 was an important year in the growth and development of Khaleeji Commercial Bank. In April, we increased our paid up capital from BD30m to BD100m, enhancing our ability to compete better and pursue our strategy more aggressively. As the Bank scaled up, several reputable and large regional financial institutions and corporate houses became strategic shareholders in the Bank. With increased capital and strong partnerships with strategic shareholders including Gulf Finance House, Khaleeji Commercial Bank is now set to deliver further innovation and diversity of product and service into the Islamic financial market. We also expect to widen and diversify our shareholder base by listing on regional stock exchanges, subject to regulatory approvals. We will continue to build the Bank's institutional capacity by investing in our human capital and technology."

Mr Ebrahim H Ebrahim, General Manager, Khaleeji Commercial Bank, added, "Our third year of operations has been a year of phenomenal progress. The results that we have announced today reflect our ability to meet the market demand for innovative products and services. They are also a testament to the hard work and dedication of our talented staff and the support of our Board of Directors and shareholders. Our staff strength almost doubled to 72 during the year.

"We are pleased to note that both our investment banking and commercial banking businesses have performed exceedingly well during the year. Through the launch of its Restricted Investment Accounts, KHCB has brought the opportunity of investing in the rapid growth of the GCC and MENA economies to a new class of investor, The products included among others, Danat India, a $163m fund investing in middle income housing in India as well as Janayen, a $55m fund investing in labour accommodation in the GCC. We have also seen rapid growth of our customer deposits, which grew over 188% during the year to more than BD64 million and Islamic financing assets have grown by over 463%.

"KHCB is at a crucial stage in its development and we expect to continue our growth, capitalising on opportunities in the region as well as outside. The coming year promises more developments, with the planned move of our operations to the Bahrain Financial Harbour, the launch of more distribution channels for our customers such as new branches, ATMs, worldwide access to accounts through Visa branded ATM services and digital access through mobile and e-banking.