Gulf Bank Chairman assures that bank enjoys good financial status

All customer deposits and accounts are guaranteed and safeguarded. The Bank is carrying out its operations in the normal manner at all its centers and branches. I would also like to stress that the Bank's major shareholders strongly support it, and are fully prepared to support its financial position at any time such a support is required.

Gulf Bank, over the past years, has maintained a strong foothold as financially credit worthy, and has been highly rated by international rating agencies. Over the past years, the Bank's operations witnessed tremendous, distinctive development, and the Bank effectively contributed to supporting its customers, and the Kuwaiti economy at large, while upgrading its products and services.

The loss incurred by certain customers as a result of derivative transactions, and their abstention from settling their financial obligations, caused the Bank to meet such liabilities to international markets, so as to safeguard its image and credibility vis-a-vis foreign banks. This action, adopted by the Bank, affected the strength of its financial position, but without affecting its daily transactions, or its ability to provide its customers with the necessary liquidity. The Bank will continue to provide its services as usual, including loans and credit facilities, and will also take all legal actions necessary to recover such amounts from those customers.

We, at the Board of Directors, would like to reiterate that we are considering a set of alternatives and options to support the Bank's financial position, while taking all actions necessary to support the Bank's operations. We will continue to adopt the best practices and procedures of internal financial control in all the Bank's business units. The Board of Directors would like to commend the great support, and prudent supervisory approaches that the Central Bank of Kuwait has given to Gulf Bank, in particular, and all other banks and financial institutions, at large, thus ensuring the strength of the Kuwaiti banking system, and mitigating the effects of the global financial crisis on it.

The change in the Board of Directors was an action required to address the Bank's new situation. It is meant to move in the right direction towards overcoming the current situation, and to put the Bank in the right track towards better supporting its customers, and the Kuwaiti economy, in general, eventually realizing the best results for its shareholders.

The Board of Directors would like to extend our thanks and appreciation to Mr. Bassam Yusuf Alghanim, Former Chairman and Managing Director of the Bank, for his efforts towards serving the Bank, and for his bold and wise decision to select shouldering the responsibility and submitting his resignation from his office and the membership of the Board. We wish him all success.

In conclusion, the Board of Directors would like to extend our thanks and appreciation to HE The Governor of the Central Bank of Kuwait, for the constant support for the Bank, his assurance of guaranteeing the customers' deposits and accounts, within Kuwait, and abroad, and his appointment of a financial controller and specialist consultants to study the positions and procedures of the Treasury Department of the Bank, as well as providing the best solutions that help the Bank avoid any such future problems.

We would also like to extend our thanks to the customers for their confidence vested in the Bank and its services, as well as their constant support. We do hope that, as soon as possible, the Kuwaiti Government will take the actions necessary to assure all parties dealing with the banking and financial system, so as to overcome the effects of the global financial crisis on the Kuwaiti economy.