Khaleeji Commercial Bank reports 31.0% increase in net profit to BD27.3m

This is in spite of a net loss of BD5.9m in the last quarter due to additional provisions to support the financial position of the bank. Total assets also grew to BD465m, an increase of 72.5% compared to last year.

Return on average assets reached 7.4%. Islamic financing assets have grown by BD75.2m, i.e. 85% compared with 2007. Total deposits (including Unrestricted Investment Accounts) have also grown by 208.9%. Total operating income reached BD47.7m, i.e. 59.3% compared with 2007.

The Bank continued to maintain strong liquidity and capital positions with capital adequacy ratio in excess of 40%. Based on these good results the Board of Directors has recommended to the Bank's AGM a dividend of 20% (comprising 15% cash and 5% bonus shares) after obtaining all regulatory prior approvals.

In addition, the Board has allocated sufficient provisions this year as a precautionary measure against any possible effects on the Bank's operations due to the current financial crisis.

Dr. Fuad Al-Omar, Chairman of Khaleeji Commercial Bank, said, "We are pleased with the results for 2008, especially given the extraordinarily difficult market conditions. This has been a year of unprecedented dislocation in global financial markets, and we have seen the impact of these conditions gradually reaching our primary markets in the GCC. Nevertheless, we have been proactive in ensuring that the Bank maintains strong liquidity and capital positions to grow and expand our business and customer base. We will continue to build on our institutional capacity to meet the challenges ahead."

CEO and Board Member of Khaleeji Commercial Bank, Mr. Ebrahim H. Ebrahim commented on these results saying:

"Our results over the past year reflect the Bank's steady growth in both investment and commercial banking. Return on average equity reached 20%, and the earnings per share has grown by 9.2%, compared with 2007, to reach 27.8 fils per share. We launched a new restricted investment accounts (RIA 5 - North Gate), enabling our clients to actively participate and benefit from regional economic growth. We also structured and launched two investment products, Jawhara Greens in Qatar ($250m) and Global Logistics Navi Mumbai in India ($430m) in addition to the successful closing of $163m for Danat India Investment Company. Moreover KHCB announced its equity investment in Locata Corporation, domiciled in Canberra in the Australian Capital Territory which is specialist in high-technology positioning."

Mr. Ebrahim continued, "In a difficult year, we were able to increase our customer deposits and unrestricted investment accounts by over 209.8% to BD231.8m and continued to grow our financing assets, which reached BD163.6m, a growth of 85% over 2007. Our customer service and access were enhanced by launching new electronic and SMS banking services as well as installing new ATMs."

"We are cautiously optimistic about the prospects for 2009. Our strategy is to further expand our business and our customer base in Bahrain and the broader GCC. Given the current undervalued market environment and our strong financial position, we anticipate being able to exploit new opportunities as they arise in 2009," he added.