NBK reports record profit of USD 412 million for 2003

Other profitability indicators were equally impressive even by international standards, with return on equity rising to 27.7% and return on assets improving to 2.27%.

'Our performance shows the substantial progress we have made this year. We generated record results and enhanced the Bank's leadership in all business segments,' said Ibrahim S. Dabdoub, CEO of NBK. 'Careful execution of a well focused strategy yielded positive results. We were able to grow while maintaining our discipline in managing risk and cost. More importantly, we took bold steps to ensure growth can be sustained in the future.'

'We are proud of our record of continuous growth in profits since the Bank's inception in 1952, which comes this year against a backdrop of interest rates remaining at a 45-year low and keeping interest margins under pressure, ' added Dabdoub. 'We were able to expand business volume and increase non-interest income, aided by positive domestic fundamentals and the change in the region's geopolitical environment that presented new opportunities for growth.'

'Our strategy of focusing on customers, anticipating their needs, and offering innovative and integrated financial solutions made it possible for us to increase our penetration of profitable segments and to deepen our relationship with valuable customers,' said Dabdoub. 'Even our regional expansion strategy is in part motivated by the desire to stay close to our customers and support their expansion efforts. It also lets us exploit growth opportunities in markets where we can leverage our competitive advantage.'

NBK boasts the widest international network among banks in the region, with branches and subsidiaries in major financial centers. During 2003, it opened an onshore commercial branch in Bahrain where its license was restricted in the past to offshore operations. Bank officials indicate that major preparatory steps were made to open a new branch in Jordan, to be followed by one in Saudi Arabia. NBK is known to be pursuing acquisitions in other markets in the region.

Being the oldest bank in Kuwait, NBK enjoys a strong franchise and dominant market share across all lines of business. NBK regularly receives top honors from reputable institutions such as Euromoney, The Banker and Global Finance that included this past year awards for Best Bank in Kuwait and the Middle East, Best Local Partner, M&A House, Internet Bank, Trade Finance Bank.

NBK also maintains the highest financial strength rating among all Arab as well as emerging market banks from international rating agencies including Moody's, Standard & Poor's and FitchRatings. NBK's strong capital base, strength and depth of its management and its clear strategy are often cited as fundamental strengths underlying the bank's superior ranking. During 2003, Standard & Poor's raised NBK's long-term credit rating, based on its strong financial profile, prudent risk management practices and healthy profitability. Both Moody's and FitchRatings maintained their ratings after having upgraded them in the prior year.

NBK is the largest and oldest indigenous bank in Kuwait and the Arabian Peninsula. By end 2003, first tier equity reached USD 1.7 billion and its assets increased to USD 18.4 billion. With market value of USD 7.3 billion, it is the largest and most profitable publicly held company in Kuwait and among the top companies in the Middle East.