National Bank of Kuwait, the country's biggest lender, is delaying expansion plans due to regional unrest, its top official said on Thursday. Chief Executive Ibrahim Dabdoub also said he expects flat profits in 2011. Political unrest in the Middle East and North Africa, including protests in Kuwait, has raised risk premiums and sent many investors to the sidelines.
"Our expansion plans have been regional. At the moment, we are putting all physical expansion plans on hold," he said. "We may revisit when things subside next year." The bank said its 2011 profit forecast was partly as a result of limited loan growth while Chief Executive Ibrahim Dabdoub added it was well capitalised and had no plans for a bond issue this year.
"Overall our bottom line will be more or less similar to the $1.1 billion last year, which is not bad," he told Reuters on the sidelines of a banking conference. The bank reported full year net profit of 301.7 million dinars ($1.08 billion), up from 265.2 million dinars in 2009.
NBK launched a heavily oversubscribed rights issue last year which was partly aimed at funding expansion plans in Kuwait and externally. Dabdoub said the lender was targeting loan growth of 10 percent to 15 percent this year. "The loan portfolio of most banks in the region has been flat. We haven't seen any economic activity to stimulate growth significantly," he said. NBK shares were trading 1.7 percent lower on the Kuwait stock exchange at 0900 GMT. The broader index was down 0.5 percent.
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