AlQabas carries comments by Mr. Ali Rashid AlBadr, Chairman of GB in its Monday issue.
He said that 1Q10 operating profit was some KD44.3 million versus KD15.6 million in 1Q09. This year's operating profit included KD14 million from the sale of investments. Mr.AlBadr said that the Board decided to devote almost all of the first quarter's operating profit to strengthening the loan loss reserve to cover certain existing facilities. Average capital adequacy is up to 17.4% from 15.9% at FYE 09.
He noted that the economy was turning and that the bank's prospects for the remainder of the year looked good.
During 2009, GB took net provisions of some KD111.1 million = KD148.7 mm specific provisions (for identified weak credits) less reversals of KD 39.6mm from general provisions and loan write offs of KD2.1 mm. 1Q10 provisions are roughly 30% of full year 2009, which suggests that GB has some provisioning catch up to do. Perhaps, the remainder of its AlGosaibi/AlSanea exposure which the Central Bank has mandated must be provisioned at 100% by FYE 2010 as well as local Kuwaiti companies. FYE09 LLR to Gross Loans stood at 13.8%. So there is some real pain there.
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