Gulf Bank receives approvals for subordinated tier 2 bond issuance

KUWAIT: Gulf Bank yesterday announced that it has received approvals from the Central Bank of Kuwait (CBK) and Capital Markets Authority (CMA), as well as the approval of the Bank’s Ordinary General Assembly meeting held on 9/3/2016, regarding the issuance of a Tier 2 Basel III compliant subordinated bond for up to KD 100 million. The Bank plans to use the proceeds of the offering for general corporate purposes and to strengthen its capital adequacy.

KAMCO Investment Company (KAMCO) and Kuwait Financial Centre (MARKAZ) are the joint lead managers. Gulf Bank’s Capital Adequacy ratio as of 31 December 2015 was 15.6%, compared to the regulatory minimum of 12.5%. The Tier 1 Capital Adequacy ratio was 14.4% which is also above the regulatory required minimum of 10.5%. Omar Kutayba Alghanim, Chairman of Gulf Bank said, “We are pleased to have received approvals on the issuance from the CMA and CBK. This step aims at supporting the Bank’s future corporate plans, as well as strengthening its capital adequacy ratios. We thank KAMCO and MARKAZ for their cooperation as joint lead managers. I would also like to extend the Bank’s appreciation to our regulators for their continued support and commitment towards Kuwait’s financial institutions.” Cesar Gonz·lez-Bueno, Chief Executive Officer of Gulf Bank said, “We closed 2015 on a positive note and have transformed the Bank quite dramatically since 2012.

Today, we have a stronger Consumer Banking franchise and a more diversified Wholesale Banking business. We reduced our non-performing loans and increased our loan loss coverage. This approval to issue a Tier 2 Basel III subordinated debt will serve to further develop and strengthen the Bank.” At the Bank’s recent Annual General Meeting, shareholders approved the Bank’s financial results for the year ended 31December 2015 and formally endorsed the board of directors recommendation for a cash dividend of 4 fils per share.

For the year ended 31 December 2015, Gulf Bank’s operating profit before provisions were KD 108 M and net profit grew by 10% compared to the prior year to KD 39M. The Bank is rated “A+” by Fitch ratings, “A3” by Moody’s, and “A-”, by Standard & Poor’s. The ratings reflect the restructuring of the credit portfolio, lower risk appetite and adequacy of the capital buffers. To achieve these ratings in a time of global turmoil is a testament to the healthy growth and the transformation the Bank has completed. In 2015, the Bank was recognized by receiving 22 major awards reflecting all the major operations of the bank, including consumer banking, wholesale banking, products, performance, marketing and human resources. These included awards from respected international publications such as The Asian Banker; International Finance Magazine (IFM); International Banker; and Banker Middle East.

Back to top button