Mar. 29--KUWAIT -- Following the set of General Assemblies of Kuwaiti banks as the fiscal year reached its end, Al-Ahli bank held its ordinary and extraordinary general assembly yesterday at the bank's main branch. The General Assembly approved a cash dividend of 20 percent (20 Fils per share) and bonus shares of five percent for shareholders who have been registered in ABK records on the date of holding the General Assembly for the financial year ended 31/12/2008.

Ahmed Yousuf Behbehani, Chairman of the Board, said that "During 2008, ABK succeeded in achieving growth in its core banking business. The core operating profits increased by 14 percent during 2008 to reach KD 72 million. Earnings per share were 42 fils.

He added that the bank has taken precautionary measures and additional provisions of KD 42 million to face any unexpected effects of the global financial crisis on the local economy and to take into account any unexpected future events that affect the growth of the local economy.

Extra cautious, extra prudent," said ABK's CGM and CEO Colin Plowman as he described the bank strategy for the upcoming fiscal year. He didn't specify the recent crisis' effects on the bank or if the bank was uncovered by investment companies regarding the credit crisis.

We are facing problems like all other banks. It's a chain," he said. Al-Ahli bank was like other Kuwaiti banks damaged during the crisis due to a credit competition that took place in the country since inflation began in 2007 and early 2008.

After a strong start in 2008, market conditions deteriorated rapidly after the summer, restricting growth and profitability across operations. Margins have been compressed and earnings were reduced in our traditional growth areas of corporate and retail banking," Behbehani added.

Regarding the bank's performance during the first quarter of 2009, Behbehani admitted that profits would be less than those during the first quarter of 2008. Deputy Chief General Manager Abdulla Al-Sumait stated that the bank was willing to study companies' situations before approving or denying loans.

The challenge for ABK in 2009 will be to enhance growth and value in these essentially sound businesses through a process of prudent control of risk, cost and capital allocation. Our loan portfolio will be subject to rigorous scrutiny and will be further rationalized where necessary. Costs surplus to our core businesses will be reassessed and reduced wherever possible and capital will be directed to secure and well-collateralized projects. These are necessarily cautious and sensible steps in the current e nvironment.

During 2009, specific initiatives will be made by the bank, including the appointment and training of new Kuwaiti graduates and supporting national manpower," stated Behbehani.

The development of risk control reinforced the internal control measures and helped protect the bank against the effects of the world crisis. Furthermore, the measures set forth by the bank to cope with the expansion plans and business lines in retail and corporate banking in addition to retail branch networks have contributed to the enhancement and strength of ABK's position," he added. Banks are preparing to face a difficult year where all precautionary weapons will be needed to maintain positions; otherwise, large losses will be inevitable.

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