KUWAIT CITY - National Bank of Kuwait, the emirate's largest lender, on Thursday reported a 39.5 percent slide in second quarter net profit as the bank took huge provisions, a statement said.
NBK's profit in the first half of the current year also dropped 17.7 percent as the bank cited "a challenging operating environment and weakening outlook."
The bank posted a net profit of 39.8 million dinars ($141.6 million) in the April to June period of 2012 compared to 65.8 million dinars ($234.2 million) in the same period last year, the bank said in a statement.
"NBK continues to operate and deliver in a very challenging environment both domestically and regionally," CEO Ibrahim Dabdoub said
"Our first half profits were negatively affected by heavy judgmental provision charges. We have opted to set aside $96.4 million in judgmental provisions in the face of a further potential deterioration in our operating environment," he said.
In the first six months of this year, NBK posted 120.8 million dinars ($430 million) down 17.7 percent on 146.7 million dinars ($522 million) in the corresponding period of 2011, the statement said.
"Domestically, a negative outlook is inevitable where government spending remains dormant, tendering of new projects significantly lags and asset values continue contracting as the local stock market considerably underperforms," he said.
NBK total assets reached $51.1 billion on June 30, up 4.4 percent from a year ago, while the total shareholders' equity increased 4.9 percent to $8.2 billion.
The bank posted a record $1.087 billion in net profit for the full year in 2011, an increase of just 0.2 percent from 2010.
The largest financial institution in Kuwait and one of the largest in the Gulf, NBK has branches in several Arab cities and in foreign cities including New York, London, Paris and Geneva.