Kuwait's Gulf Bank said on Saturday it would focus on retail and corporate banking at home and ruled out following regional rivals' foreign expansion plans for now as its third-quarter profit surged.
Kuwait's third-biggest lender by market value beat an analyst's forecast in the third quarter with a 42.5 percent rise in profit to $132 million (36.8 million dinars), Reuters calculated based on nine-month profit $376.3 million released by the lender.
Banks across the Gulf Arab region are opening overseas branches and acquiring foreign rivals to gain scale to lend for the region's infrastructure project and fend off growing competition from Western lenders. National Bank of Kuwait the country's biggest lender, bought AlWatany Bank of Egypt earlier this year, beating bidders including Commercial Bank of Kuwait.
But Gulf Bank has no plans for acquisitions or foreign expansion for now as it chases opportunities in Kuwait where the economy is booming on oil prices that have quadrupled since 2002, new Chief Executive Louis Myers said.
"Gulf Bank is first and foremost a local bank," he said. "We believe that there is substantial opportunity in Kuwait in terms of an expansion in the economy forecast for the next couple of years, or by growing the market share in certain key segments," Myers said.
Gulf Bank wants to expand its retail and corporate business, and ride the expanding real estate sector in Kuwait, Myers said. The value of real estate sales in Kuwait surged 66 percent in the year to August, according National Bank of Kuwait.
"We are not actively looking for acquisitions or a physical presence in the Gulf countries," Myers said, adding Gulf Bank would not rule out foreign expansion at a stage later.
"In general, our business lines are performing very well. We see some flattening of consumer credit growth this year but asset growth is very solid," said Myers, who joined Gulf Bank from Saudi Arabia's National Commercial Bank in March. Loans grew 21 percent in the first nine months, although consumer credit growth would be slower this year because the business maturing after a boom in the past few years, Myers said.
Kuwait's central bank worried about inflation has been trying to curb credit growth by keeping the benchmark discount rate at 6.25 percent for more than a year. Gulf Bank expects a record profit in 2007 despite a traditionally slower fourth quarter, Myers added. Its profit in the three months to September 30 beat a 29.10 million dinar forecast by Kuwait investment bank Global Investment House in a Reuters survey last month.
Net assets rose by 37 percent to $17.5 billion in the first nine months, while return on assets was 3.14 percent. The bank published its earnings report in US dollars and Reuters' conversions to Kuwaiti dinars are at the reference rate of 0.27875 per dollar the central bank set on Thursday.