National Bank of Kuwait, the Gulf state's largest commercial lender, widely missed analysts' expectations as it posted a 48 per cent drop in fourth-quarter net profit, Reuters calculated.

The net profit was $142 million in the three months to the end of December, compared to $273 million in the same period a year ago, Reuters calculated based on financial statements.

Three analysts in a Reuters poll had predicted KD80.14 million ($283.2 million) net profit on average.

NBK reported a full-year profit for 2013 at $844 million, down from the $1.08 billion recorded for 2012, a statement from the bank said on Wednesday.

The bank said its board was recommending a cash dividend worth KD0.03 per share and a bonus share dividend of 5 per cent. This was the same as the dividend recommended for 2012.

Ibrahim Dabdoub, NBK’s Group chief executive officer, said: “NBK’s profits for the year affirm the group’s strong financial position, market leadership and its conservative strategy, all contributing to the high credit ratings ahead of regional and international financial institutions.”

Despite the challenges in the corporate domestic market and the political instability in some of the regional markets, the bank managed to deliver a strong set of results.

“We continued to focus on core banking business across our locations. In the year 2013, excluding the exceptional gain recognized last year, NBK’s net operating income grew by 10.2 per cent year on year to $2,220 million,” Dabdoub added.

Dabdoub also confirmed that the domestic operating environment continued to improve and the overall outlook is turning more positive. “We have started witnessing some acceleration in the tendering, award and execution of some of the large projects as the government proves determined to advance the execution of the development plan.”

Strategically, Dabdoub also highlighted that NBK is progressively implementing its income diversification strategy.

“Our regional and international strategy remains on track. We are focusing our efforts on the GCC countries to leverage NBK’s strong franchise there and to benefit from the strong economic outlook and the growth opportunities available,” he said.

“In 2013 NBK Group’s international banking profits grew by 9.5 per cent year on year confirming the strength of NBK’s international operations. Moreover, our expansion into Islamic banking through the acquisition of 58.4 per cent of Boubyan Bank continues to pay off as Boubyan’s contribution to the group’s profitability and balance sheet increases over time,” Dabdoub added. - TradeArabia News Service & Reuters