Burgan Bank, the third-largest lender by assets in Kuwait, said its net profit for the first quarter hit KD14.3 million ($47.66 million), down 18.5 per cent owing to less income from foreign exchange.

A unit of Kuwait Projects Company (Kipco), the Kuwaiti lender said the earnings were hit by a 77.9 per cent reduction in non-interest income, which fell to KD1.7 million.

The bank said the decline was due to the reduction of net gains from foreign exchange. The fall offset a 7.4 percent increase in net interest income, which rose to 40.6 million dinars, according to the statement.

Commenting on the results, group chairman Majed Essa Al Ajeel said: "2016 started with high volatility in capital markets that negatively affected the sentiment across all levels, despite this, we see Burgan Bank group again emerging as a resilient organization with a solid business performance."

"The solid underlying performance of the group despite the slowdown in its two subsidiaries in Algeria and Iraq proves the diversifications benefits that Burgan is reaping," stated Al Ajeel.

According to him, Burgan registered a solid underlying performance, balance sheet growth and asset quality improvement characterized the group’s performance in the first quarter amid the complexity in the regional operating environment.

The asset quality continued to improve, non-performing assets (net of collateral) at 1.4 per cent while coverage ratio (net of collateral) reached 328 per cent, he added.

The consolidated financials encompass the results of the group’s operations in Kuwait, and its share from its regional subsidiaries, namely Burgan Bank Turkey, Gulf Bank Algeria, Bank of Baghdad and Tunis International Bank.-Reuters and TradeArabia News Service