Burgan Bank, Kuwait's third-largest lender by assets, reported a 14 per cent fall in second-quarter net profit on Tuesday.

A unit of Kuwait Projects Co (Kipco), Burgan made a net profit of KD17.1 million ($56.7 million) in the three months to the end of June, compared to KD19.9 million in the same period a year earlier, it said in a bourse filing.

EFG Hermes forecast the bank would make a quarterly net profit of KD14.7 million, with HSBC expecting earnings of KD14 million.

One reason for the profit fall was a slide in net interest income, which sank to KD37.6 million in the quarter, compared to KD41.1 million in the year earlier period.

Majed Essa Al Ajeel, chairman of Burgan Bank Group said: "Burgan Bank Group continues to navigate smartly amid the evident high economic and geopolitical volatilities thanks to the risk-savvy model we have managed to build through the previous years and the prudent actions that were taken by the management.”

“The first six months of 2016 reported net income of KD31.4 million also reflects solid performance when normalized for a like-to-like comparison (eliminating non-repetitive items) especially after the sale of Jordan Kuwait Bank for more efficient allocation of capital and for continuous growth.

“Therefore, normalised net income mirrors 23 per cent growth from the first half of 2015. A very solid true performance and growth despite the sale of Jordan Kuwait Bank and amid such volatilities. The leading indicators are pointing north,” he added.

“We started 2016 which can be classified as not ordinary year in terms of volatility with a prudent outlook. Nevertheless, we have managed to report good set of results in the first quarter with net income of KD14.3 million despite taking KD5 million in precautionary reserves,” Al Ajeel explained.

“And once again, we report in the second quarter a good set of results with net income of KD17.1 million reflecting 20 per cent growth from the first quarter despite also taking KD5 million in precautionary reserves. The true solid performance is allowing us to take almost 17 per cent of our earnings as precautionary reserves and out of prudence amid such economic backdrop,” added Al Ajeel. – TradeArabia News Service & Reuters