FINANCIAL REVIEW - Commercial Bank of Kuwait

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FINANCIAL REVIEW
Commercial Bank of Kuwait

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2011 Statement of Income
The profit attributable to Shareholders of the Parent Bank for the year is KD 0.810 million.
Net interest income of KD 91.6 million was KD 3.7 million or 4% higher than 2010. The average yield on interest
earning assets declined to 3.99% from 4.15% in 2010. The average cost on interest bearing liabilities fell to 1.30%
down from the 1.61% of 2010. The bank’s net spread was 2.68% and the net interest margin was 2.76%.
Net gains from dealing in foreign currencies increased by KD 0.7 million or 15%. Dividend income of KD 3.2 million
was up 61% on 2010.
Staff expenses decreased KD 1.6 million or 9% on 2010. General and administration expenses for 2011 were slightly
up on 2010.
The charge for Impairment and other provisions for credit facilities and investments was KD 100.4 million for 2011, an
increase compared to the KD 51.2 million of 2010.
The Bank continues to enforce a strict credit policy and complies fully with the Central Bank of Kuwait provisioning
requirements. Total provision cover for 2011, including general provisions, was 92% of non-performing loans. Nonperforming
loans decreased KD 243.6 million to KD 154.0 million.
2011 Balance Sheet
Total assets increased by KD 91.7 million or 2% on 2010 with an increase in Due from banks and other financial
institutions and Investment securities.
The Bank continues to comply with the loans to deposits ratio introduced by Central Bank of Kuwait in 2004, which
requires Kuwaiti banks to maintain an average ratio for loans to deposits of 85%.
The capital adequacy ratio under Basel II regulations is 18.58% and comfortably exceeds the minimum 12%
requirement of the Central Bank of Kuwait.
Dividends and Proposed Appropriations
The Net profit for the year attributable to shareholders of the Parent Bank of KD 810,000 will be retained.
1. No dividend is proposed (2010: 15 fils) as recommended by the Board of Directors. This is subject to approval by the
Shareholders at the Annual General Meeting.
Annual Report 2011
2. Nil to the Statutory Reserve, which now equals 50% of share capital and in accordance with the Law of Commercial
Companies any future transfers are on a voluntary basis.