KUWAIT CITY (AFP) – Kuwait’s Gulf Bank on Saturday posted a net loss of 359.5 million dinars (1.24 billion dollars) for last year, mostly due to heavy losses from derivatives deals.
In 2007, Gulf Bank, the second biggest lender in Kuwait, posted a net profit of 130.4 million dinars (450 million dollars).
But in October, the bank announced losses of 375 million dinars (1.3 billion dollars) when a number of its clients defaulted on derivatives deals mostly in currencies.
The bank doubled its capital in January, raising an equal amount in a special rights issue. The state-run Kuwait Investment Authority (KIA) bought 16 percent of the bank’s capital as part of the capital increase.
Trading in Gulf Bank shares has been suspended on the Kuwait Stock Exchange since the losses were announced in October.
Following the losses, the government of the oil-rich emirate guaranteed deposits at all banks operating in Kuwait and the central bank has pumped hundreds of millions of dinars into the banking system.