09 February 2004 - UGB Posts Record Earnings

United Gulf Bank (UGB), the investment banking subsidiary of the KIPCO (Kuwait Projects Company) Group, has announced its best results in 24 years. For the year ended December 31, 2003, UGB recorded a net profit of US$ 36.2 million (KD 10.7 million) or 4.7 cents (1.38 fils) per share. The Board of Directors has recommended to its Annual General Meeting of shareholders a record cash dividend of 14 per cent of the share value, or 3.5 cents (10 fils) per share.

UGB Chairman Faisal Al-Ayyar commented: "As it enters its Silver Jubilee year, United Gulf Bank is in a very healthy financial position, having distinguished itself in difficult and uncertain operating environments. UGB's core business lines in wealth management, commercial banking, real estate, portfolio investments and corporate finance continue to produce excellent results. Key subsidiaries and associates including Kipco Asset Management Company (KAMCO), United Real Estate Company, Jordan Kuwait Bank and Tunis International Bank are in a strong growth trend, as performance in 2003 exceeded our expectations."

"Consequently, the share price of these investments now substantially exceeds our carrying values. In 2003, we also benefited from a number of investment realisations including the sale of Baltic Transit Bank and, as predicted last year, from a recovery in regional and global capital markets. Our expectations for 2004 and beyond are most encouraging," he said.

UGB's total revenue in 2003 of US$ 113.6 million (KD 33.5 million) almost doubled over the US$58.1 (KD 17.1) recorded in 2002. Total Assets were US$1,187 million (KD 349.8 million) compared to US$ 939.4 million (KD 276.8 million), a rise of 26 per cent. Equity grew by 23 per cent to US$ 260.3 million (KD 76.7 million) from US$ 210.8 million (KD 62.1 million) in 2002.

Masaud Hayat, UGB Managing Director, commented: "Our asset allocation strategy has clearly paid off. Our diversification has shielded us from difficult markets, and going forward ensures that we continue to benefit from the positive performance in our varied businesses. In 2003, we further reinforced the asset quality of our portfolios by taking US$ 23.4 million (KD 6.9 million) of provisions."

He said business activity highlights of the year included the raising of a $60 million 3/5-year bond (BBB rated) from the Kuwaiti markets; the successful listing of KAMCO on the Kuwait Stock Exchange; the signing of a strategic alliance with Doha Bank-Qatar; advising on and participation in the mobile telecommunication license in northern Iraq; and the launching of a new unified logo for UGB and its banking subsidiaries.

UGB's main subsidiaries are Tunis International Bank, Tunisia; KAMCO Kuwait; UGB Securities Co., Bahrain; and Algeria Gulf Bank (under formation) Algeria. UGB also has equity interests of 44% in Jordan Kuwait Bank, Jordan; 34% in United Real Estate Company, Kuwait; and 49% in United Industries Company, Kuwait.

UGB's activities consist of private equity and fund investments, quoted equities, asset management, corporate finance, real estate, treasury and selective commercial banking services.

For further information please contact United Gulf Bank on telephone +973 17533233 or email info@ugbbah.com.