Bahrain, July 29th , 2008 - United Gulf Bank announces a 10.3% increase in normalized net income: a net profit of US$ 71.5 million for first half of 2008
 

Bahrain, July 29th , 2008: United Gulf Bank B.S.C. – Bahrain (UGB), has announced a net profit of US$ 71.5 million for the first half of 2008, or 8.57 US cents per share, an increase of 10.3 percent over the normalized net income of US$ 64.8 million for the same period in 2007. Total net income of US$ 168.3 million posted during the first half of 2007 included a one-off gain of US$ 103.4 million from the sale of UGB’s stake in Wataniya and United Fisheries of Kuwait.

Net income for the first half of 2008 of US$ 71.5 million does not include the exceptional gains of US$ 23.5 million realized in July 2008 from sale of United Medical Services Company and approximately US$ 280 million (before expenses) from the transfer of 43.86 percent equity stake of Jordan Kuwait Bank to Burgan Bank. As already announced, these gains of over US$ 303 million will be recorded in the second half of 2008.

As part of the KIPCO Group Financial Services restructuring, UGB has already announced transfer of ownership of Jordan Kuwait Bank to Burgan Bank. The transfer of three other commercial banks (Algeria Gulf Bank, Bank of Baghdad and Tunis International Bank) is expected to be completed by year end subject to regulatory approvals from relevant jurisdictions. UGB will reinvest the transfer proceeds by acquiring up to a 20% equity stake in Burgan Bank.

Net income of US$ 71.5 million for the first half of 2008 includes continued healthy gains from organic growth in the wealth management business as assets under management saw a phenomenal growth of 98.6 percent to US$ 14.5 billion from US$ 7.3 billion at 30 June 2007.

Total consolidated assets at 30 June 2008 were US$ 3.14 billion, 17.6 percent more than US$ 2.67 billion as at 31 December 2007. Total consolidated assets are supported by equity of US$ 656 million which, after the transfer of Jordan Kuwait Bank to Burgan Bank in July 2008, has increased to in excess of US$ 900 million. UGB's balance sheet is conservatively constructed with high levels of liquidity and low leverage. UGB also bolstered its long term funding resources during the period with a US$ 115 million three year club loan raised in June 2008.

UGB shares are listed both on the Bahrain and Kuwait Stock Exchanges with market capitalization now in excess of US$ 1.6 billion as of 30 June 2008.

UGB Managing Director and KAMCO Chairman, Masaud Hayat, commented:

“UGB has posted a sizeable growth in net income in difficult times faced by the financial services industry. The UGB business model and diversified assets have reaffirmed their profit generation capacity.”

“The near 100 percent growth in assets under management to US$ 14.5 billion augurs well for UGB consolidating itself in the asset management and investment banking business post KIPCO Group Financial Services restructuring,” he added.

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Note to editors:

About UGB: UGB, the investment banking subsidiary of Kuwait Projects Company (Holding) (KIPCO), manages a regional network of investment/asset management companies and commercial banks. Its proprietary investments include assets in real estate, private equity, structured products and quoted securities. As of June 2008 assets under management exceed US$ 14.5 billion (2007: US$ 8.5 billion). UGB’s core subsidiaries and associates include: Algeria Gulf Bank, Al Dhiyafa Investment Company, Bank of Baghdad, KIPCO Asset Management Company (KAMCO), Manafae Investment Company, Millennium Finance Corporation, Royal Capital Company, Syria Gulf Bank, Tunis International Bank, United Cable Company, United Gulf Bank Securities Company, United Gulf Financial Services Company, United Industries Company, United Medical Services Company and United Real Estate Company.

UGB and its subsidiary KAMCO have a proven track record of successfully completing around 60 investment banking transactions for its clients since 2001 with an aggregate value of over US$ 8 billion including corporate finance, advisory, new issue placement and underwriting, corporate restructuring, bond issuance and merger and acquisition.

The KIPCO Group is one of the biggest diversified holding companies in the Middle East and North Africa, with assets worth more than US$ 21 billion under management or control. The Group has substantial ownership interests in a portfolio of over 50 companies operating across 21 countries. The company’s main business sectors are financial services and media. Through the subsidiaries and affiliates of its core companies, KIPCO also has interests in real estate, industry, healthcare and the management & advisory sector.

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