27 March 2002 - UGB posts net profit of US$ 4 Million

United Gulf Bank announced net income of US$ 4 million for the year 2001. This result was in line with the Bank's expectations.

Operating income declined 15% to US$ 24.4 million in 2001 due to a contraction of investment income (given the deepened recession in U.S. and fallen equity values both in stock markets and private equity markets) as well as the cost of funding a larger direct equity book. It is significant to note that the Bank's performance was buoyed by a four-fold increase in income from foreign exchange, fees and commissions which jumped to US$ 16.3 million in 2001. Net operating income fell over 50% to US$ 8.4 million in 2001 reflecting lower operating income and a higher level of consolidated operating expense. Consequently, net income of US$ 4 million in the year was lower than the US$ 16.7 million earned in 2000.

During the year, the Bank completed the strategic acquisition of a 96% equity interest in KIPCO Asset Management Company, Kuwait KAMCO to position itself in the growing market of the wealth management in the Area.

In 2001, the consolidated balance sheet grew 30.7% to US$ 931.2 million from US$ 712.3 million as at 31 December, 2000. UGB continues to be very liquid and strongly capitalized. Shareholders' equity stands at US$ 208 million as at 31 December 2001 and the Bank's BIS ratio remains high at 20.9%.

Commenting on the results the Bank's Chairman Mr Faisal Al-Ayyar stated:

"Our focused and diversified asset base has provided the Bank with the resilience to weather the testing investment conditions prevailing in the last two years and will position it to take advantage of the recovery in the financial markets once this occurs positively contributing to our overall sources of income."

UGB is the investment banking arm of the KIPCO Group, Kuwait an investment holding company with diversified business interests in the banking, asset management and advisory services, insurance, media and communications, industrial and real estate sectors.

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