GULF BANK K.S.C.
INTERIM CONDENSED FINANCIAL INFORMATION
(UNAUDITED)
30 September 2012
Note Interest income 42,903 40,418 131,510 125,454 Interest expense 14,961 16,290 45,128 50,548 ________ ________ ________ ________ Net interest income 27,942 24,128 86,382 74,906 Net fees and commissions 7,027 6,500 21,428 22,753 Net gains from dealing in foreign currencies and derivatives 10,658 712 20,094 12,349 Realised gains from disposal of investments available-for-sale 1,721 1,872 4,273 5,703 Dividend income 25 - 246 53 Other income 190 120 767 454 ________ ________ ________ ________ OPERATING INCOME 47,563 33,332 133,190 116,218 ________ ________ ________ ________ Staff expenses 8,190 7,258 25,118 23,117 Occupancy costs 791 781 2,428 2,235 Depreciation 731 700 2,149 2,082 Other expenses 5,371 2,252 12,350 6,509 ________ ________ ________ ________ Operating expenses 15,083 10,991 42,045 33,943 ________ ________ ________ ________ OPERATING PROFIT BEFORE PROVISIONS / IMPAIRMENT LOSSES 32,480 22,341 91,145 82,275 (Release) / Charge of provisions: - specific (1,274) 4,326 8,041 11,587 - general 12,082 9,079 46,648 44,761 Loans written-off / (recoveries) 6,459 (1,400) 1,351 (6,988) Impairment loss on investments available-for-sale 5,141 800 11,637 4,209 ________ ________ ________ ________ OPERATING PROFIT 10,072 9,536 23,468 28,706 Contribution to Kuwait Foundation for the Advancement of Sciences 100 95 235 287 National Labour Support Tax 249 236 581 710 Zakat 100 95 235 287 ________ ________ ________ ________ PROFIT FOR THE PERIOD 9,623 9,110 22,417 27,422 ═══════ ═══════ ═══════ ═══════ BASIC AND DILUTED EARNINGS PER SHARE (Fils) 3 4 4 9 11 ═══════ ═══════ ═══════ ═══════ The attached notes 1 to 10 form part of the interim condensed financial information. 3 months ended 3 months ended 30 September 30 September 2012 2011 KD 000's KD 000's 9 months ended 30 September 2011 KD 000's 30 September 2012 KD 000's GULF BANK K.S.C. Interim Condensed Statement of Income (Unaudited) PERIOD ENDED 9 months ended 2 Profit for the period 9,623 9,110 22,417 27,422 ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Other comprehensive expense Net unrealised losses on investments available-for-sale (4,262) (4,774) (9,754) (4,913) Net impairment losses on/ realised (gains) on disposal of investments available-for-sale recycled 3,495 (1,180) 8,795 (2,611) ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Other comprehensive expense for the period (767) (5,954) (959) (7,524) ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Total comprehensive income for the period 8,856 3,156 21,458 19,898 ═══════ ═══════ ═══════ ═══════ The attached notes 1 to 10 form part of the interim condensed financial information. 30 September 30 September 2012 2011 KD 000's KD 000's 30 September 30 September 2012 2011 KD 000's KD 000's GULF BANK K.S.C. Interim Condensed Statement of Comprehensive Income (Unaudited) PERIOD ENDED 3 months ended 3 months ended 9 months ended 9 months ended 3 Notes ASSETS Cash and short term funds 379,284 370,519 365,371 Treasury bills and bonds 320,801 418,221 459,029 Central Bank of Kuwait bonds 497,145 429,482 381,222 Deposits with banks and other financial institutions 22,600 20,000 88,228 Loans and advances to banks 88,959 34,140 43,878 Loans and advances to customers 3,328,120 3,334,087 3,299,404 Investments available-for-sale 124,533 106,009 109,654 Other assets 41,732 47,513 38,843 Premises and equipment 25,744 25,924 25,665 __________ __________ __________ TOTAL ASSETS 4,828,918 4,785,895 4,811,294 ═══════ ═══════ ═══════ LIABILITIES AND EQUITY LIABILITIES Due to banks 147,364 76,179 122,446 Deposits from financial institutions 872,462 776,819 810,588 Customer deposits 3,186,051 3,330,444 3,283,515 Subordinated loans 84,330 83,565 82,650 Other liabilities 92,711 88,629 81,347 __________ __________ __________ TOTAL LIABILITIES 4,382,918 4,355,636 4,380,546 __________ __________ __________ EQUITY Share capital 4 263,309 250,770 250,770 Proposed bonus shares - 12,539 - Statutory reserve 2,469 2,469 - Share premium 153,024 153,024 153,024 Property revaluation reserve 16,698 16,698 16,243 Treasury share reserve 24,258 24,289 24,289 Fair valuation reserve 6,250 7,209 9,794 Retained earnings 30,643 8,226 20,036 __________ __________ __________ 496,651 475,224 474,156 Treasury shares 5 (50,651) (44,965) (43,408) __________ __________ __________ 446,000 430,259 430,748 __________ __________ __________ TOTAL LIABILITIES AND EQUITY 4,828,918 4,785,895 4,811,294 ═══════ ═══════ ═══════ Mahmoud Abdul Khaleq Al Nouri Michel Accad (Chairman) (Chief General Manager & Chief Executive Officer) GULF BANK K.S.C. Interim Condensed Statement of Financial Position (Unaudited) 30 September (Audited) 31 December (Unaudited) 30 September The attached notes 1 to 10 form part of the interim condensed financial information. 2012 2011 2011 KD 000's KD 000's KD 000's 4 OPERATING ACTIVITIES Profit for the period 22,417 27,422 Adjustments: Realised gains from disposal of investments available-for-sale (4,273) (5,703) Dividend income (246) (53) Depreciation 2,149 2,082 Effective interest rate adjustment - 1,224 Loan loss provisions 54,689 56,348 Loans written-off/ (recoveries) 1,351 (6,988) Impairment loss on investments available-for-sale 11,637 4,209 Foreign exchange movement on subordinated loans 765 (1,530) __________ __________ OPERATING PROFIT BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES 88,489 77,011 (Increase)/decrease in operating assets: Treasury bills and bonds 97,420 62,434 Central Bank of Kuwait bonds (67,663) (71,167) Deposits with banks and other financial institutions (2,600) 22,982 Loans and advances to banks (54,819) (22,098) Loans and advances to customers (50,535) (168,797) Other assets 5,781 16,814 (Decrease)/increase in operating liabilities: Due to banks 71,185 55,125 Deposits from financial institutions 95,643 (75,989) Customer deposits (144,393) 212,649 Other liabilities 4,544 1,415 __________ __________ NET CASH FLOWS FROM OPERATING ACTIVITIES 43,052 110,379 __________ __________ INVESTING ACTIVITIES Purchase of investments available-for-sale (41,751) (44,673) Proceeds from sale of investments available-for-sale 14,904 21,207 Purchase of premises and equipment (1,969) (1,923) Dividends received 246 53 __________ __________ NET CASH FLOWS USED IN INVESTING ACTIVITIES (28,570) (25,336) __________ __________ FINANCING ACTIVITIES Purchase of treasury shares (5,754) (926) Proceeds from sale of treasury shares 37 1,061 __________ __________ NET CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES (5,717) 135 __________ __________ NET INCREASE IN CASH AND SHORT TERM FUNDS 8,765 85,178 CASH AND SHORT TERM FUNDS AT 1 JANUARY 370,519 280,193 __________ __________ CASH AND SHORT TERM FUNDS AT 30 SEPTEMBER 379,284 365,371 ═══════ ═══════ Additional cash flow information Interest received 143,073 145,433 Interest paid 45,158 51,721 The attached notes 1 to 10 form part of the interim condensed financial information. 30 September 30 September 2012 2011 KD 000's KD 000's GULF BANK K.S.C. Interim Condensed Statement of Cash Flows (Unaudited) PERIOD ENDED 9 months ended 9 months ended 5 At 1 January 2011 Profit for the period Other comprehensive expense for the period Total comprehensive (expense)/income for the period Purchase of treasury shares Sale of treasury shares Loss on sale of treasury shares At 30 September 2011 At 1 January 2012 Profit for the period Other comprehensive expense for the period Total comprehensive (expense)/income for the period Issue of bonus shares (Note 6) Purchase of treasury shares Sale of treasury shares Loss on sale of treasury shares At 30 September 2012 The attached notes 1 to 10 form part of the interim condensed financial information. - - - - 68 68 - (31) - - (31) 263,309 - 2,469 153,024 16,698 24,258 6,250 30,643 233,342 (50,651) 446,000 - 22,417 21,458 - 21,458 - - - - (5,754) (5,754) - - - - - - - - - - - - - - - - - - - - - 12,539 (12,539) - - - - - - - 24,993 (44,247) 410,715 - - - - - - - - - - (704) - - (704) - (704) - - - 1,765 1,765 KD 000's KD 000's Fair valuation reserve (Accumulated deficit) retained earnings Sub-total reserves Treasury shares Total - - - - - 250,770 - - 153,024 16,243 - - - - (926) (926) 17,318 GULF BANK K.S.C. Interim Condensed Statement of Changes in Equity (Unaudited) NINE MONTHS PERIOD ENDED Share capital Proposed bonus shares Statutory reserve Share premium Property revaluation reserve Treasury share reserve R E S E R V E S (7,386) 204,192 - - - - - - (959) - (959) - 250,770 - - 153,024 16,243 24,289 9,794 20,036 223,386 250,770 12,539 2,469 KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's - - - - (959) - - - - - - - 22,417 22,417 - 22,417 (43,408) 430,748 153,024 16,698 - 27,422 - - - - - - (7,524) - (7,524) - (7,524) - - - - - - - 27,422 27,422 - - - (7,524) 27,422 19,898 - 19,898 - (31) 24,289 7,209 8,226 211,915 (44,965) 430,259 (959) 6 INCORPORATION AND REGISTRATION 2. BASIS OF PRESENTATION This interim condensed financial information of the Bank has been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting" except as noted below: The annual financial statements for the year ended 31 December 2011 were prepared in accordance with the regulations of the State of Kuwait for financial services institutions regulated by the Central Bank of Kuwait. These regulations require adoption of all International Financial Reporting Standards (IFRS) except for the IAS 39 requirement for collective impairment provision, which has been replaced by the Central Bank of Kuwait’s requirement for a minimum general provision made on all applicable credit facilities (net of certain categories of collateral) that are not provided specifically. The accounting policies used in the preparation of the interim condensed financial information are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2011. The interim condensed financial information does not contain all information and disclosures required for full financial statements prepared in accordance with International Financial Reporting Standards, and should be read in conjunction with the Bank's annual financial statements for the year ended 31 December 2011. Futher, operating results for the nine months period ended 30 September 2012 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2012. This interim condensed financial information has been presented in Kuwaiti Dinars rounded off to the nearest thousand. GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 1. Gulf Bank K.S.C. (the Bank) is a public shareholding company incorporated in Kuwait on 29 October 1960 and is registered as a Bank with the Central Bank of Kuwait. Its registered office is at Mubarak Al Kabir Street, P.O. Box 3200, 13032 Safat, Kuwait. The interim condensed financial information of the Bank for the nine months period ended 30 September 2012 was authorised by the Board of Directors for issue on 8 October 2012. Amendments to IFRS, which are effective for the annual accounting period starting from 1 January 2012 did not have any material impact on the accounting policies, financial position or performance of the Bank. The Bank has not early adopted any other standards, interpretations or amendments that have been issued but not effective. ─────────────────────────────────────────────────────────────── 7 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 BASIC AND DILUTED EARNINGS PER SHARE Profit for the period SHARE CAPITAL Authorised, issued and fully paid up TREASURY SHARES Number of treasury shares Percentage of treasury shares Cost of treasury shares (KD 000’s) Market value of treasury shares (KD 000’s) BONUS SHARES 2,633,087,484 Shares Shares 9,110 ──────── 4 Less: Weighted average number of treasury shares 9,623 ──────── (62,480,761) ───────── 2,570,606,723 ═════════ 4 (48,202,499) ───────── ═════════ Weighted average number of issued shares 2,633,087,484 2,584,884,985 Basic and diluted earnings per share (Fils) 29,140 25,479 24,369 ─────── ─────── ─────── 6. The shareholders at the Annual General Meeting held on 17 March 2012 approved the distribution of bonus shares of 5% on the outstanding issued share capital as at 31 December 2011 amounting to KD 12,539 thousand (31 December 2011: Nil and 30 September 2011: Nil) representing 125,385,118 shares of 100 fils each. 50,651 44,965 43,408 ─────── ─────── ─────── 2.52% 1.99% 1.87% ─────── ─────── ─────── 66,227,202 49,958,737 46,863,737 30 September 31 December 30 September 2012 2011 2011 ═══════ ═══════ ═══════ 5. (Unaudited) (Audited) (Unaudited) KD 000's KD 000's KD 000's 2,633,087,484 (2011: 2,507,702,366) shares of 100 fils each 263,309 250,770 250,770 30 September 31 December 30 September 2012 2011 2011 ═════════ ═════════ 4. (Unaudited) (Audited) (Unaudited) ═════════ ═════════ Earnings per share calculations for the three and nine months period ended 30 September 2011 have been adjusted to take account of the bonus shares issued in 2012. 2,575,857,400 2,584,394,167 ═════════ ═════════ 9 11 2,633,087,484 2,633,087,484 (57,230,084) (48,693,317) ───────── ───────── ──────── ──────── Shares Shares 30 September 30 September 2012 2011 KD 000's KD 000's ended ended 22,417 27,422 3 months ended 30 September 2011 KD 000's 3 months ended 30 September 2012 KD 000's 3. Basic and diluted earnings per share are based on the weighted average number of shares outstanding during the period, which is as follows: 9 months 9 months ─────────────────────────────────────────────────────────────── 8 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 SEGMENTAL ANALYSIS By Business Unit Commercial Banking Treasury & Investments Segmental information for the nine months period ended 30 September is as follows: Segment result Unallocated income Unallocated expense Profit for the period Segment assets Unallocated assets Total Assets Segment liabilities 4,811,294 ═════ ═════ Total Liabilities and Equity 4,828,918 557,126 ────── ────── Unallocated liabilities and equity 590,599 2,921,969 2,919,299 1,316,350 1,334,869 4,238,319 4,254,168 ═════ ═════ 4,828,918 4,811,294 ────── ────── 67,476 64,508 3,463,739 3,368,211 1,297,703 1,378,575 4,761,442 4,746,786 ═════ ═════ 22,417 27,422 ────── ────── (53,248) (46,270) 18,255 9,207 47,704 56,328 9,706 8,157 57,410 64,485 107,011 ══════ ══════ ══════ ══════ ══════ ══════ Operating income (Excluding unallocated income provided below) 100,433 92,626 14,502 14,385 114,935 KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's Commercial Banking Investments Total 2012 2011 2012 2011 2012 2011 7. Acceptance of deposits from individuals, corporates’ and institutional customers and providing consumer loans, overdrafts, credit card facilities and funds transfer facilities to individuals; and other credit facilities of corporate and institutional customers. Providing money market, trading and treasury services, as well as management of the Bank’s funding operations by use of treasury bills, government securities, placements and acceptances with other banks. The proprietary investments of the Bank are managed by the investments unit. Treasury & ─────────────────────────────────────────────────────────────── 9 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 RELATED PARTY TRANSACTIONS The balances included in the financial position are as follows: Board members: Executive management: Board members, directors and key management personnel: Interest income earned Interest expense on deposits Key management compensation: Salaries and other short-term benefits End of service/termination benefits 2,224 2,087 71 77 1,589 1,624 2,346 2,162 30 September 30 September KD 000's KD 000's 2012 2011 Guarantees issued 1 1 1 The loans granted to directors and key management personnel are repayable within three years and have interest rates of 3% to 6.5% (2011: 3% to 7%) per annum. Some of the loans advanced above are collateralised. The fair value of these collaterals as of 30 September 2012 was KD 53,775 thousand (31 December 2011: KD 92,598 thousand and 30 September 2011: KD 95,056 thousand). The transactions included in the interim condensed financial information are as follows: Loans, receivables and advances 52,749 110,674 101,449 Investments available-for-sale 762 780 819 2012 2011 2011 KD 000's KD 000's KD 000's (Unaudited) (Audited) (Unaudited) 30 September 31 December 30 September 8. Certain related parties (directors and officers of the Bank, their families and companies of which they are principal owners) were customers of the Bank in the ordinary course of business. The terms of these transactions are approved as per the Bank's policy. Directors and Key Management Personnel - 2,162 - Provision for losses on receivable from related parties Loans 546 561 1,030 Deposits 1,213 1,382 1,438 Deposits 224,484 321,622 348,597 Guarantees issued 6,493 35,917 9,900 9 months ended 9 months ended ─────────────────────────────────────────────────────────────── 10 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 CONTINGENT LIABILITIES AND COMMITMENTS Guarantees Letters of credit Irrevocable commitment to extend credit: Original term to maturity of more than one year DERIVATIVES Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured product Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured product Derivatives instruments held as: ══════ ══════ ══════ ══════ ══════ ══════ total 3 months months 1 year 567 (749) ────── ────── ────── ────── ────── ────── 3,653 (5,602) 330,177 130,376 68,111 131,690 37 (4,886) 222,409 68,869 21,850 131,690 2,980 - 11,244 11,244 - - KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's 636 (716) 96,524 50,263 46,261 - At 31 December 2011: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over fair value fair value total 3 months months 1 year ══════ ══════ ══════ As at 30 September 2012 the Bank had undrawn commitments to extend overdraft facilities to customers amounting to KD 91,128 thousand (31 December 2011: KD 115,499 thousand and 30 September 2011: KD 111,402 thousand). The contractual terms entitle the Bank to withdraw these facilities at any time. The table below shows notional amounts of derivative financial instruments analysed by the term to maturity. The notional amount is the amount of a derivative’s underlying asset, reference rate or index and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of transactions outstanding at the period end and are not indicative of either market or credit risk. At 30 September 2012: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over 10. In the ordinary course of business the Bank enters into various types of transactions that involve derivative financial instruments. A derivative financial instrument is a financial contract between two parties where payments are dependent upon movements in price of one or more underlying financial instruments, reference rate or index. 1,160,264 1,240,181 1,194,481 ────── ────── ────── - - 2,755 197,010 266,590 277,643 KD 000's KD 000's KD 000's 963,254 973,591 914,083 30 September 31 December 30 September 2012 2011 2011 9. (Unaudited) (Audited) (Unaudited) fair value fair value ══════ ══════ ══════ ══════ ══════ ══════ ────── ────── ────── ────── ────── ────── 9,483 (11,593) 382,305 83,530 146,627 152,148 Derivatives instruments held as: KD 000's KD 000's 8,916 - 11,142 - 11,142 - 76,457 70,995 5,462 - - (10,844) 294,706 12,535 130,023 152,148 KD 000's KD 000's KD 000's KD 000's ─────────────────────────────────────────────────────────────── 11 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 DERIVATIVES (continued) Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured products ══════ ══════ 10,428 - 11,020 - - 11,020 ────── ────── ────── ────── ────── ────── 179 (167) 80,476 19,945 60,531 - - (11,885) 330,048 38,570 73,499 217,979 fair value fair value total 3 months months 1 year 10,607 (12,052) 421,544 58,515 134,030 228,999 ══════ ══════ ══════ ══════ Derivatives instruments held as: 10. At 30 September 2011: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's ─────────────────────────────────────────────────────────────── 12
GULF BANK K.S.C. INTERIM CONDENSED FINANCIAL INFORMATION (UNAUDITED)
30 June 2012
Note Interest income 44,576 43,149 88,607 85,036 Interest expense 14,863 16,788 30,167 34,258 ________ ________ ________ ________ Net interest income 29,713 26,361 58,440 50,778 Net fees and commissions 6,445 8,587 14,401 16,253 Net gains from dealing in foreign currencies and derivatives 2,263 6,569 9,436 11,637 Realised gains from disposal of investments available-for-sale 2,389 3,026 2,552 3,831 Dividend income 221 50 221 53 Other income 257 179 577 334 ________ ________ ________ ________ OPERATING INCOME 41,288 44,772 85,627 82,886 ________ ________ ________ ________ Staff expenses 7,978 8,059 16,928 15,859 Occupancy costs 857 774 1,637 1,454 Depreciation 718 699 1,418 1,382 Other expenses 2,894 1,448 6,979 4,257 ________ ________ ________ ________ Operating expenses 12,447 10,980 26,962 22,952 ________ ________ ________ ________ OPERATING PROFIT BEFORE PROVISIONS / IMPAIRMENT LOSSES 28,841 33,792 58,665 59,934 Charge of provisions: - specific 1,396 3,349 9,315 7,261 - general 20,742 14,698 34,566 35,682 Loans (recoveries)/ written-off (1,674) 6,139 (5,108) (5,588) Impairment loss on investments available-for-sale 2,697 672 6,496 3,409 ________ ________ ________ ________ OPERATING PROFIT 5,680 8,934 13,396 19,170 Contribution to Kuwait Foundation for the Advancement of Sciences 58 90 135 192 National Labour Support Tax 140 220 332 474 Zakat 58 90 135 192 ________ ________ ________ ________ PROFIT FOR THE PERIOD 5,424 8,534 12,794 18,312 ═══════ ═══════ ═══════ ═══════ BASIC AND DILUTED EARNINGS PER SHARE (Fils) 3 2 3 5 7 ═══════ ═══════ ═══════ ═══════ GULF BANK K.S.C. Interim Condensed Statement of Income (Unaudited) PERIOD ENDED 6 months ended The attached notes 1 to 10 form part of the interim condensed financial information. 3 months ended 3 months ended 30 June 30 June 2012 2011 KD 000's KD 000's 6 months ended 30 June 2011 KD 000's 30 June 2012 KD 000's 2 Profit for the period 5,424 8,534 12,794 18,312 ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Other comprehensive expense Net unrealised losses on investments available-for-sale (2,646) (742) (5,492) (139) Net realised gains on disposal of/ impairment losses on investments available-for-sale recycled 1,629 (2,131) 5,300 (1,431) ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Other comprehensive expense for the period (1,017) (2,873) (192) (1,570) ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Total comprehensive income for the period 4,407 5,661 12,602 16,742 ═══════ ═══════ ═══════ ═══════ The attached notes 1 to 10 form part of the interim condensed financial information. GULF BANK K.S.C. Interim Condensed Statement of Comprehensive Income (Unaudited) PERIOD ENDED 3 months ended 3 months ended 6 months ended 6 months ended 30 June 30 June 2012 2011 KD 000's KD 000's 30 June 30 June 2012 2011 KD 000's KD 000's 3 Notes ASSETS Cash and short term funds 343,986 370,519 281,977 Treasury bills and bonds 456,102 418,221 537,992 Central Bank of Kuwait bonds 413,546 429,482 342,479 Deposits with banks and other financial institutions 32,057 20,000 76,256 Loans and advances to banks 61,259 34,140 45,413 Loans and advances to customers 3,366,968 3,334,087 3,242,667 Investments available-for-sale 132,013 106,009 102,153 Other assets 44,012 47,513 47,561 Premises and equipment 25,896 25,924 25,859 __________ __________ __________ TOTAL ASSETS 4,875,839 4,785,895 4,702,357 ═══════ ═══════ ═══════ LIABILITIES AND EQUITY LIABILITIES Due to banks 190,789 76,179 71,181 Deposits from financial institutions 811,300 776,819 819,548 Customer deposits 3,251,676 3,330,444 3,222,816 Subordinated loans 84,045 83,565 82,335 Other liabilities 97,798 88,629 77,972 __________ __________ __________ TOTAL LIABILITIES 4,435,608 4,355,636 4,273,852 __________ __________ __________ EQUITY Share capital 4 263,309 250,770 250,770 Proposed bonus shares - 12,539 - Statutory reserve 2,469 2,469 - Share premium 153,024 153,024 153,024 Property revaluation reserve 16,698 16,698 16,243 Treasury share reserve 24,258 24,289 24,289 Fair valuation reserve 7,017 7,209 15,748 Retained earnings 21,020 8,226 10,926 __________ __________ __________ 487,795 475,224 471,000 Treasury shares 5 (47,564) (44,965) (42,495) __________ __________ __________ 440,231 430,259 428,505 __________ __________ __________ TOTAL LIABILITIES AND EQUITY 4,875,839 4,785,895 4,702,357 ═══════ ═══════ ═══════ Mahmoud Abdul Khaleq Al Nouri Michel Accad (Chairman) (Chief General Manager & Chief Executive Officer) The attached notes 1 to 10 form part of the interim condensed financial information. 2012 2011 2011 KD 000's KD 000's KD 000's 30 June (Audited) 31 December (Unaudited) 30 June GULF BANK K.S.C. Interim Condensed Statement of Financial Position (Unaudited) 4 OPERATING ACTIVITIES Profit for the period 12,794 18,312 Adjustments: Realised gains from disposal of investments available-for-sale (2,552) (3,831) Dividend income (221) (53) Depreciation 1,418 1,382 Effective interest rate adjustment - 1,563 Loan loss provisions 43,881 42,943 Loans (recoveries)/written-off (5,108) (5,588) Impairment loss on investments available-for-sale 6,496 3,409 Foreign exchange movement on subordinated loans 480 (1,845) __________ __________ OPERATING PROFIT BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES 57,188 56,292 (Increase)/decrease in operating assets: Treasury bills and bonds (37,881) (16,529) Central Bank of Kuwait bonds 15,936 (32,424) Deposits with banks and other financial institutions (12,057) 34,954 Loans and advances to banks (27,119) (23,633) Loans and advances to customers (71,705) (100,399) Other assets 3,501 8,096 (Decrease)/increase in operating liabilities: Due to banks 114,610 3,860 Deposits from financial institutions 34,481 (67,029) Customer deposits (78,768) 151,950 Other liabilities 9,220 (1,955) __________ __________ NET CASH FLOWS FROM OPERATING ACTIVITIES 7,406 13,183 __________ __________ INVESTING ACTIVITIES Purchase of investments available-for-sale (37,026) (25,721) Proceeds from sale of investments available-for-sale 6,886 14,638 Purchase of premises and equipment (1,390) (1,417) Dividends received 221 53 __________ __________ NET CASH FLOWS USED IN INVESTING ACTIVITIES (31,309) (12,447) __________ __________ FINANCING ACTIVITIES Purchase of treasury shares (2,667) (13) Proceeds from sale of treasury shares 37 1,061 __________ __________ NET CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES (2,630) 1,048 __________ __________ NET (DECREASE)/INCREASE IN CASH AND SHORT TERM FUNDS (26,533) 1,784 CASH AND SHORT TERM FUNDS AT 1 JANUARY 370,519 280,193 __________ __________ CASH AND SHORT TERM FUNDS AT 30 JUNE 343,986 281,977 ═══════ ═══════ Additional cash flow information Interest received 96,968 85,199 Interest paid 29,524 35,370 GULF BANK K.S.C. Interim Condensed Statement of Cash Flows (Unaudited) PERIOD ENDED 6 months ended 6 months ended The attached notes 1 to 10 form part of the interim condensed financial information. 30 June 30 June 2012 2011 KD 000's KD 000's 5 At 1 January 2011 Profit for the period Other comprehensive expense for the period Total comprehensive (expense)/income for the period Purchase of treasury shares Sale of treasury shares Loss on sale of treasury shares At 30 June 2011 At 1 January 2012 Profit for the period Other comprehensive expense for the period Total comprehensive (expense)/income for the period Issue of bonus shares (Note 6) Purchase of treasury shares Sale of treasury shares Loss on sale of treasury shares At 30 June 2012 The attached notes 1 to 10 form part of the interim condensed financial information. - - - (1,570) 18,312 16,742 - 16,742 - (31) 24,289 7,209 8,226 211,915 (44,965) 430,259 (192) - 18,312 - - - - - - (1,570) - (1,570) - (1,570) - - - - - - - 18,312 18,312 - - - - (192) - - - - - - - 12,794 12,794 - 12,794 (42,495) 428,505 153,024 16,698 KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's (7,386) 204,192 - - - - - - (192) - (192) - 250,770 - - 153,024 16,243 24,289 15,748 10,926 220,230 250,770 12,539 2,469 GULF BANK K.S.C. Interim Condensed Statement of Changes in Equity (Unaudited) SIX MONTHS PERIOD ENDED Share capital Proposed bonus shares Statutory reserve Share premium Property revaluation reserve Treasury share reserve R E S E R V E S KD 000's KD 000's Fair valuation reserve (Accumulated deficit) retained earnings Sub-total reserves Treasury shares Total - - - - - 250,770 - - 153,024 16,243 - - - - (13) (13) 24,993 17,318 (44,247) 410,715 - - - - - - - - - - (704) - - (704) - (704) - - - 1,765 1,765 - - - - - - - - - - - - - - - 12,539 (12,539) - - - - - - - - 12,794 12,602 - 12,602 - - - - (2,667) (2,667) - - - - - - 263,309 - 2,469 153,024 16,698 24,258 7,017 21,020 224,486 (47,564) 440,231 - - - - 68 68 - (31) - - (31) 6 INCORPORATION AND REGISTRATION BASIS OF PRESENTATION GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 1. Gulf Bank K.S.C. (the Bank) is a public shareholding company incorporated in Kuwait on 29 October 1960 and is registered as a Bank with the Central Bank of Kuwait. Its registered office is at Mubarak Al Kabir Street, P.O. Box 3200, 13032 Safat, Kuwait. The interim condensed financial information of the Bank for the six months period ended 30 June 2012 was authorised by the Board of Directors for issue on 10 July 2012. Amendments to IFRS, which are effective for the annual accounting period starting from 1 January 2012 did not have any material impact on the accounting policies, financial position or performance of the Bank. The Bank has not early adopted any other standards, interpretations or amendments that have been issued but not effective. 2. This interim condensed financial information of the Bank has been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting" except as noted below: The annual financial statements for the year ended 31 December 2011 were prepared in accordance with the regulations of the State of Kuwait for financial services institutions regulated by the Central Bank of Kuwait. These regulations require adoption of all International Financial Reporting Standards (IFRS) except for the IAS 39 requirement for collective impairment provision, which has been replaced by the Central Bank of Kuwait’s requirement for a minimum general provision made on all applicable credit facilities (net of certain categories of collateral) that are not provided specifically. The accounting policies used in the preparation of the interim condensed financial information are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2011. The interim condensed financial information does not contain all information and disclosures required for full financial statements prepared in accordance with International Financial Reporting Standards, and should be read in conjunction with the Bank's annual financial statements for the year ended 31 December 2011. Futher, operating results for the six months period ended 30 June 2012 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2012. This interim condensed financial information has been presented in Kuwaiti Dinars rounded off to the nearest thousand. ─────────────────────────────────────────────────────────────── 7 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 BASIC AND DILUTED EARNINGS PER SHARE Profit for the period SHARE CAPITAL Authorised, issued and fully paid up TREASURY SHARES Number of treasury shares Percentage of treasury shares Cost of treasury shares (KD 000’s) Market value of treasury shares (KD 000’s) BONUS SHARES 3. Basic and diluted earnings per share are based on the weighted average number of shares outstanding during the period, which is as follows: 6 months 6 months ended ended 12,794 18,312 3 months ended 30 June 2011 KD 000's 3 months ended 30 June 2012 KD 000's ──────── ──────── Shares Shares 30 June 30 June 2012 2011 KD 000's KD 000's 2,578,511,587 2,584,144,607 ═════════ ═════════ 5 7 2,633,087,484 2,633,087,484 (54,575,897) (48,942,877) ───────── ───────── 30 June 31 December 30 June 2012 2011 2011 ═════════ ═════════ 4. (Unaudited) (Audited) (Unaudited) ═════════ ═════════ Earnings per share calculations for the period ended 30 June 2011 have been adjusted to take account of the bonus shares issued in 2012. ═══════ ═══════ ═══════ 5. (Unaudited) (Audited) (Unaudited) KD 000's KD 000's KD 000's 2,633,087,484 (2011: 2,507,702,366) shares of 100 fils each 263,309 250,770 250,770 58,566,138 49,958,737 45,033,737 30 June 31 December 30 June 2012 2011 2011 47,564 44,965 42,495 ─────── ─────── ─────── 2.22% 1.99% 1.80% ─────── ─────── ─────── 25,476 25,479 24,318 ─────── ─────── ─────── 6. The shareholders at the Annual General Meeting held on 17 March 2012 approved the distribution of bonus shares of 5% on the outstanding issued share capital as at 31 December 2011 amounting to KD 12,539 thousand (31 December 2011: Nil and 30 June 2011: Nil) representing 125,385,118 shares of 100 fils each. 2,633,087,484 Shares Shares 8,534 ──────── 3 Less: Weighted average number of treasury shares 5,424 ──────── (56,323,330) ───────── 2,576,764,154 ═════════ 2 (48,461,321) ───────── ═════════ Weighted average number of issued shares 2,633,087,484 2,584,626,163 Basic and diluted earnings per share (Fils) ─────────────────────────────────────────────────────────────── 8 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 SEGMENTAL ANALYSIS By Business Unit Commercial Banking Treasury & Investments Segmental information for the six months period ended 30 June is as follows: Segment result Unallocated income Unallocated expense Profit for the period Segment assets Unallocated assets Total Assets Segment liabilities 7. Acceptance of deposits from individuals, corporates’ and institutional customers and providing consumer loans, overdrafts, credit card facilities and funds transfer facilities to individuals; and other credit facilities of corporate and institutional customers. Providing money market, trading and treasury services, as well as management of the Bank’s funding operations by use of treasury bills, government securities, placements and acceptances with other banks. The proprietary investments of the Bank are managed by the investments unit. Treasury & KD 000's Commercial Banking Investments Total 2012 2011 2012 2011 2012 2011 Operating income (Excluding unallocated income provided below) 66,355 61,700 8,475 12,146 74,830 KD 000's KD 000's KD 000's KD 000's KD 000's 34,044 38,028 5,013 7,385 39,057 45,413 73,846 ══════ ══════ ══════ ══════ ══════ ══════ (37,060) (36,141) 10,797 9,040 12,794 18,312 ────── ────── ═════ ═════ 69,909 79,138 3,466,149 3,301,024 1,339,781 1,322,195 4,805,930 4,623,219 4,875,839 4,702,357 ────── ────── 2,873,834 2,956,435 1,416,479 1,195,433 4,290,313 4,151,868 ═════ ═════ 550,489 ────── ────── Unallocated liabilities and equity 585,526 4,702,357 ═════ ═════ Total Liabilities and Equity 4,875,839 ─────────────────────────────────────────────────────────────── 9 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 RELATED PARTY TRANSACTIONS The balances included in the financial position are as follows: Board members: Executive management: Board members, directors and key management personnel: Interest income earned Interest expense on deposits Key management compensation: Salaries and other short-term benefits End of service/termination benefits - 2,162 - Provision for losses on receivable from related parties Loans 551 561 1,037 Deposits 1,699 1,382 1,374 Deposits 226,548 321,622 353,776 Guarantees issued 5,851 35,917 12,508 6 months ended 6 months ended 8. Certain related parties (directors and officers of the Bank, their families and companies of which they are principal owners) were customers of the Bank in the ordinary course of business. Such transactions were made on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable transactions with unrelated parties, and did not involve more than a normal amount of risk. Directors and Key Management Personnel 2012 2011 2011 KD 000's KD 000's KD 000's (Unaudited) (Audited) (Unaudited) 30 June 31 December 30 June Guarantees issued 1 1 1 The loans granted to directors and key management personnel are repayable within three years and have interest rates of 3% to 7% (2011: 3% to 7%) per annum. Some of the loans advanced above are collateralised. The fair value of these collaterals as of 30 June 2012 was KD 54,082 thousand (31 December 2011: KD 92,598 thousand and 30 June 2011: KD 98,634 thousand). The transactions included in the interim condensed financial information are as follows: Loans, receivables and advances 54,059 110,674 101,093 Investments available-for-sale 762 780 853 1,070 573 1,712 1,183 30 June 2012 30 June 2011 KD 000's KD 000's 1,469 1,399 47 56 ─────────────────────────────────────────────────────────────── 10 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 CONTINGENT LIABILITIES AND COMMITMENTS Guarantees Letters of credit Irrevocable commitment to extend credit: Original term to maturity of more than one year DERIVATIVES Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured products Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured products Derivatives instruments held as: KD 000's KD 000's 8,916 - 11,142 - 11,142 - 76,457 70,995 5,462 - - (10,844) 294,706 12,535 130,023 152,148 KD 000's KD 000's KD 000's KD 000's ══════ ══════ ══════ ══════ ══════ ══════ ────── ────── ────── ────── ────── ────── 9,483 (11,593) 382,305 83,530 146,627 152,148 fair value fair value 9. (Unaudited) (Audited) (Unaudited) 30 June 31 December 30 June 2012 2011 2011 257,240 266,590 252,244 KD 000's KD 000's KD 000's 968,004 973,591 880,400 10. In the ordinary course of business the Bank enters into various types of transactions that involve derivative financial instruments. A derivative financial instrument is a financial contract between two parties where payments are dependent upon movements in price of one or more underlying financial instruments, reference rate or index. 1,225,244 1,240,181 1,166,950 ────── ────── ────── - - 34,306 fair value fair value total 3 months months 1 year ══════ ══════ ══════ As at the reporting date the Bank had undrawn commitments to extend overdraft facilities to customers amounting to KD 93,304 thousand (31 December 2011: KD 115,499 thousand and 30 June 2011: KD 103,144 thousand). The contractual terms entitle the Bank to withdraw these facilities at any time. The table below shows notional amounts of derivative financial instruments analysed by the term to maturity. The notional amount is the amount of a derivative’s underlying asset, reference rate or index and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of transactions outstanding at the period end and are not indicative of either market or credit risk. At 30 June 2012: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over At 31 December 2011: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's 648 (710) 106,112 61,301 44,811 - - (7,881) 241,268 19,611 68,637 153,020 5,121 - 11,206 - 11,206 - ────── ────── ────── ────── ────── ────── 5,769 (8,591) 358,586 80,912 124,654 153,020 ══════ ══════ ══════ ══════ ══════ ══════ total 3 months months 1 year 567 (749) Derivatives instruments held as: ─────────────────────────────────────────────────────────────── 11 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 DERIVATIVES (continued) Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured products Derivatives instruments held as: 10. At 30 June 2011: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's 5,519 (10,554) 380,530 36,295 83,174 261,061 ══════ ══════ ══════ ══════ fair value fair value total 3 months months 1 year 90 (61) 22,922 18,456 4,466 - - (10,493) 346,630 17,839 78,708 250,083 5,429 - 10,978 - - 10,978 ────── ────── ────── ────── ────── ────── ══════ ══════ ─────────────────────────────────────────────────────────────── 12
30 September 2012
Note Interest income 42,903 40,418 131,510 125,454 Interest expense 14,961 16,290 45,128 50,548 ________ ________ ________ ________ Net interest income 27,942 24,128 86,382 74,906 Net fees and commissions 7,027 6,500 21,428 22,753 Net gains from dealing in foreign currencies and derivatives 10,658 712 20,094 12,349 Realised gains from disposal of investments available-for-sale 1,721 1,872 4,273 5,703 Dividend income 25 - 246 53 Other income 190 120 767 454 ________ ________ ________ ________ OPERATING INCOME 47,563 33,332 133,190 116,218 ________ ________ ________ ________ Staff expenses 8,190 7,258 25,118 23,117 Occupancy costs 791 781 2,428 2,235 Depreciation 731 700 2,149 2,082 Other expenses 5,371 2,252 12,350 6,509 ________ ________ ________ ________ Operating expenses 15,083 10,991 42,045 33,943 ________ ________ ________ ________ OPERATING PROFIT BEFORE PROVISIONS / IMPAIRMENT LOSSES 32,480 22,341 91,145 82,275 (Release) / Charge of provisions: - specific (1,274) 4,326 8,041 11,587 - general 12,082 9,079 46,648 44,761 Loans written-off / (recoveries) 6,459 (1,400) 1,351 (6,988) Impairment loss on investments available-for-sale 5,141 800 11,637 4,209 ________ ________ ________ ________ OPERATING PROFIT 10,072 9,536 23,468 28,706 Contribution to Kuwait Foundation for the Advancement of Sciences 100 95 235 287 National Labour Support Tax 249 236 581 710 Zakat 100 95 235 287 ________ ________ ________ ________ PROFIT FOR THE PERIOD 9,623 9,110 22,417 27,422 ═══════ ═══════ ═══════ ═══════ BASIC AND DILUTED EARNINGS PER SHARE (Fils) 3 4 4 9 11 ═══════ ═══════ ═══════ ═══════ The attached notes 1 to 10 form part of the interim condensed financial information. 3 months ended 3 months ended 30 September 30 September 2012 2011 KD 000's KD 000's 9 months ended 30 September 2011 KD 000's 30 September 2012 KD 000's GULF BANK K.S.C. Interim Condensed Statement of Income (Unaudited) PERIOD ENDED 9 months ended 2 Profit for the period 9,623 9,110 22,417 27,422 ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Other comprehensive expense Net unrealised losses on investments available-for-sale (4,262) (4,774) (9,754) (4,913) Net impairment losses on/ realised (gains) on disposal of investments available-for-sale recycled 3,495 (1,180) 8,795 (2,611) ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Other comprehensive expense for the period (767) (5,954) (959) (7,524) ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Total comprehensive income for the period 8,856 3,156 21,458 19,898 ═══════ ═══════ ═══════ ═══════ The attached notes 1 to 10 form part of the interim condensed financial information. 30 September 30 September 2012 2011 KD 000's KD 000's 30 September 30 September 2012 2011 KD 000's KD 000's GULF BANK K.S.C. Interim Condensed Statement of Comprehensive Income (Unaudited) PERIOD ENDED 3 months ended 3 months ended 9 months ended 9 months ended 3 Notes ASSETS Cash and short term funds 379,284 370,519 365,371 Treasury bills and bonds 320,801 418,221 459,029 Central Bank of Kuwait bonds 497,145 429,482 381,222 Deposits with banks and other financial institutions 22,600 20,000 88,228 Loans and advances to banks 88,959 34,140 43,878 Loans and advances to customers 3,328,120 3,334,087 3,299,404 Investments available-for-sale 124,533 106,009 109,654 Other assets 41,732 47,513 38,843 Premises and equipment 25,744 25,924 25,665 __________ __________ __________ TOTAL ASSETS 4,828,918 4,785,895 4,811,294 ═══════ ═══════ ═══════ LIABILITIES AND EQUITY LIABILITIES Due to banks 147,364 76,179 122,446 Deposits from financial institutions 872,462 776,819 810,588 Customer deposits 3,186,051 3,330,444 3,283,515 Subordinated loans 84,330 83,565 82,650 Other liabilities 92,711 88,629 81,347 __________ __________ __________ TOTAL LIABILITIES 4,382,918 4,355,636 4,380,546 __________ __________ __________ EQUITY Share capital 4 263,309 250,770 250,770 Proposed bonus shares - 12,539 - Statutory reserve 2,469 2,469 - Share premium 153,024 153,024 153,024 Property revaluation reserve 16,698 16,698 16,243 Treasury share reserve 24,258 24,289 24,289 Fair valuation reserve 6,250 7,209 9,794 Retained earnings 30,643 8,226 20,036 __________ __________ __________ 496,651 475,224 474,156 Treasury shares 5 (50,651) (44,965) (43,408) __________ __________ __________ 446,000 430,259 430,748 __________ __________ __________ TOTAL LIABILITIES AND EQUITY 4,828,918 4,785,895 4,811,294 ═══════ ═══════ ═══════ Mahmoud Abdul Khaleq Al Nouri Michel Accad (Chairman) (Chief General Manager & Chief Executive Officer) GULF BANK K.S.C. Interim Condensed Statement of Financial Position (Unaudited) 30 September (Audited) 31 December (Unaudited) 30 September The attached notes 1 to 10 form part of the interim condensed financial information. 2012 2011 2011 KD 000's KD 000's KD 000's 4 OPERATING ACTIVITIES Profit for the period 22,417 27,422 Adjustments: Realised gains from disposal of investments available-for-sale (4,273) (5,703) Dividend income (246) (53) Depreciation 2,149 2,082 Effective interest rate adjustment - 1,224 Loan loss provisions 54,689 56,348 Loans written-off/ (recoveries) 1,351 (6,988) Impairment loss on investments available-for-sale 11,637 4,209 Foreign exchange movement on subordinated loans 765 (1,530) __________ __________ OPERATING PROFIT BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES 88,489 77,011 (Increase)/decrease in operating assets: Treasury bills and bonds 97,420 62,434 Central Bank of Kuwait bonds (67,663) (71,167) Deposits with banks and other financial institutions (2,600) 22,982 Loans and advances to banks (54,819) (22,098) Loans and advances to customers (50,535) (168,797) Other assets 5,781 16,814 (Decrease)/increase in operating liabilities: Due to banks 71,185 55,125 Deposits from financial institutions 95,643 (75,989) Customer deposits (144,393) 212,649 Other liabilities 4,544 1,415 __________ __________ NET CASH FLOWS FROM OPERATING ACTIVITIES 43,052 110,379 __________ __________ INVESTING ACTIVITIES Purchase of investments available-for-sale (41,751) (44,673) Proceeds from sale of investments available-for-sale 14,904 21,207 Purchase of premises and equipment (1,969) (1,923) Dividends received 246 53 __________ __________ NET CASH FLOWS USED IN INVESTING ACTIVITIES (28,570) (25,336) __________ __________ FINANCING ACTIVITIES Purchase of treasury shares (5,754) (926) Proceeds from sale of treasury shares 37 1,061 __________ __________ NET CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES (5,717) 135 __________ __________ NET INCREASE IN CASH AND SHORT TERM FUNDS 8,765 85,178 CASH AND SHORT TERM FUNDS AT 1 JANUARY 370,519 280,193 __________ __________ CASH AND SHORT TERM FUNDS AT 30 SEPTEMBER 379,284 365,371 ═══════ ═══════ Additional cash flow information Interest received 143,073 145,433 Interest paid 45,158 51,721 The attached notes 1 to 10 form part of the interim condensed financial information. 30 September 30 September 2012 2011 KD 000's KD 000's GULF BANK K.S.C. Interim Condensed Statement of Cash Flows (Unaudited) PERIOD ENDED 9 months ended 9 months ended 5 At 1 January 2011 Profit for the period Other comprehensive expense for the period Total comprehensive (expense)/income for the period Purchase of treasury shares Sale of treasury shares Loss on sale of treasury shares At 30 September 2011 At 1 January 2012 Profit for the period Other comprehensive expense for the period Total comprehensive (expense)/income for the period Issue of bonus shares (Note 6) Purchase of treasury shares Sale of treasury shares Loss on sale of treasury shares At 30 September 2012 The attached notes 1 to 10 form part of the interim condensed financial information. - - - - 68 68 - (31) - - (31) 263,309 - 2,469 153,024 16,698 24,258 6,250 30,643 233,342 (50,651) 446,000 - 22,417 21,458 - 21,458 - - - - (5,754) (5,754) - - - - - - - - - - - - - - - - - - - - - 12,539 (12,539) - - - - - - - 24,993 (44,247) 410,715 - - - - - - - - - - (704) - - (704) - (704) - - - 1,765 1,765 KD 000's KD 000's Fair valuation reserve (Accumulated deficit) retained earnings Sub-total reserves Treasury shares Total - - - - - 250,770 - - 153,024 16,243 - - - - (926) (926) 17,318 GULF BANK K.S.C. Interim Condensed Statement of Changes in Equity (Unaudited) NINE MONTHS PERIOD ENDED Share capital Proposed bonus shares Statutory reserve Share premium Property revaluation reserve Treasury share reserve R E S E R V E S (7,386) 204,192 - - - - - - (959) - (959) - 250,770 - - 153,024 16,243 24,289 9,794 20,036 223,386 250,770 12,539 2,469 KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's - - - - (959) - - - - - - - 22,417 22,417 - 22,417 (43,408) 430,748 153,024 16,698 - 27,422 - - - - - - (7,524) - (7,524) - (7,524) - - - - - - - 27,422 27,422 - - - (7,524) 27,422 19,898 - 19,898 - (31) 24,289 7,209 8,226 211,915 (44,965) 430,259 (959) 6 INCORPORATION AND REGISTRATION 2. BASIS OF PRESENTATION This interim condensed financial information of the Bank has been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting" except as noted below: The annual financial statements for the year ended 31 December 2011 were prepared in accordance with the regulations of the State of Kuwait for financial services institutions regulated by the Central Bank of Kuwait. These regulations require adoption of all International Financial Reporting Standards (IFRS) except for the IAS 39 requirement for collective impairment provision, which has been replaced by the Central Bank of Kuwait’s requirement for a minimum general provision made on all applicable credit facilities (net of certain categories of collateral) that are not provided specifically. The accounting policies used in the preparation of the interim condensed financial information are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2011. The interim condensed financial information does not contain all information and disclosures required for full financial statements prepared in accordance with International Financial Reporting Standards, and should be read in conjunction with the Bank's annual financial statements for the year ended 31 December 2011. Futher, operating results for the nine months period ended 30 September 2012 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2012. This interim condensed financial information has been presented in Kuwaiti Dinars rounded off to the nearest thousand. GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 1. Gulf Bank K.S.C. (the Bank) is a public shareholding company incorporated in Kuwait on 29 October 1960 and is registered as a Bank with the Central Bank of Kuwait. Its registered office is at Mubarak Al Kabir Street, P.O. Box 3200, 13032 Safat, Kuwait. The interim condensed financial information of the Bank for the nine months period ended 30 September 2012 was authorised by the Board of Directors for issue on 8 October 2012. Amendments to IFRS, which are effective for the annual accounting period starting from 1 January 2012 did not have any material impact on the accounting policies, financial position or performance of the Bank. The Bank has not early adopted any other standards, interpretations or amendments that have been issued but not effective. ─────────────────────────────────────────────────────────────── 7 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 BASIC AND DILUTED EARNINGS PER SHARE Profit for the period SHARE CAPITAL Authorised, issued and fully paid up TREASURY SHARES Number of treasury shares Percentage of treasury shares Cost of treasury shares (KD 000’s) Market value of treasury shares (KD 000’s) BONUS SHARES 2,633,087,484 Shares Shares 9,110 ──────── 4 Less: Weighted average number of treasury shares 9,623 ──────── (62,480,761) ───────── 2,570,606,723 ═════════ 4 (48,202,499) ───────── ═════════ Weighted average number of issued shares 2,633,087,484 2,584,884,985 Basic and diluted earnings per share (Fils) 29,140 25,479 24,369 ─────── ─────── ─────── 6. The shareholders at the Annual General Meeting held on 17 March 2012 approved the distribution of bonus shares of 5% on the outstanding issued share capital as at 31 December 2011 amounting to KD 12,539 thousand (31 December 2011: Nil and 30 September 2011: Nil) representing 125,385,118 shares of 100 fils each. 50,651 44,965 43,408 ─────── ─────── ─────── 2.52% 1.99% 1.87% ─────── ─────── ─────── 66,227,202 49,958,737 46,863,737 30 September 31 December 30 September 2012 2011 2011 ═══════ ═══════ ═══════ 5. (Unaudited) (Audited) (Unaudited) KD 000's KD 000's KD 000's 2,633,087,484 (2011: 2,507,702,366) shares of 100 fils each 263,309 250,770 250,770 30 September 31 December 30 September 2012 2011 2011 ═════════ ═════════ 4. (Unaudited) (Audited) (Unaudited) ═════════ ═════════ Earnings per share calculations for the three and nine months period ended 30 September 2011 have been adjusted to take account of the bonus shares issued in 2012. 2,575,857,400 2,584,394,167 ═════════ ═════════ 9 11 2,633,087,484 2,633,087,484 (57,230,084) (48,693,317) ───────── ───────── ──────── ──────── Shares Shares 30 September 30 September 2012 2011 KD 000's KD 000's ended ended 22,417 27,422 3 months ended 30 September 2011 KD 000's 3 months ended 30 September 2012 KD 000's 3. Basic and diluted earnings per share are based on the weighted average number of shares outstanding during the period, which is as follows: 9 months 9 months ─────────────────────────────────────────────────────────────── 8 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 SEGMENTAL ANALYSIS By Business Unit Commercial Banking Treasury & Investments Segmental information for the nine months period ended 30 September is as follows: Segment result Unallocated income Unallocated expense Profit for the period Segment assets Unallocated assets Total Assets Segment liabilities 4,811,294 ═════ ═════ Total Liabilities and Equity 4,828,918 557,126 ────── ────── Unallocated liabilities and equity 590,599 2,921,969 2,919,299 1,316,350 1,334,869 4,238,319 4,254,168 ═════ ═════ 4,828,918 4,811,294 ────── ────── 67,476 64,508 3,463,739 3,368,211 1,297,703 1,378,575 4,761,442 4,746,786 ═════ ═════ 22,417 27,422 ────── ────── (53,248) (46,270) 18,255 9,207 47,704 56,328 9,706 8,157 57,410 64,485 107,011 ══════ ══════ ══════ ══════ ══════ ══════ Operating income (Excluding unallocated income provided below) 100,433 92,626 14,502 14,385 114,935 KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's Commercial Banking Investments Total 2012 2011 2012 2011 2012 2011 7. Acceptance of deposits from individuals, corporates’ and institutional customers and providing consumer loans, overdrafts, credit card facilities and funds transfer facilities to individuals; and other credit facilities of corporate and institutional customers. Providing money market, trading and treasury services, as well as management of the Bank’s funding operations by use of treasury bills, government securities, placements and acceptances with other banks. The proprietary investments of the Bank are managed by the investments unit. Treasury & ─────────────────────────────────────────────────────────────── 9 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 RELATED PARTY TRANSACTIONS The balances included in the financial position are as follows: Board members: Executive management: Board members, directors and key management personnel: Interest income earned Interest expense on deposits Key management compensation: Salaries and other short-term benefits End of service/termination benefits 2,224 2,087 71 77 1,589 1,624 2,346 2,162 30 September 30 September KD 000's KD 000's 2012 2011 Guarantees issued 1 1 1 The loans granted to directors and key management personnel are repayable within three years and have interest rates of 3% to 6.5% (2011: 3% to 7%) per annum. Some of the loans advanced above are collateralised. The fair value of these collaterals as of 30 September 2012 was KD 53,775 thousand (31 December 2011: KD 92,598 thousand and 30 September 2011: KD 95,056 thousand). The transactions included in the interim condensed financial information are as follows: Loans, receivables and advances 52,749 110,674 101,449 Investments available-for-sale 762 780 819 2012 2011 2011 KD 000's KD 000's KD 000's (Unaudited) (Audited) (Unaudited) 30 September 31 December 30 September 8. Certain related parties (directors and officers of the Bank, their families and companies of which they are principal owners) were customers of the Bank in the ordinary course of business. The terms of these transactions are approved as per the Bank's policy. Directors and Key Management Personnel - 2,162 - Provision for losses on receivable from related parties Loans 546 561 1,030 Deposits 1,213 1,382 1,438 Deposits 224,484 321,622 348,597 Guarantees issued 6,493 35,917 9,900 9 months ended 9 months ended ─────────────────────────────────────────────────────────────── 10 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 CONTINGENT LIABILITIES AND COMMITMENTS Guarantees Letters of credit Irrevocable commitment to extend credit: Original term to maturity of more than one year DERIVATIVES Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured product Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured product Derivatives instruments held as: ══════ ══════ ══════ ══════ ══════ ══════ total 3 months months 1 year 567 (749) ────── ────── ────── ────── ────── ────── 3,653 (5,602) 330,177 130,376 68,111 131,690 37 (4,886) 222,409 68,869 21,850 131,690 2,980 - 11,244 11,244 - - KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's 636 (716) 96,524 50,263 46,261 - At 31 December 2011: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over fair value fair value total 3 months months 1 year ══════ ══════ ══════ As at 30 September 2012 the Bank had undrawn commitments to extend overdraft facilities to customers amounting to KD 91,128 thousand (31 December 2011: KD 115,499 thousand and 30 September 2011: KD 111,402 thousand). The contractual terms entitle the Bank to withdraw these facilities at any time. The table below shows notional amounts of derivative financial instruments analysed by the term to maturity. The notional amount is the amount of a derivative’s underlying asset, reference rate or index and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of transactions outstanding at the period end and are not indicative of either market or credit risk. At 30 September 2012: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over 10. In the ordinary course of business the Bank enters into various types of transactions that involve derivative financial instruments. A derivative financial instrument is a financial contract between two parties where payments are dependent upon movements in price of one or more underlying financial instruments, reference rate or index. 1,160,264 1,240,181 1,194,481 ────── ────── ────── - - 2,755 197,010 266,590 277,643 KD 000's KD 000's KD 000's 963,254 973,591 914,083 30 September 31 December 30 September 2012 2011 2011 9. (Unaudited) (Audited) (Unaudited) fair value fair value ══════ ══════ ══════ ══════ ══════ ══════ ────── ────── ────── ────── ────── ────── 9,483 (11,593) 382,305 83,530 146,627 152,148 Derivatives instruments held as: KD 000's KD 000's 8,916 - 11,142 - 11,142 - 76,457 70,995 5,462 - - (10,844) 294,706 12,535 130,023 152,148 KD 000's KD 000's KD 000's KD 000's ─────────────────────────────────────────────────────────────── 11 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 September 2012 DERIVATIVES (continued) Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured products ══════ ══════ 10,428 - 11,020 - - 11,020 ────── ────── ────── ────── ────── ────── 179 (167) 80,476 19,945 60,531 - - (11,885) 330,048 38,570 73,499 217,979 fair value fair value total 3 months months 1 year 10,607 (12,052) 421,544 58,515 134,030 228,999 ══════ ══════ ══════ ══════ Derivatives instruments held as: 10. At 30 September 2011: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's ─────────────────────────────────────────────────────────────── 12
GULF BANK K.S.C. INTERIM CONDENSED FINANCIAL INFORMATION (UNAUDITED)
30 June 2012
Note Interest income 44,576 43,149 88,607 85,036 Interest expense 14,863 16,788 30,167 34,258 ________ ________ ________ ________ Net interest income 29,713 26,361 58,440 50,778 Net fees and commissions 6,445 8,587 14,401 16,253 Net gains from dealing in foreign currencies and derivatives 2,263 6,569 9,436 11,637 Realised gains from disposal of investments available-for-sale 2,389 3,026 2,552 3,831 Dividend income 221 50 221 53 Other income 257 179 577 334 ________ ________ ________ ________ OPERATING INCOME 41,288 44,772 85,627 82,886 ________ ________ ________ ________ Staff expenses 7,978 8,059 16,928 15,859 Occupancy costs 857 774 1,637 1,454 Depreciation 718 699 1,418 1,382 Other expenses 2,894 1,448 6,979 4,257 ________ ________ ________ ________ Operating expenses 12,447 10,980 26,962 22,952 ________ ________ ________ ________ OPERATING PROFIT BEFORE PROVISIONS / IMPAIRMENT LOSSES 28,841 33,792 58,665 59,934 Charge of provisions: - specific 1,396 3,349 9,315 7,261 - general 20,742 14,698 34,566 35,682 Loans (recoveries)/ written-off (1,674) 6,139 (5,108) (5,588) Impairment loss on investments available-for-sale 2,697 672 6,496 3,409 ________ ________ ________ ________ OPERATING PROFIT 5,680 8,934 13,396 19,170 Contribution to Kuwait Foundation for the Advancement of Sciences 58 90 135 192 National Labour Support Tax 140 220 332 474 Zakat 58 90 135 192 ________ ________ ________ ________ PROFIT FOR THE PERIOD 5,424 8,534 12,794 18,312 ═══════ ═══════ ═══════ ═══════ BASIC AND DILUTED EARNINGS PER SHARE (Fils) 3 2 3 5 7 ═══════ ═══════ ═══════ ═══════ GULF BANK K.S.C. Interim Condensed Statement of Income (Unaudited) PERIOD ENDED 6 months ended The attached notes 1 to 10 form part of the interim condensed financial information. 3 months ended 3 months ended 30 June 30 June 2012 2011 KD 000's KD 000's 6 months ended 30 June 2011 KD 000's 30 June 2012 KD 000's 2 Profit for the period 5,424 8,534 12,794 18,312 ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Other comprehensive expense Net unrealised losses on investments available-for-sale (2,646) (742) (5,492) (139) Net realised gains on disposal of/ impairment losses on investments available-for-sale recycled 1,629 (2,131) 5,300 (1,431) ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Other comprehensive expense for the period (1,017) (2,873) (192) (1,570) ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ ▬▬▬▬▬▬▬▬ Total comprehensive income for the period 4,407 5,661 12,602 16,742 ═══════ ═══════ ═══════ ═══════ The attached notes 1 to 10 form part of the interim condensed financial information. GULF BANK K.S.C. Interim Condensed Statement of Comprehensive Income (Unaudited) PERIOD ENDED 3 months ended 3 months ended 6 months ended 6 months ended 30 June 30 June 2012 2011 KD 000's KD 000's 30 June 30 June 2012 2011 KD 000's KD 000's 3 Notes ASSETS Cash and short term funds 343,986 370,519 281,977 Treasury bills and bonds 456,102 418,221 537,992 Central Bank of Kuwait bonds 413,546 429,482 342,479 Deposits with banks and other financial institutions 32,057 20,000 76,256 Loans and advances to banks 61,259 34,140 45,413 Loans and advances to customers 3,366,968 3,334,087 3,242,667 Investments available-for-sale 132,013 106,009 102,153 Other assets 44,012 47,513 47,561 Premises and equipment 25,896 25,924 25,859 __________ __________ __________ TOTAL ASSETS 4,875,839 4,785,895 4,702,357 ═══════ ═══════ ═══════ LIABILITIES AND EQUITY LIABILITIES Due to banks 190,789 76,179 71,181 Deposits from financial institutions 811,300 776,819 819,548 Customer deposits 3,251,676 3,330,444 3,222,816 Subordinated loans 84,045 83,565 82,335 Other liabilities 97,798 88,629 77,972 __________ __________ __________ TOTAL LIABILITIES 4,435,608 4,355,636 4,273,852 __________ __________ __________ EQUITY Share capital 4 263,309 250,770 250,770 Proposed bonus shares - 12,539 - Statutory reserve 2,469 2,469 - Share premium 153,024 153,024 153,024 Property revaluation reserve 16,698 16,698 16,243 Treasury share reserve 24,258 24,289 24,289 Fair valuation reserve 7,017 7,209 15,748 Retained earnings 21,020 8,226 10,926 __________ __________ __________ 487,795 475,224 471,000 Treasury shares 5 (47,564) (44,965) (42,495) __________ __________ __________ 440,231 430,259 428,505 __________ __________ __________ TOTAL LIABILITIES AND EQUITY 4,875,839 4,785,895 4,702,357 ═══════ ═══════ ═══════ Mahmoud Abdul Khaleq Al Nouri Michel Accad (Chairman) (Chief General Manager & Chief Executive Officer) The attached notes 1 to 10 form part of the interim condensed financial information. 2012 2011 2011 KD 000's KD 000's KD 000's 30 June (Audited) 31 December (Unaudited) 30 June GULF BANK K.S.C. Interim Condensed Statement of Financial Position (Unaudited) 4 OPERATING ACTIVITIES Profit for the period 12,794 18,312 Adjustments: Realised gains from disposal of investments available-for-sale (2,552) (3,831) Dividend income (221) (53) Depreciation 1,418 1,382 Effective interest rate adjustment - 1,563 Loan loss provisions 43,881 42,943 Loans (recoveries)/written-off (5,108) (5,588) Impairment loss on investments available-for-sale 6,496 3,409 Foreign exchange movement on subordinated loans 480 (1,845) __________ __________ OPERATING PROFIT BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES 57,188 56,292 (Increase)/decrease in operating assets: Treasury bills and bonds (37,881) (16,529) Central Bank of Kuwait bonds 15,936 (32,424) Deposits with banks and other financial institutions (12,057) 34,954 Loans and advances to banks (27,119) (23,633) Loans and advances to customers (71,705) (100,399) Other assets 3,501 8,096 (Decrease)/increase in operating liabilities: Due to banks 114,610 3,860 Deposits from financial institutions 34,481 (67,029) Customer deposits (78,768) 151,950 Other liabilities 9,220 (1,955) __________ __________ NET CASH FLOWS FROM OPERATING ACTIVITIES 7,406 13,183 __________ __________ INVESTING ACTIVITIES Purchase of investments available-for-sale (37,026) (25,721) Proceeds from sale of investments available-for-sale 6,886 14,638 Purchase of premises and equipment (1,390) (1,417) Dividends received 221 53 __________ __________ NET CASH FLOWS USED IN INVESTING ACTIVITIES (31,309) (12,447) __________ __________ FINANCING ACTIVITIES Purchase of treasury shares (2,667) (13) Proceeds from sale of treasury shares 37 1,061 __________ __________ NET CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES (2,630) 1,048 __________ __________ NET (DECREASE)/INCREASE IN CASH AND SHORT TERM FUNDS (26,533) 1,784 CASH AND SHORT TERM FUNDS AT 1 JANUARY 370,519 280,193 __________ __________ CASH AND SHORT TERM FUNDS AT 30 JUNE 343,986 281,977 ═══════ ═══════ Additional cash flow information Interest received 96,968 85,199 Interest paid 29,524 35,370 GULF BANK K.S.C. Interim Condensed Statement of Cash Flows (Unaudited) PERIOD ENDED 6 months ended 6 months ended The attached notes 1 to 10 form part of the interim condensed financial information. 30 June 30 June 2012 2011 KD 000's KD 000's 5 At 1 January 2011 Profit for the period Other comprehensive expense for the period Total comprehensive (expense)/income for the period Purchase of treasury shares Sale of treasury shares Loss on sale of treasury shares At 30 June 2011 At 1 January 2012 Profit for the period Other comprehensive expense for the period Total comprehensive (expense)/income for the period Issue of bonus shares (Note 6) Purchase of treasury shares Sale of treasury shares Loss on sale of treasury shares At 30 June 2012 The attached notes 1 to 10 form part of the interim condensed financial information. - - - (1,570) 18,312 16,742 - 16,742 - (31) 24,289 7,209 8,226 211,915 (44,965) 430,259 (192) - 18,312 - - - - - - (1,570) - (1,570) - (1,570) - - - - - - - 18,312 18,312 - - - - (192) - - - - - - - 12,794 12,794 - 12,794 (42,495) 428,505 153,024 16,698 KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's (7,386) 204,192 - - - - - - (192) - (192) - 250,770 - - 153,024 16,243 24,289 15,748 10,926 220,230 250,770 12,539 2,469 GULF BANK K.S.C. Interim Condensed Statement of Changes in Equity (Unaudited) SIX MONTHS PERIOD ENDED Share capital Proposed bonus shares Statutory reserve Share premium Property revaluation reserve Treasury share reserve R E S E R V E S KD 000's KD 000's Fair valuation reserve (Accumulated deficit) retained earnings Sub-total reserves Treasury shares Total - - - - - 250,770 - - 153,024 16,243 - - - - (13) (13) 24,993 17,318 (44,247) 410,715 - - - - - - - - - - (704) - - (704) - (704) - - - 1,765 1,765 - - - - - - - - - - - - - - - 12,539 (12,539) - - - - - - - - 12,794 12,602 - 12,602 - - - - (2,667) (2,667) - - - - - - 263,309 - 2,469 153,024 16,698 24,258 7,017 21,020 224,486 (47,564) 440,231 - - - - 68 68 - (31) - - (31) 6 INCORPORATION AND REGISTRATION BASIS OF PRESENTATION GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 1. Gulf Bank K.S.C. (the Bank) is a public shareholding company incorporated in Kuwait on 29 October 1960 and is registered as a Bank with the Central Bank of Kuwait. Its registered office is at Mubarak Al Kabir Street, P.O. Box 3200, 13032 Safat, Kuwait. The interim condensed financial information of the Bank for the six months period ended 30 June 2012 was authorised by the Board of Directors for issue on 10 July 2012. Amendments to IFRS, which are effective for the annual accounting period starting from 1 January 2012 did not have any material impact on the accounting policies, financial position or performance of the Bank. The Bank has not early adopted any other standards, interpretations or amendments that have been issued but not effective. 2. This interim condensed financial information of the Bank has been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting" except as noted below: The annual financial statements for the year ended 31 December 2011 were prepared in accordance with the regulations of the State of Kuwait for financial services institutions regulated by the Central Bank of Kuwait. These regulations require adoption of all International Financial Reporting Standards (IFRS) except for the IAS 39 requirement for collective impairment provision, which has been replaced by the Central Bank of Kuwait’s requirement for a minimum general provision made on all applicable credit facilities (net of certain categories of collateral) that are not provided specifically. The accounting policies used in the preparation of the interim condensed financial information are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2011. The interim condensed financial information does not contain all information and disclosures required for full financial statements prepared in accordance with International Financial Reporting Standards, and should be read in conjunction with the Bank's annual financial statements for the year ended 31 December 2011. Futher, operating results for the six months period ended 30 June 2012 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2012. This interim condensed financial information has been presented in Kuwaiti Dinars rounded off to the nearest thousand. ─────────────────────────────────────────────────────────────── 7 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 BASIC AND DILUTED EARNINGS PER SHARE Profit for the period SHARE CAPITAL Authorised, issued and fully paid up TREASURY SHARES Number of treasury shares Percentage of treasury shares Cost of treasury shares (KD 000’s) Market value of treasury shares (KD 000’s) BONUS SHARES 3. Basic and diluted earnings per share are based on the weighted average number of shares outstanding during the period, which is as follows: 6 months 6 months ended ended 12,794 18,312 3 months ended 30 June 2011 KD 000's 3 months ended 30 June 2012 KD 000's ──────── ──────── Shares Shares 30 June 30 June 2012 2011 KD 000's KD 000's 2,578,511,587 2,584,144,607 ═════════ ═════════ 5 7 2,633,087,484 2,633,087,484 (54,575,897) (48,942,877) ───────── ───────── 30 June 31 December 30 June 2012 2011 2011 ═════════ ═════════ 4. (Unaudited) (Audited) (Unaudited) ═════════ ═════════ Earnings per share calculations for the period ended 30 June 2011 have been adjusted to take account of the bonus shares issued in 2012. ═══════ ═══════ ═══════ 5. (Unaudited) (Audited) (Unaudited) KD 000's KD 000's KD 000's 2,633,087,484 (2011: 2,507,702,366) shares of 100 fils each 263,309 250,770 250,770 58,566,138 49,958,737 45,033,737 30 June 31 December 30 June 2012 2011 2011 47,564 44,965 42,495 ─────── ─────── ─────── 2.22% 1.99% 1.80% ─────── ─────── ─────── 25,476 25,479 24,318 ─────── ─────── ─────── 6. The shareholders at the Annual General Meeting held on 17 March 2012 approved the distribution of bonus shares of 5% on the outstanding issued share capital as at 31 December 2011 amounting to KD 12,539 thousand (31 December 2011: Nil and 30 June 2011: Nil) representing 125,385,118 shares of 100 fils each. 2,633,087,484 Shares Shares 8,534 ──────── 3 Less: Weighted average number of treasury shares 5,424 ──────── (56,323,330) ───────── 2,576,764,154 ═════════ 2 (48,461,321) ───────── ═════════ Weighted average number of issued shares 2,633,087,484 2,584,626,163 Basic and diluted earnings per share (Fils) ─────────────────────────────────────────────────────────────── 8 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 SEGMENTAL ANALYSIS By Business Unit Commercial Banking Treasury & Investments Segmental information for the six months period ended 30 June is as follows: Segment result Unallocated income Unallocated expense Profit for the period Segment assets Unallocated assets Total Assets Segment liabilities 7. Acceptance of deposits from individuals, corporates’ and institutional customers and providing consumer loans, overdrafts, credit card facilities and funds transfer facilities to individuals; and other credit facilities of corporate and institutional customers. Providing money market, trading and treasury services, as well as management of the Bank’s funding operations by use of treasury bills, government securities, placements and acceptances with other banks. The proprietary investments of the Bank are managed by the investments unit. Treasury & KD 000's Commercial Banking Investments Total 2012 2011 2012 2011 2012 2011 Operating income (Excluding unallocated income provided below) 66,355 61,700 8,475 12,146 74,830 KD 000's KD 000's KD 000's KD 000's KD 000's 34,044 38,028 5,013 7,385 39,057 45,413 73,846 ══════ ══════ ══════ ══════ ══════ ══════ (37,060) (36,141) 10,797 9,040 12,794 18,312 ────── ────── ═════ ═════ 69,909 79,138 3,466,149 3,301,024 1,339,781 1,322,195 4,805,930 4,623,219 4,875,839 4,702,357 ────── ────── 2,873,834 2,956,435 1,416,479 1,195,433 4,290,313 4,151,868 ═════ ═════ 550,489 ────── ────── Unallocated liabilities and equity 585,526 4,702,357 ═════ ═════ Total Liabilities and Equity 4,875,839 ─────────────────────────────────────────────────────────────── 9 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 RELATED PARTY TRANSACTIONS The balances included in the financial position are as follows: Board members: Executive management: Board members, directors and key management personnel: Interest income earned Interest expense on deposits Key management compensation: Salaries and other short-term benefits End of service/termination benefits - 2,162 - Provision for losses on receivable from related parties Loans 551 561 1,037 Deposits 1,699 1,382 1,374 Deposits 226,548 321,622 353,776 Guarantees issued 5,851 35,917 12,508 6 months ended 6 months ended 8. Certain related parties (directors and officers of the Bank, their families and companies of which they are principal owners) were customers of the Bank in the ordinary course of business. Such transactions were made on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable transactions with unrelated parties, and did not involve more than a normal amount of risk. Directors and Key Management Personnel 2012 2011 2011 KD 000's KD 000's KD 000's (Unaudited) (Audited) (Unaudited) 30 June 31 December 30 June Guarantees issued 1 1 1 The loans granted to directors and key management personnel are repayable within three years and have interest rates of 3% to 7% (2011: 3% to 7%) per annum. Some of the loans advanced above are collateralised. The fair value of these collaterals as of 30 June 2012 was KD 54,082 thousand (31 December 2011: KD 92,598 thousand and 30 June 2011: KD 98,634 thousand). The transactions included in the interim condensed financial information are as follows: Loans, receivables and advances 54,059 110,674 101,093 Investments available-for-sale 762 780 853 1,070 573 1,712 1,183 30 June 2012 30 June 2011 KD 000's KD 000's 1,469 1,399 47 56 ─────────────────────────────────────────────────────────────── 10 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 CONTINGENT LIABILITIES AND COMMITMENTS Guarantees Letters of credit Irrevocable commitment to extend credit: Original term to maturity of more than one year DERIVATIVES Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured products Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured products Derivatives instruments held as: KD 000's KD 000's 8,916 - 11,142 - 11,142 - 76,457 70,995 5,462 - - (10,844) 294,706 12,535 130,023 152,148 KD 000's KD 000's KD 000's KD 000's ══════ ══════ ══════ ══════ ══════ ══════ ────── ────── ────── ────── ────── ────── 9,483 (11,593) 382,305 83,530 146,627 152,148 fair value fair value 9. (Unaudited) (Audited) (Unaudited) 30 June 31 December 30 June 2012 2011 2011 257,240 266,590 252,244 KD 000's KD 000's KD 000's 968,004 973,591 880,400 10. In the ordinary course of business the Bank enters into various types of transactions that involve derivative financial instruments. A derivative financial instrument is a financial contract between two parties where payments are dependent upon movements in price of one or more underlying financial instruments, reference rate or index. 1,225,244 1,240,181 1,166,950 ────── ────── ────── - - 34,306 fair value fair value total 3 months months 1 year ══════ ══════ ══════ As at the reporting date the Bank had undrawn commitments to extend overdraft facilities to customers amounting to KD 93,304 thousand (31 December 2011: KD 115,499 thousand and 30 June 2011: KD 103,144 thousand). The contractual terms entitle the Bank to withdraw these facilities at any time. The table below shows notional amounts of derivative financial instruments analysed by the term to maturity. The notional amount is the amount of a derivative’s underlying asset, reference rate or index and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of transactions outstanding at the period end and are not indicative of either market or credit risk. At 30 June 2012: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over At 31 December 2011: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's 648 (710) 106,112 61,301 44,811 - - (7,881) 241,268 19,611 68,637 153,020 5,121 - 11,206 - 11,206 - ────── ────── ────── ────── ────── ────── 5,769 (8,591) 358,586 80,912 124,654 153,020 ══════ ══════ ══════ ══════ ══════ ══════ total 3 months months 1 year 567 (749) Derivatives instruments held as: ─────────────────────────────────────────────────────────────── 11 GULF BANK K.S.C. Notes to the Interim Condensed Financial Information (Unaudited) 30 June 2012 DERIVATIVES (continued) Trading (and non qualifying hedges) Forward foreign exchange contracts Credit default swaps Structured products Derivatives instruments held as: 10. At 30 June 2011: Notional amounts by term to maturity Notional Positive Negative amount Within 3-12 Over KD 000's KD 000's KD 000's KD 000's KD 000's KD 000's 5,519 (10,554) 380,530 36,295 83,174 261,061 ══════ ══════ ══════ ══════ fair value fair value total 3 months months 1 year 90 (61) 22,922 18,456 4,466 - - (10,493) 346,630 17,839 78,708 250,083 5,429 - 10,978 - - 10,978 ────── ────── ────── ────── ────── ────── ══════ ══════ ─────────────────────────────────────────────────────────────── 12
Personal banking
Mailing Address
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Corporate Online Banking & Salaries
Mailing Address
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Treasury
Telephone
Sales Desk: +96522412530 / +96522444628
FX Desk: +96522436037 / +96522412360
ALM Desk: +96522412361 / +96522443429
Sales Desk: +96522412530 / +96522444628
FX Desk: +96522436037 / +96522412360
ALM Desk: +96522412361 / +96522443429
Mailing Address
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Investments
Mailing Address
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Business Banking
Mailing Address
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Gulf Bank, P.O. Box 3200, Safat 13032, Kuwait
Customers Complaints Unit
For written complaints,
please visit our Complaints Unit located in Gulf Bank’s Head Office, (Mubarak Al Kabeer street, fourth floor)
please visit our Complaints Unit located in Gulf Bank’s Head Office, (Mubarak Al Kabeer street, fourth floor)
Working hours
Sunday – Thursday, from 8:30am – 3:00pm
Sunday – Thursday, from 8:30am – 3:00pm
To access the complaints form please:
- Print and fill out the form
- Scan and email it to the Head of Complaints Unit at: complaintsunit@gulfbank.com.kw
*Steps to File a Complaint Against a CBK Regulated Entity: Download PDF
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