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NBK's capital increase ‘to support business growth’

KUWAIT, April 8, 2016

National Bank of Kuwait’s decision to increase its capital by 6.5 per cent would be a positive as it will enhance the bank’s capital adequacy ratios ahead of a full implementation of the Central Bank of Kuwait’s Basel III capital requirements by the end of the year, according to a report.
 
The latest credit outlook report released by Moody’s Investors Service, commented on NBK's recent capital increase announcement stressing that the additional capital will also support NBK's business growth in Kuwait, where the government continues to execute projects related to its five-year plan to develop the private sector, despite lower hydrocarbon revenues. 
 
NBK remains a key financier of major projects in the country.
 
The capital increase will involve an issuance of 344 million shares at 400 fils ($1.3) per share to existing shareholders, and follows the central bank’s February approval of NBK increasing its authorised capital. 
 
The proposed issuance price includes an issuance premium of 300 fils per share on top of a par value of 100 fils per share.
 
NBK's additional capital will be credit enhancing to NBK's standalone financial strength because it will increase the bank's buffers against unforeseen losses, said the report.
 
Meanwhile, the bank’s loss-absorption capacity is further bolstered by substantial total loan-loss reserves equivalent to 322 per cent of non-performing loans at the end of 2015, it said. - TradeArabia News Service



Tags: NBK | increase | capital | Moody’s |

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