National Bank of Kuwait (NBK), the largest Kuwaiti bank, reported a net profit of $814.4 million (KD228.9 million) for the first nine months of 2012 compared with $802.4 million for the same period of 2011.

The bank, which raised its stake in local lender Boubyan Bank to 58.3 per cent, said quarterly profit rose to 108.1 million dinars ($384.6 million) in the three months to September 30, compared with KD78.9 million a year ago.

Six analysts in a Reuters poll had predicted KD65.09 million net profit on average.

It did not give a reason for the profit rise in the statement and it was not immediately clear if Boubyan Bank's results were consolidated into NBK's third-quarter numbers.

NBK's Group chief executive officer, Ibrahim Dabdoub, has been a vocal critic of Kuwait's operating environment,  chief criticised government policy for holding back growth.

"Government spending continues to be insufficient and the tendering of new projects has significantly lagged leading to a stagnant stock market performance and dormancy in economic activity," he said in a statement announcing the results.

The improvement in Kuwait's operating environment "now depends on developing a more dynamic fiscal policy, most importantly accelerating spending on mega projects," the statement added.

NBK got regulator approval for its $431 million purchase of a 11.05 per cent stake in Boubyan Bank in July, taking its ownership to 58.34 per cent.

Its shares have fallen 2.8 per cent year-to-date on the Kuwait bourse, while Boubyan shares have risen 3.4 per cent.

Ibrahim Dabdoub, NBK’s group chief executive, said: “NBK managed to deliver another strong quarter notwithstanding the ongoing challenges. The operating environment continues to pose some barriers to our potential for growth. Government spending continues to be insufficient and the tendering of new projects has significantly lagged leading to a stagnant stock market performance and dormancy in economic activity. Moreover, the developing geopolitical tensions are also putting further pressures on the business sentiment both locally and in the region.”

“The recent results confirm NBK’s focus on core banking activities and the success of our regional expansion strategy. The diversification of our income sources continues to differentiate NBK and help us deliver strong results,” he concluded. – Reuters & TradeArabia News Service