Bank of Bahrain and Kuwait has announced a 19.4 per cent hike in its half-yearly profits to BD19.5 million.

Net profits for three months ended 30 June grew to BD9.9 million, compared to BD7.3m for the same period in 2006, an increase of 36 per cent.

The improvement in profitability was driven by continuous growth in net interest income and other income, said the bank in a statement.

Net interest income for the first half of 2007 grew to BD24.1 million, an increase of BD4.1 million or 20.7 per cent. This resulted from growth in underlying customer assets and deposits and further improvement in net interest margins, said the bank.

The bank's other operating income for the six months' period also improved, increasing by 15.5 per cent to BD12 million from BD10.4 million in the previous year.

The main contributors to the increase were investment trading & other income, credit card income, loan fees and other commission income.

The operating expenses for the period increased by BD2.8 million as the bank continued to invest in human resources and infrastructure to support growth and development of new businesses. Operating expenses for the first half of 2006 were somewhat understated due to timing differences, said the bank.

The bank has seen an increase in its balance sheet to BD2.1 billion, an increase of BD363 million or 21 per cent compared to June 2006.

The growth was mainly supported by an increase of 13 per cent in customer loans and advances, which grew to BD1 billion, and a healthy increase in customer deposits which grew by 17.4 per cent to reach BD1.2 billion.

During the six months' period, ended on June 30 , the bank issued subordinated debt amounting to $275 million to support its growth strategy.