In 2010 our efforts will be directed at ensuring the maximum ongoing operational efficiency of all our core business units.

The global banking business faced continued uncertainty in 2009. ABK, as an integral part of the international financial system and a major player in the Gulf region, encountered significant challenges during the year. Disappointingly, profits declined, but this was mainly due to our policy of adopting a stringent and prudent level of provisioning in order to safeguard the interests of shareholders and customers.

Nevertheless, we believe the Bank has entered the current year on a sound operational basis, with judicious risk management and cost control as our priorities. There are some signs that the global financial and economic outlook is improving, which we hope will speed the industry back towards the levels of activity enjoyed before the credit crisis. Shareholders, customers, employees and all stakeholders can be assured ABK has weathered the storm well, especially when compared to our local peer group.

In the early part of 2009 ABK, along with the rest of the regional banking business, continued to experience difficult trading conditions. Traditional growth areas like corporate and retail banking witnessed a tightening of margins and earnings. In Kuwait, volatility in asset values and equity markets put further strains on our business generators. Towards the end of the year, this tough environment was ameliorated to some degree by an improvement in global economic conditions, and a significant recovery in the oil price. The prompt and responsible actions of the Kuwaiti authorities have helped ensure a favourable environment for the first shoots of this fragile recovery. Let us hope this will continue in 2010.

The financial situation in Dubai was a matter of concern for all in the region, but with our minimal exposure in the UAE, we are confident it will not be a long-term problem for ABK. Corporate banking remains the mainstay of our business and a significant contributor to the economic life of Kuwait.

In retail banking, we enhanced our growing interface with customers by expanding our branch network and ATM locations, and our range of products and services. Our core strategy has been adapted and refined to meet current and forecast economic conditions. We remain committed to providing first class banking services for customers, depositors and business partners in the region, to minimise risks across all our business sectors, and to maximise value for our shareholders.

In 2010 our efforts will be directed at ensuring the maximum ongoing operational efficiency of all our core business units. Risk management is central to this objective. Our voluntary, but stringent, risk management policy is in line with the prudent and cautious regulatory policy of the Kuwait banking authorities. ABK welcomes their initiatives, which have helped Kuwait through a period of unprecedented financial turbulence. We are satisfied that, by international and regional standards, we have adequate and well-managed capital and liquidity resources.

Maintaining this strong capital position is one of our highest priorities. Our dedicated and highly motivated workforce has responded well to the unprecedented challenges of 2009, and I am grateful for their continued efforts.

ABK’s core strategy was tested last year by the most severe conditions the global markets could throw at us. We have come through that test with increased confidence for the current year, and the coming decade.

Colin Plowman
Chief General Manager &
Chief Executive Officer