Bahrain, 7^th March 2007  - US$ 70 Million Dividend for Shareholders of United Gulf Bank

United Gulf Bank (UGB) held its Annual General Meeting at its offices in UGB Tower, Diplomatic Area, Bahrain on Wednesday, 7 March 2007 with more than 90 per cent of shareholders represented.

Shareholders commended the Bank on its performance as UGB closed the year with another record net profit of US$ 101.5 million, historically the best in 27 years and 25.3 per cent higher than the US$ 81 million in 2005. The results put UGB’s return on average equity at 23.5 per cent and return on average assets at 5 per cent, reaffirming its position in the league of top performing banks in the region.

Shareholders also remarked on the substantial hidden value on the books. The market value of investments in five listed subsidiaries and associates, namely: Jordan Kuwait Bank, KIPCO Asset Management Company (KAMCO), United Real Estate Company, United Industries Company and Bank of Baghdad was US$ 271.8 million in excess of UGB’s carrying values of these investments as of 31 December 2006.

 

UGB Chairman, Mr Faisal Al-Ayyar, highlighted the significant events which took place during 2006. These were:

 

·               UGB registered another year of record revenues reaching US$ 241.8 million compared to US$ 198.8 million and profitability of US$ 101.5 million compared to US$ 81 million in 2005.

·               EPS soaring to another height at 12.81 US cents from 10.54 US cents in 2005. 

·               During the year the Bank raised US$ 100 million in its debut Subordinated Step-up Floating Rate Notes due 2016.

·               In March 2006, the Bank took over management advisory role of its associate in Iraq, Bank of Baghdad.

·               Syria Gulf Bank, our associate went to the market in Syria with its IPO which was 2.5 times oversubscribed.  The bank is set to open its doors for business in the first quarter in 2007.

·               Tunis International Bank, our subsidiary, opened its Representative Office in Tripoli in May 2006.

·               United Gulf Financial Services Company in Qatar is set to commence operations providing asset management and investment banking services.

·               Capital Intelligence upgraded UGB's rating to BBB+/A2 and Moody's assigned a first time investment grade rating of Baa3/Prime -3.

The Chairman also highlighted the gain of US$ 96 million which UGB will probably recognize largely in the first quarter in 2007 upon completion of the agreed sale of its shares in National Mobile Telecommunication, Kuwait (NMTC) and its 9% stakes in each of NMTC’s Iraqi and Algerian operations.  This has set the Bank on a course to yet another record profit in 2007.

In view of the outstanding profits generated by the Bank during 2006, the Annual General Meeting approved the payment of 34.6 per cent in cash dividend (8.65 US cents per share) compared to a 27.5 per cent cash dividend (6.875 US cents per share) in 2005.

Notes to editors:

UGB, the investment banking subsidiary of Kuwait Projects Company (Holding) (KIPCO), manages a regional network of investment/asset management companies and commercial banks. Its proprietary investments include assets in real estate, telecommunications, private equity, structured products and quoted securities. At year-end 2006, assets under management exceeded US$ 6.4 billion. UGB’s core subsidiaries and associates include: Algeria Gulf Bank, Al-Dhiyafa Investment Company, Bank of Baghdad, Jordan Kuwait Bank, KIPCO Asset Management Company (KAMCO), Manafae Investment Company, Tunis International Bank, United Gulf Bank Securities Company, United Cable Company, United Industries Company, United Real Estate Company, United Medical Services Company, United Gulf Financial Services Company, MAC United, Syria Gulf Bank and United Warehousing & Cooling. UGB and its subsidiary KAMCO have a proven track record of successful investment banking activities including corporate finance advisory, new issue placement and underwriting, mergers and acquisitions, bond issuance and investment product structuring and placement.

KIPCO is an US$ 18 billion enterprise with major activities in financial services, media and telecommunications and a variety of other business sectors across the Middle East and North Africa. The group has substantial ownership interests in a portfolio of some 54 companies operating throughout the region and internationally.

- Ends -

For further information please contact:

William Khouri, Chief Executive Officer, United Gulf Bank , +973 17 533233, www.ugbbah.com