23 October 2005 - UGB Nine Month Profits Soar 54% to US$ 50.7 Million

United Gulf Bank (UGB) of Bahrain, the investment banking subsidiary of Kuwait Projects Company (KIPCO), has announced net profit of US$ 50.7 million for the nine months of 2005, or 6.6 US cents per share. This represents a 54 per cent increase compared to the US$ 32.8 million net profit earned during the same period last year; exceeds UGB’s best-ever net profit of US$ 43.3 million for the full year 2004; and represents an historic quarter in terms of revenue and profit for the Bank.

UGB chief executive officer William Khouri said: “This strong performance continues the momentum of our past two record-earning years - US$ 43.3 million in 2004 and US$ 36.2 million in 2003. We have already exceeded in nine months our projected full year net profit forecast of US$ 50 million made at the “Shafafiyah” KIPCO Group Investors’ Forum in Kuwait in June, and we are headed towards our third record year in a row.

“These outstanding results are supported by strong performance in our core businesses, and in particular, the wealth management services provided by our subsidiary KIPCO Asset Management Company (KAMCO), which had an exceptional quarter,” he said.

UGB’s total consolidated revenue of US$ 123.5 million in the nine months of 2005 increased 72 per cent over the US$ 72 million recorded in the same period last year. Substantial growth in consolidated revenue has been broad-based, with an increase in investment income from US$ 27 million at September 2004 to US$ 54.5 million; and in fees and commission income to US$ 24.4 million from US$15.9 million at September 2004.

UGB’s strategy of core investments in associated companies has also paid off, as the nine-month share in their profits jumped from US$ 17.7 million in the same period last year to US$ 26.7 million as at September 2005.

Total consolidated assets at 30 September, 2005 were US$ 1.5 billion supported by total consolidated equity of US$ 409 million, as well as a diversified liability base recently bolstered by a US$ 175 million three-year Murabaha facility signed on October 20 in Vienna. Excess of market value of subsidiaries and associated companies over carrying value amounted to US$ 487 million on top of this substantial equity base.

UGB manages a diversified portfolio of investments in wealth and asset management, commercial banking, real estate, telecommunications, private equity and quoted securities.

Core investments in subsidiaries and associates include: Algeria Gulf Bank, Algeria; Gulf Egypt for Hotels and Tourism Company, Egypt; Jordan Kuwait Bank, Jordan; KAMCO, Kuwait; Tunis International Bank, Tunisia; UGB Securities Co., Bahrain; United Cable Company, Kuwait; United Industries Company, Kuwait; and United Real Estate Company, Kuwait. UGB has received regulatory approvals to acquire a 25 per cent stake and take over management of Bank of Baghdad, a commercial bank already in profitable operations in Iraq.

UGB and its subsidiary KIPCO Asset Management Company (KAMCO) have a proven track record of successful investment banking transactions including corporate finance advisory, new issue placement and underwriting, mergers and acquisitions, bond issuance and investment product structuring and placement. Assets under management exceed US$ 5.2 billion.

KIPCO is Kuwait’s largest private sector company with more than US$ 15 billion of Group assets and a portfolio of some 55 companies with major activities in financial services and media and telecommunications, as well as real estate, industry and management & advisory throughout the Middle East and North Africa, and substantial ownership interests in the U.S and Europe. KIPCO employs more than 12,000 people internationally and its shares are among the most actively traded on the Kuwait Stock Exchange. UGB forms part of KIPCO’s Financial Services Group, which operates banks and investment companies in Algeria, Tunisia, Jordan, Palestine, Cyprus, Bahrain, Kuwait and the U.S., with operations planned in Iraq, Qatar and Syria.

For further information please contact United Gulf Bank on telephone +973 17533233 or email info@ugbbah.com.