31 May 2006 - Capital Intelligence Upgrades UGB’s Ratings

Capital Intelligence has upgraded United Gulf Bank’s investment grade foreign currency long term rating from BBB to BBB+, short term rating from A3 to A2 and Financial Strength rating has been placed at BBB+. The outlook remains Stable.

In its rating rationale the Capital Intelligence remarked “the Bank produced exceptionally strong earnings in the year under review. The Performance underscores the overall sound quality of assets combined with the strong contributions to profitability from its subsidiary, KIPCO Asset Management Company (KAMCO) and investment in associates, particularly the portfolio of core and strategic investments. Significant hidden value is currently held in UGB’s balance sheet relating to its core investments in Jordan Kuwait Bank, United Real Estate Company, United Industries Company and KAMCO, as these are carried well below market value. Liquidity is ample and underpinned by diversified source of funding. In recognition of the significant improvement in UGB’s overall risk profile, the foreign currency long and short-term ratings are upgraded to BBB+ and A2 respectively. A financial strength rating of BBB+ is assigned. The support rating of 3 and stable outlook are affirmed.”

Commenting on the upgrade, UGB Chief Executive, William Khouri said “we are very pleased to have our performance recognized by Capital Intelligence”. He further adds ” UGB hopes to achieve another record year of earnings in 2006 despite difficult capital markets thanks to a diversified and high quality asset base, a strategy of focusing on better management of risk assets, contributions from the network of newly rolled out Pan-MENA financial services entities, distributions from maturing fund investments and organic growth in core subsidiaries and affiliates.”

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. Assets under management exceed US$ 5.4 billion. UGB’s core subsidiaries and associates include: Algeria Gulf Bank, Al-Dhiyafa Investment Company, Bank of Baghdad, Jordan Kuwait Bank, KIPCO Asset Management Co. (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 and United Warehousing & Cooling. It has recently been granted a license by Qatar Financial Centre for its new asset management subsidiary, United Gulf Financial Services Company in Doha, Qatar and is close to completing the formalities for establishing a full commercial bank in Syria – Syria Gulf Bank. 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 one of the leading diversified operating holding companies in the Middle East and North Africa with more than US$ 15 billion under management or control. Its shares are among the most actively traded on the Kuwait Stock Exchange. It has substantial ownership interests in portfolio of 55 companies, operating throughout the region and internationally in two major business sectors: financial services and media and telecommunications. KIPCO has recently been assigned an investment grade rating by Standard & Poors.

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