National Bank of Kuwait (NBK), described as the largest Kuwaiti bank and the highest-rated in the Middle East, reported a net profit of $ 431.2 million for the first half of 2012 compared with $ 523.5 million for the same period in 2011.

NBK's 1H 2012 profits were held back by the $ 96.4 million judgmental provision charges, reflecting the negative economic and geopolitical developments occurring both domestically and in the region and their potential implications on an already stagnant operating environment.

As of end of June 2012, NBK Group's total assets reached $ 51.1 billion up 4.4 percent compared to June 2011, while total group shareholders' equity increased by 4.9 percent year-on-year to $ 8.2 billion. NBK's net operating income recorded a solid $ 943 million, in line with last year's figure.

Ibrahim Dabdoub, NBK's Group CEO, said: "NBK continues to operate and deliver in a very challenging environment both domestically and regionally. Our first half profits were negatively affected by heavy judgmental provision charges. We have opted to set aside $ 96.4 million in judgmental provisions in face of a further potential deterioration in our operating environment. Domestically, a negative outlook is inevitable where Government spending remains dormant, tendering of new projects significantly lags and asset values continue contracting as the local stock market considerably underperforms. Add to that, the geopolitical developments that are putting further pressures on both the local and regional economic activity."

"NBK will continue to focus on core banking activities both in and outside Kuwait, with a clear strategy that aims at diversifying our income sources. During the first half of 2012 profits from our international operations grew by 44 percent year-on-year. Additionally, our recent move to increase our stake in Boubyan Bank strengthens our presence in Kuwait's Islamic banking market and opens new growth prospects for the Group" Dabdoub added.