Commercial Bank of Kuwait (CBK) has announced the resignation of its chairman, Derar Al-Rabah, just one month after he was appointed to the post.

Al-Rabah was chosen as chairman on 8 April, after shareholders elected a new seven-member board of directors for the bank for a period of three years, after the old CBK board resigned in January.

In a statement posted on the Kuwait Stock Exchange’s website on 10 May, the country’s second-largest lender by market value, said it had summoned reserve board member Ali al-Musa, but it did not specify who would replace Al-Rabah.

The bank has still not given a reason for the departure of the old CBK board, but shareholders voted to delay releasing the old board from its responsibilities, after asking for their pay to be examined.

Ratings agency Standard & Poor’s (S&P) lowered CBK’s long-term credit rating to BBB from A- on 7 April, citing the bank’s weakened asset quality and funding profile.

The bank appears heavily exposed, directly and indirectly, to the real estate and construction sector, as well as to the performance of the local stock market, noted the agency.

Non-performing loans (NPLs) stood at 17 per cent of total gross loans at the end of 2009, compared with less than 5 per cent at the end of 2008 (MEED 8:04:10).