National Bank of Kuwait (NBK), the country’s largest lender, has blamed political deadlock for its 41.6 per cent drop in profits in the second quarter of the year.
The unusual public criticism of Kuwait’s fractious politics follows the announcement that the bank’s profits fell from $240.2m in the second quarter of 2011 to $140.2m this year.
“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,” said chief executive Ibrahim Dabdoub in a statement.
In the last six years, Kuwait has been through eight governments. It created the Partnerships Technical Bureau in 2008 to try and push through a wave of new infrastructure investment, but it too has become embroiled in Kuwait’s political squabbling after parliament voted against the award of a contract to build its first project, a power plant at Al-Zour North.
Analysts have said they were surprised at how bad the NBK results were and are expected to revise down their 2012 full year profit forecasts as a result.
Many of the banks in Kuwait have privately expressed dismay at the government’s inability to deliver on its $100bn economic development plan first announced in 2010, but the criticism has rarely been made publicly.