The bank made net profits for 2001 of $342 million, a 5 per cent increase on the previous year, headline figures released on 23 January show. 'These results are particularly pleasing considering the backdrop against which they were achieved,' says Ibrahim Dabdoub, NBK's chief executive officer. 'We saw all our business areas record improved performances despite a low and falling interest rate environment, and the instability that followed 11 September. It is one of our great strengths that we are a well diversified bank.'

Further geographical diversification is firmly on the agenda. 'We are in serious negotiations for the acquisition of a bank in a GCC country,' says Dabdoub, declining to name the country or the bank. MEED understands that Al-Ahli Bank of Qatar (ABQ)is the target. Rocked by management difficulties in recent years, the Central Bank of Qatar has taken the lead in restructuring ABQ and it is understood that a significant recapitalisation programme is under examination. Either new equity will be sold to a foreign entity - possibly NBK - or new Qatari strategic investors could be brought in: either approach is expected to be based on a doubling of ABQ's capital base.

NBK has also attempted to enter other Arab markets in recent years, most noticeably Egypt. 'Regional expansion is built into our strategy,' says Dabdoub. 'And we are still interested in Egypt, but are not currently actively pursuing an acquisition there.'

Celebrating its 50th anniversary this year, NBK is among the most profitable and best performing banks in the region: in 2001 the bank generated returns on assets of 2.57 per cent and returns on equity of 25.4 per cent. The dominant bank in Kuwait, it is also one of the largest in the GCC, with total assets standing at $14,600 million at the end of 2001.

Pricing and allocations of NBK's debut Eurobond issue are expected to be finalised in the first week of February. The bank is aiming to sell $450 million worth of three-year instruments in what will be the first corporate Eurobond to be issued from the GCC (MEED 11:1:02). With the bond expected to be given a rating of A2 by US ratings agency Moody's Investor Services, it will serve as a benchmark for future regional Eurobond issues. Among regional banks understood to be considering Eurobond debuts are Saudi Arabia's Riyad Bank.