The London-based United Bank of Kuwait (UBK) has announced a net profit of £11.2 million ($17.7 million) for 1994, an increase of 10 per cent on the previous year. The bank has also announced the launch of a $160 million commercial loan securitisation project.
UBK says the profit increase was achieved despite a difficult year in international markets. It attributes healthy profits from its commercial division to financing activities in social housing and aviation.
Property lending in the UK also performed well in an improving UK property market. Its investment division was restructured in 1994 with the establishment of a centralised marketing department to co-ordinate its core units.
Total assets at UBK fell slightly in 1994 to £1,843.5 million ($2,930.5 million). Shareholders' equity rose marginally to £132 million ($209.1 million). The bank's capital adequacy ratio remained strong at 18.2 per cent. A dividend of £10.4 million ($16.5 million) has been declared for 1994, compared with £7.7 million ($12.2 million) in 1993.
The securitisation project, entitled ACRES (No.1) involves the financing of £108 million ($171.1 million) of commercial real estate mortgages using sterling floating rate notes issued in the Eurobond market.
UBK expects that £90 million ($142.6 million) of the total will be assigned a AAA rating by the Standards & Poors Rating Group. A further £12 million ($19.0 million) is expected to be assigned an A rating, and £6 million ($9.5 million) a BBB rating. The notes will mature in 2005.
The assets underlying the issue are a portfolio of loans secured on commercial investment property in the UK. The average size of the loans is £3 million ($4.8 million). The lead manager on the issue was the London-based Goldman Sachs International, and the legal advisers were the UK's Freshfields and Linklaters & Paines.
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