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Press Release

Various Kuwaiti Banks Placed On CreditWatch Negative On Large Exposure To Investment Companies

LONDON (Standard & Poor's) Feb. 16, 2009--Standard & Poor's Ratings Services said today that it placed its 'A-' long-term counterparty credit ratings on Kuwait Finance House and Commercial Bank of Kuwait on CreditWatch with negative implications. At the same time, the 'A-2' short-term counterparty credit ratings on these banks were affirmed. Furthermore, Standard & Poor's placed its 'BBB+/A-2' long- and short-term counterparty credit ratings on Al Ahli Bank of Kuwait and Burgan Bank on CreditWatch with negative implications. At the same time, Standard & Poor's commented on its CreditWatch placement of Kuwait-based Gulf Bank. The 'A-/A-2' long- and short-term counterparty credit ratings on Gulf Bank remain on CreditWatch with negative implications, where they had been placed on Oct. 27, 2008.

Kuwait Finance House Malaysia said last Friday it has received a USD 300 mn capital injection from its parent, increasing the paid-up capital to USD 500 mn.

Edward Russell reported on Financeasia on 2 February, that Kuwait Finance House’s (KFH) 2008 posts profit before charges but faces falling revenues. In Q4, KFH's revenue fell 16.3 % quarter-on-quarter to KD 185 mn. The revenue decline increased 3.7 % from the previous quarter when it fell 12.5 % quarter-on-quarter. Despite the decline in revenues in the second half of the year, the bank managed to report an overall increase in income of 6.5 % year-on-year.

The finance house's unaudited full-year net profit totalled KD 157 mn(USD 542 mn on revenues of KD 884.9 mn. Given the current economic environment, KFH announced to retain KD 211 mn as a "provision". After the KD 211 mn provision, KFH lost anywhere between KD4 8 mn and KD54 mn for the year. Full-year and fourth-quarter audited results have yet to be released.

Finalternatives reported on 22 April that Millennium Private Equity has held a first close on its Global Energy Fund, which has raised USD 200 mn, and its Telecoms, Media & Technology Fund at USD 150 mn. Both are targeting USD 1 bn in equity. The funds shall have a tenor of 7 years, targeting 20 % IRR and investing between USD 20 to 100 mn per transaction.

Sponsors of the funds include Dubai Islamic Bank, United Gulf Bank, the Bahrain-based investment banking arm of the KIPCO Group of Kuwait, and the Saudi Arabian Islamic Development Bank, each conbtributing USD 50 mn to each fund, as well as Kuwait Finance House, which invests USD 50 mn into in the Global Energy Fund.

Keba Keinde is chief executive of Millennium Finance Corporation and chairman of Millennium Private Equity. Millennium Private Equity, a subsidiary of Millennium Finance Corp., is based at the Dubai International Financial Centre.

Source: http://www.finalternatives.com/node/4155

Reuters reported on 20 April that JP Morgan eyes a stake in Kuwait Finance House quoting a local daily al-Anba based on an unsourced report. The local paper shall have said that the U.S. bank had applied to the central bank of Kuwait to approve a stake buy, adding it was unclear how large a stake it wanted to acquire.

Source: http://www.reuters.com/article/innovationNews/idUSL2066795520080420