Reuters Summit-UPDATE 1-Kuwait's Commercial Bank in bargain hunt

By Ulf Laessing and Rania El Gamal KUWAIT, Nov 4 (Reuters) - Commercial Bank of Kuwait (CBK) is seeking to expand in the Middle East and Asia, hoping to snap up assets whose prices have dropped as a result of the global financial crisis. CBK hopes to reach its 2008 profit goal, despite recent turmoil in financial markets and the impact this has had on the banking sector. Chairman Abdulmajeed al-Shatti told the Reuters Middle East Investment Summit that the country's third-largest lender by market value was looking to expand in the Middle East and Gulf and is in talks with a local investment firm to buy a majority stake in an unnamed Iraqi lender. "Iraq is always on our agenda. We are talking with a local Kuwaiti firm... we are talking about a majority stake in an Iraqi bank," he said. At the same time the lender is also considering opportunities in Asian countries such as India and the Islamic banking industry in Indonesia as it seeks to diversify its sources of income away from Kuwait. "India is a potential opportunity," he said, adding that CBK hoped for the government to open up the banking sector of the South Asian country. Shatti said asset prices were coming down around the globe as a result of the global credit crisis, with buyers typically now having to pay 2 times to a maxiumum 2.5 times book value compared to 3-4 times earlier. "You have to stop a little bit with the world in the current situation...

there are a lot of opportunities around the world, one has to be choosey now," he said. Elsewhere, the bank is looking to open branches in Gulf neighbours Bahrain, the United Arab Emirates, Qatar and Bahrain, while also looking for opportunities in Syria, Egypt and Lebanon. He reiterated CBK wanted to increase its stake in Syrian Islamic lender Cham Bank after saying in March it planned to raise it stake in the Damascus-based lender to 30 percent. Investment Dar's Executive Vice-President, Amr Abou El-Seoud, said in May the firm had received an offer from CBK to buy its stake in Cham. The Kuwaiti lender is also still in talks to buy 70 percent of Yemen Gulf Bank, Shatti said without giving further details. Like other Gulf lenders, CBK has been seeking to expand abroad to offset rising competition at home where foreign players such as HSBC and BNP Paribas have entered the fray. TOUGH PROFIT GOAL ? Shatti said the lender, which is mainly active in Kuwait competing with market leader National Bank of Kuwait, hoped to reach its 2008 goal of 20 percent net profit growth. "Life is tough, but we will try to make it," he said. In the first 10 months, CBK posted net profit of 118 million dinars ($436.9 million) in the first 10 months after 104.9 million dinars in the first nine months, he said. In the third quarter, the bank boosted net profit by 10 percent, shrugging off a dive on the local bourse and tougher consumer lending rules by the central bank to combat inflation. Despite the global credit turmoil, Shatti sees the Gulf as able to weather the storm. "The Gulf region still has a lot of financial resources... there is a lot of wealth in this part of the world. This wealth will be used." (Reporting by Ulf Laessing and Rania El Gamal; Editing by Alexander Smith and David Cowell) ($1=.2701 Kuwaiti Dinar) Keywords: FINANCIAL MIDEAST SUMMIT/CBK ([e-mail] ; [phone]; Reuters Messaging: [e-mail] ) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved.

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