Financial Statements 2003 - National Bank of Kuwait

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Notes to the Consolidated Financial Statements31 December 20036 Investment securities2003 2002KD 000’s KD 000’sHeld for trading 47,369 -Held to maturity 35,936 53,564Available for sale 634,489 652,828717,794 706,3927 Kuwait government debt bondsThe Central Bank of Kuwait purchased resident Kuwaiti and GCC customers’ debts existing at 1 August 1990, inaddition to related interest up to 31 December 1991, on behalf of the Government of Kuwait in accordance withDecree 32/92 and Law 41/93, as amended, in respect of the purchase by the Government of such debts and theprocedure for their collection.The purchase value of these debts was determined in accordance with the Decree and has been settled by the issue ofbonds, with a value date of 31 December 1991 and maturing over a maximum period of twenty years from the date ofissuance. During 2003 there was a net redemption of KD 31 million (2002: KD 44 million). Interest is at a rate fixedsemi-annually by the Central Bank of Kuwait, and is payable semi-annually in arrears.The average rate of interest paid bythe Central Bank of Kuwait for 2003 was 1.89% (2002: 2.67 percent).Under the terms of the purchase agreement with the Central Bank of Kuwait, the amount of the bonds will beadjusted in respect of any difference arising, once the balances of the related debts have been agreed with thecustomers concerned.The group, therefore, has a contingent liability in this regard.8 Other assets2003 2002KD 000’s KD 000’sInterest receivable 42,340 33,133Sundry debtors and prepayments 5,550 4,959Other 7,686 29,16555,576 67,2579 Certificates of deposit issuedThe certificates of deposit outstanding at the balance sheet date amounted to KD 220 million (2002: KD 84.5 million).These certificates of deposit bear interest payable at maturity at rates ranging from 2.375% to 2.5% per annum (2002:2.375% to 2.875% per annum). All certificates of deposit issued and outstanding are maturing within periods up to 4months from the balance sheet date.10 Floating rate bonds issuedOn 19 February 2002, the bank issued floating rate bonds with a principal amount of US$ 450 million at an issue priceof 100%.The bonds bear interest at the rate of 0.25% per annum above the London inter-bank offered rate for threemonth US dollar deposits, payable quarterly in arrears.The bonds are in bearer form in denomination ofUS$ 100,000 and are redeemable at par on or before 19 February 2005.40
Main HeadingMain heading sub copy11 Other liabilities2003 2002KD 000’s KD 000’sInterest payable 30,485 24,269Interest received in advance 9,526 12,415Other 79,843 62,746119,854 99,43012 Proposed dividendThe board of directors recommended distribution of a cash dividend of 50 fils per share (2002: 65 fils per share) andbonus shares of 5% (2002: nil) on outstanding shares as at 31 December 2003.The proposed dividend, if approved, shallbe payable to the shareholders registered in the bank’s records as of the date of the general assembly meeting.13 ReservesThe balance on the share premium account is not available for distribution.In accordance with the Law of Commercial Companies and the Bank’s Articles of Association, the Bank has resolved todiscontinue the annual transfer of 10% of the profit for the year since the statutory reserve would exceed 50% of thecurrent paid up share capital.Distribution of this reserve is limited to the amount required to enable payment of a dividend of 5% of share capital inyears when accumulated profits are not sufficient for the payment of a dividend of that amount.The general reserve was created in accordance with the Bank’s Articles of Association and is freely distributable.The cumulative changes in fair values reserve is analysed as follows:Cash flow Available forhedges sale portfolio TotalKD 000’s KD 000’s KD 000’sBalance at 31 December 2002 (513) (2,066) (2,579)Net unrealised gains (losses) 222 17,100 17,322Net realised gains - (1,323) (1,323)Balance at 31 December 2003 (291) 13,711 13,420Balance at 31 December 2001 (677) 4,891 4,214Net unrealised gains (losses) 164 (4,982) (4,818)Net realised gains - (1,975) (1,975)Balance at 31 December 2002 (513) (2,066) (2,579)41
Page 5: Consolidated Balance Sheet31 Decemb
Page 10 and 11: Notes to the Consolidated Financial
Page 28 and 29: Group DirectoryHead OfficePO Box 95
Page 30: International NetworkUnited Kingdom

Financial Statements 2003 - National Bank of Kuwait

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