middle-eastern-banks-sound-despite-gulf-bank-bailout

Middle Eastern banks sound despite Gulf Bank bailout

The bailout of Gulf Bank by the Kuwaiti government is not grounds for investor worry in the Middle East, says analyst.

Edward Russell

October 29, 2008

KuwaitÆs Gulf Bank has achieved the questionable honour of being the first Middle Eastern bank to require a government bailout. Stepping in after the bank incurred significant losses from currency derivatives trading, KuwaitÆs central bank bailed out Gulf Bank for an unspecified amount and proceeded to back all deposits held by domestic banks.

The losses prompted the resignation yesterday of Gulf BankÆs chairman, Bassam al-Ghanem, as well as one other board member, according to several media reports in the region. The bank has reportedly appointed Ghanem's brother Qutaiba al-Ghanem to take over as chairman. The Ghanems are the bankÆs largest shareholders.

While details of the central bankÆs bailout were not available, central bank governor Skeikh...

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