CBK considers liquidation of subsidiary
Reports are emerging of the liquidation of the investment unit of the Commercial bank of Kuwait (CBK). A bourse filing also carried a similar message saying that plans are being made. The bank’s side of the story wasn’t acquired due to their unavailability to comment on the issue.
However, a released statement by the bank has earlier on given an insight of such a possibility although it was short of information to allow a concrete and clear vision of what they were preparing. In that statement, it was stated that the closure of CBK Capital, a fully-owned subsidiary which manages the bank’s proprietary investment portfolio, would not have a negative impact on the bank’s financial position.
A well placed source who is aware of the company’s finances said CBK Capital had around KD15m ($53.5m) in capital. He added that the closure of the bank has been on the table for almost four years because the major shareholder of the CBK Capital “did not think it was in his interests to keep it.” According to the source, the subsidiary has undergone a restructuring and has been reducing its activities for several years. CBK Capital managed Kuwaiti stocks fund and an Islamic finance fund.
According to the bank’s annual report, provisions were taken against investments in the portfolio in 2011.
In the 2011 cash flow statement, a total of KD117,13 million was spent on the acquisition of investment securities by the bank last year and earnings from the disposal investment securities equaled KD57,3 million. Its dividend income from investment securities was KD3.2m.
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