Kuwait, September 6, 2006: Leading international rating agency Standard & Poor has maintained Gulf Bank's long term credit rating at 'A-' with a 'stable' outlook. The Bank's short term credit rating has also been maintained at 'A-2'.

Gulf Bank's Chairman & Managing Director, Mr. Bassam Y. Alghanim, said, "The Standard & Poor rating report is very favorable and reflects the success of our business strategy. The report highlights Gulf Bank's strong financial performance, solid market position, superior asset quality and consistent strategy.

"I would like to stress that the report took into account our performance for the first quarter of 2006. Since then, Gulf Bank has strengthened its position even further, achieving a record net profit for the first half of 2006 and our highest ever quarterly trading profit."

Among key sections of the rating report, Standard & Poor commented, "The Bank's market position and financial performance have steadily and rapidly improved over the past five years. Profitability is among the highest in the region. The Bank's ROA (return on assets) stood at a high annualized 3.54% for the first three months of 2006, as a result of high margins, enhanced trading income, increased fee earnings and one of the lowest cost-to-income ratios among Gulf banks (18% for the same period)."

"Gulf Bank is the second largest commercial bank in Kuwait. The Bank has been aggressively developing its retail banking activities over the past five years and this effort is now bearing fruit. Gulf Bank's market share in retail banking is about 15%. As such, Gulf Bank is considered systemically important to the Kuwaiti financial industry."

"Gulf Bank has followed a consistent and aggressive strategy. In each of its three main businesses ' retail, corporate and international ' the Bank has ambitious plans to grow its customer base, gain market share and enhance customer service."

"In retail banking, Gulf Bank stands to add customers via a naturally growing market, branch network expansion, product innovation and enhanced customer service standards."

Standard & Poor also noted that Gulf Bank's corporate banking unit has also been able to attract new clients, providing them with the full range of banking solutions. "Gulf Bank has differentiated itself from many of its competitors by establishing a dedicated small and midsize enterprise SME division as part of its corporate banking business,"the report stated.

"Gulf Bank's treasury activities and international banking operations have been strengthened and tend to contribute more to operating revenues. Gulf Bank is one of the most active domestic banks in this field."

"Gulf Bank?s asset quality has stabilized at strong levels. Collateralization and provision coverage is high and consistently improving. Internally, minimum coverage collateral rules are strict. Gulf Bank's capital base is strong, given its risk profile.

"Gulf Bank's investment portfolio is liquid and of high quality. The equity portfolio being small, Gulf Bank is not expected to materially suffer from the stock market correction that affected Gulf countries in the first half of 2006."

"The stable outlook reflects our opinion that Gulf Bank will continue to enjoy a strong financial profile, good asset quality and at least satisfactory capitalization in the medium term," the report concluded.

Standard & Poor 'A-' rating means Gulf Bank maintains its position as one of the highest rated banks in the region with an 'A' rating from Capital Intelligence, an 'A-' rating from Fitch and an 'A2' with a positive outlook from Moody's Investors Services.