Kuwait, October 19, 2006: Gulf Bank, Kuwait's second largest commercial bank, has reported a record net profit of USD263 million (KD76.1 million) for the first nine months of 2006, an increase of 25% over the corresponding period last year. Operating income rose by 28% while total assets grew by 50% to USD12.3 billion (KD3.57 billion).

"The record earnings and profit tell an extraordinary story of growth and success for Gulf Bank," said Mr. Bassam Y. Alghanim, Gulf Bank's Chairman & Managing Director. "Gulf Bank is a key strategic player in Kuwait's banking sector. With our disciplined strategy for sustained growth across our Retail, Corporate, International and Treasury groups, Gulf Bank has been able to take full advantage of the region's buoyant economic conditions. We are one of the fastest growing banks in the region and Gulf Bank's return on equity improved by 12% to 30.9% while return on assets remained strong at 3.30%. These ratios are exceptionally high by international banking standards."

The Bank's success is clearly a reflection of Kuwait's continuing prosperity and we are investing heavily in the development of Kuwaiti talent. Our localization rates are among the highest of any company in the region and we are proud of this achievement.

Earnings per share grew to 28.4 cents (82 fils), an increase of 24% over the first nine months of 2005. Gulf Bank has delivered an outstanding return on its shareholders 'investment'. Mr. Alghanim said."While driving strong earnings growth in both retail and corporate banking, we have been able to maintain an industry-leading cost-to-income ratio and our operating efficiency remains one of the Bank's fundamental strategic strengths."