Commercial Bank of Kuwait Board Quits Over ‘Strategy’

Six board members of the Commercial Bank of Kuwait SAK resigned today, acting Chief Executive Officer Elham Mahfouz said.

“The board members resigned over how to implement the bank’s strategy,” Mahfouz said in a phone interview today from Kuwait City, without providing more details on the strategy. The board members will remain in their posts until elections are held at the next shareholders’ meeting, Mahfouz said.

Commercial Bank posted a 65 percent drop in third-quarter profit last year to 6.8 million dinars ($24.3 million), according to data compiled by Bloomberg. The bank has been embroiled in a legal dispute with Investment Dar Co. over the ownership of shares in Boubyan Bank KSC, an Islamic lender controlled by National Bank of Kuwait SAK.

Commercial Bank said in May 2009 it owned 19.2 percent of Boubyan Bank. Investment Dar, the owner of half of carmaker Aston Martin, lost a buyback option on the stake, which it sold for 94.1 million dinars in December 2008. Commercial Bank subsequently agreed to sell its stake in Boubyan Bank to National Bank of Kuwait for about 121 million dinars.

Investment Dar said in June 2009 it filed three lawsuits against Commercial Bank demanding the return of the shares.

Commercial Bank shares lost 2.5 percent this year after declining 14 percent last year.

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