UPDATE 1-Kuwait's Gulf Bank swings to Q4, yearly profit

Wed Feb 2, 2011 6:43am EST

* 2010 profit 19.06 mln dinars vs 28.07 mln dinars '09 loss

* Shares end 1.8 percent lower on Wednesday

(Adds details, background)

KUWAIT, Feb 2 (Reuters) - Kuwait's Gulf Bank (GBKK.KW), which was rescued by the Kuwaiti central bank two years ago during the financial crisis, swung to fourth quarter and full year profit, it said on Wednesday.

Gulf Bank had net profit of 8.66 million dinars in the fourth quarter, according to Reuters calculations, reversing a net loss of 21.05 million dinars in the prior-year period.

The bank earned 2010 net profit of 19.06 million dinars against a net loss of 28.07 million dinars in 2009, according to a statement to the bourse on Wednesday.

Reuters calculated quarterly profit from previous financial statements. Gulf Bank made a profit of 10.4 million dinars in the nine months to Sept 30.

The global financial crisis hit the Kuwaiti banking sector hard as significant losses on investment portfolios became apparent and lending conditions tightened.

In 2008, Gulf Bank was rescued by the central bank after derivatives losses and the sovereign wealth fund, Kuwait Investment Authority, owns a 16-percent stake. Its troubles prompted the government to guarantee all deposits in local banks to restore confidence.

Shares in Gulf Bank ended 1.8 percent lower on Wednesday, bringing losses for the year so far to 3.5 percent.

(Reporting by Kuwait newsroom; Writing by Rachna Uppal; Editing by Amran Abocar)