Gulf Bank Continues to Negotiate With Central Bank on Rescue

By Fiona MacDonald

Nov. 2 (Bloomberg) -- Kuwait's Gulf Bank K.S.C. is still in talks with the central bank over its rescue after the emirate's second-largest lender by assets was hit by losses on currency derivatives.

``We are still in negotiations to find the best method of dealing with the current situation,'' Fawzy al-Thunayan, general manager for board affairs of Gulf Bank, said in a telephone interview today from Kuwait City.

Kuwait Central Bank Governor Sheikh Salem AbdulAziz al- Sabah said Oct. 26 that Gulf Bank suffered losses from currency derivatives trading after a decline in the value of the euro versus the dollar. The threat of default prompted the governor to offer protection to Gulf Bank's depositors.

Gulf Bank Chairman Kutayba al-Ghanim said Oct. 28 that the bank has ``paid some'' of the losses to ``international markets'' and will release a final figure when payments have been completed.

To contact the reporter on this story: Fiona MacDonald in Kuwait FmacDonald4@bloomberg.net