PREVIEW-Kuwaiti bank profits to rebound after Q4 losses

* Profits seen falling year on year

* Expects to rebound from Q4 losses

By Ulf Laessing

KUWAIT, April 12 (Reuters) - First-quarter profits at Kuwaiti banks are expected to decline year on year, but improve from losses in the prior three months even as a global recession hits, analysts said.

Shares in the OPEC producer's banks have risen since it approved a $5 billion stimulus aimed at helping the financial sector, mainly by giving state guarantees for new loans. It also allows the state to buy into banks unable to raise fresh funds. [ID:nLQ655621]

Analysts said the worst appeared to be over for now at Kuwaiti banks after several major players, such as Kuwait Finance House (KFIN.KW: Quote, Profile, Research) (KFH) and Commercial Bank of Kuwait (CBKK.KW: Quote, Profile, Research) (CBK), plunged into the red in the fourth quarter after taking provisions.

Banks' first-quarter profits would fall on average 30-35 percent from the year ago period, but that might still boost shares, said Naser al-Nafisi, general manager at the al-Joman Center for Economic Consultancy.

"The situation has improved compared to the fourth quarter, provided there are no more provisions we don't know about," he said. "Despite a profit fall the shares, which have fallen 50 percent in some cases, might benefit." Gulf Bank (GBKK.KW: Quote, Profile, Research) has already said it is expecting to post a profit in the first quarter, after diving deep into the red in the fourth quarter due to losses with derivatives. [ID:nLB15843]

Under a revamp ordered by the central bank the lender secured fresh funds from shareholders and the state's sovereign wealth fund.