National Bank of Kuwait (NBK) posted $150.2 million of profits in the first quarter, up from $108 million in the same period last year, the bank said in a statement on Saturday.

Return on equity rose to 32%, up on last year's 26%, while return on assets increased from last year's 2.2% to 3.3% in the first three months this year.

"NBK's fundamental strengths made us well-positioned to take full advantage of a favourable environment and rising interest rates," said CEO Ibrahim Dabdub.

"The remarkable increase in net profit during the first quarter can also be attributed to the diversification of our income sources, which has been one of the key factors behind our consistent solid performance," he added.

NBK achieved record net profits of $510 million in 2004.

"All lines of business did well, both domestically and overseas. We achieved improved margins, higher fee income and strategically focused growth across our business activities," Dabdub said.

The bank's assets at the end of last year stood at $19 billion and its shareholder equity at $1.9 billion, the statement said.

Founded by Kuwait's leading merchant families in 1952 as the Gulf state's first commercial bank, NBK has one of the largest international networks among Arab banks.