KUWAIT CITY, Oct 28: The chairman of Gulf Bank, Kuwait’s second biggest lender, resigned on Tuesday after the finance house suffered losses from derivatives deals, in the first such case in the oil-rich Gulf region.

The news emerged as the Kuwaiti government approved a bill to guarantee deposits in local banks, amid continued investor jitters about the emirate’s financial system which have sent stocks plunging.

“The board of directors held an emergency meeting on Tuesday during which it accepted the resignation of Bassam al-Ghanem as chairman and board member,” the official KUNA news agency said, quoting a statement.

Gulf Bank appointed Ghanem’s brother Qutaiba al-Ghanem as the new chairman and also accepted the resignation of board member Abdulkareem al-Saeed.

The new chairman immediately announced the bank has abolished all trades in “derivatives and options,” and said the main shareholders are prepared to inject any amount of liquidity needed by the bank.

“We have more liquidity than we need. The bank plans to continue working as normal,” Ghanem told a crowded news conference at the bank’s headquarters.

He said the bank has paid part of the losses to the international market, but declined to provide any figures.

Tuesday’s moves came after the central bank of Kuwait said on Sunday that Gulf Bank had incurred unspecified losses in derivatives deals on behalf of some clients who defaulted.

—AFP