Kuwait Finance House (KFH) CEO Mohammed Al-Omar asserted that there is no significant impact as a result of the sentence handed down by the Court of Cassation regarding fees for registering unused land as private residence, since the impact on earnings per share is less than 1 fils. He added that KFH had allocated provisions since the preliminary court sentence in the beginning of June 2012 worth KD 4.3 million.
Al-Omar stressed during an interview with CNBC Arabia that was broadcasted yesterday, that KFH is committed to abiding by the law without any hesitation. However, he said that pieces of land that have been developed during that period are not subject to the court sentence, which prompted many clients to develop their unused land through personal financing or other financing tools that include Ijarah, before renting those pieces of land. He revealed that KFH is closely monitoring such exceptional cases that were exempted by the law.
Moreover, Al-Omar noted that the court has not deprived KFH or other Islamic banks of their right to acquire, sell, or mortgage real estate; but granted them that right through a previous court sentence, which allows KFH to continue to finance clients through various financing products. He stressed that contracts signed with clients clearly state the commitments of each party, which cements KFH’s key role in the local real estate market; especially that this role is related to the national economy that KFH has been keen to support during the past 35 years.
Furthermore, Al-Omar mentioned that the subscription in the increase in KFH’s capital by 20% commenced on Wednesday and continues until June 19th. He added that this process serves to pave the way for expansion plans in Saudi Arabia, Malaysia, and Turkey. He went on to say that KFH owns two companies in Saudi Arabia that operate in financing real estate and investments. He added that those companies seek to take advantage of the high expenditure on infrastructure in Saudi Arabia, and underline their presence in this vital sector.
Al-Omar said that KFH continues to make good achievements, where earning per share in Q1 of 2013 increased by 16% to reach 8.1 fils after the remarkable results accomplished in 2012. He explained that such results are the fruits of the restructuring program that is part of KFH’s development strategy.