- Profits Reflect KFH’s Solid Financial Position, Healthy Performance, and Successful Implementation of Plans
Kuwait Finance House (KFH) Chairman, Hamad Abdulmohsen Al-Marzouq said that KFH, by the Grace of Allah and His Blessing, has achieved net profit of KD 126.5 mln for the fiscal year 2014 compared to KD 115.9 mln for the year 2013, thus marking an increase by 9.1 % over last year. Net finance income increased to reach KD 363.4 mln for the year 2014 compared to KD 336.4 mln for the preceding year, thus marking an increase by 8%
Total deposits increased to reach KD14.3bln compared to 12.5 bln last year, thus marking an increase of KD 1.8 Bln or 14.4%. Finance portfolio increased to reach KD 8.1 Bln compared to KD 7.6 bln for the year 2013, i.e. an increase by 6.6%. Based on this increase, assets size has reached KD 17.2 Bln compared to KD 15.3 Bln for the year 2013, i.e. an increase by KD 1.9 bln or 12.4%.
Finance cost and distributions to depositors reached KD 282 mln compared to KD 235 mln for the year 2013, i.e. an increase by 20%. KFH distributions as follows: 2.337% for “Al-Khumasiya” investment deposit, 2.064% for “Al-Mustamera” continuous investment deposit, 1.681% for “Al-Sedra” investment deposit, 1.446% for Al-Dimah investment deposit (6 months) and 0.935 % for “Tawfeer” saving investment accounts.
Shareholders’ equity reached KD 1.74 bln, which marks an increase by KD 82.4 mln or 5% over last year.
The Board has recommended 15% as cash distributions to shareholders and 10% as bonus shares subject to general assembly and concerned authorities approval.
Furthermore, capital adequacy ratio reached 16.25% thus exceeding the minimum limit 12%. This achieved ratio confirms KFH strong financial position.
Al-Marzouq added that the growth KFH achieved across all its financial indicators in 2014 was in line with set plans and consistent with the growth and development of the market and banking sectors. The financial results have put KFH on track to achieve sustainable profitability, gain market share, and will allow the bank to maintain the leadership position locally and globally in the Islamic banking industry.
He said that the profits will support KFH in achieving its goals and aspirations in the upcoming period. It is worth noting that the bank enjoys several strong points that will be fortified in order to maintain stable growth, enhance quality and service excellence and improve business activities, while rationalizing expenditures in an attempt to highlight the positive points for KFH clients.
Al-Marzouq explained that despite the relatively favorable economic conditions, the latest developments on the crude oil prices cast a shadow over the upbeat outlook that dominated the markets 2014. This led KFH to be more prudent in order to face the changing economic circumstances locally and internationally. He indicated that KFH is pursuing a conservative policy by increasing precautionary provisions, bolstering the financial position, and diversifying revenues.
Moreover, Al-Marzouq stressed KFH’s readiness to comply with Basel III accords that have been recently approved by the Central Bank of Kuwait (CBK). He noted that KFH is able to fully comply with the regulations in line with the international standards, best international banking practices and Islamic banking guidelines. He underscored KFH’s adherence to Shari’a principles in all business fields.
KFH will continue its efforts to further consolidate its role in the local and regional markets, and increase its market share by adding new products and services. The bank will also utilize developing technologies that offer clients high-end services consistent with security standards, attention to detail and user-friendliness. This will be implemented in a manner aimed at boosting clients’ confidence in KFH, which enjoys a stellar reputation at all levels and in all markets.
Furthermore, Al-Marzouq affirmed KFH’s leading role in strengthening the national economy, most notably, through corporate financing as per the credit and legislative regulations. He went on to say that KFH is paying greater attention towards supporting the national economy and Kuwaiti companies in the coming period as they are a priority for the bank. In addition, studies are being held to find ways to expand financing for small and medium enterprises in cooperation with respective authorities.
He indicated that KFH is continuing its overseas expansion in markets where it has already established a strong economic presence. These markets are performing well and can be used as a platform for future expansion in other markets. He emphasized the importance of the GCC and Middle East markets as they represent strategic ties to Kuwait socially and economically.
Al-Marzouq explained that KFH succeeded in launching new banking products in 2014 such as the investment deposits that are the best in market in terms of investment ratios, tenure, profit rates and flexible distributions. In addition, KFH offers clients innovative financial solutions that reinforce the culture of long-term planning and assists in saving for education, marriage, youths’ projects and retirement. KFH has also issued banking cards with distinctive privileges.
KFH was active in the sukuk market where it contributed in arranging and syndicating the issuance of several sukuk deals totaling around USD 1 bln in the GCC, Asia, Africa, and Europe. KFH also organized several promotional and marketing campaigns that were targeted towards revitalizing the market for financing commodity purchases by clients. KFH and its subsidiaries won nearly 20 prestigious awards from high-profile international institutions. It also succeeded in maintaining the positive credit rating from the leading international credit rating agencies.
Al-Marzouq further affirmed that the achieved results are the fruits of consolidated efforts of KFH’s high-caliber human capital and effective working teams. This is considered to be the main pillar for many achievements and milestones at all levels. He extended his thanks to all KFH’s investors and clients for their support and advocacy that reflects their strong confidence in the bank’s businesses and activities throughout the year.