In an interview with CNBC Arabiya
80% of Bank’s Total Operating Revenues Come from Core Banking Businesses
“The 16.5% growth in KFH’s net profit for the 9 months period ending September 2016 over the same period last year reiterates KFH’s successful policy of focusing on the core banking business. Over 80% of the bank’s total operating revenues came from core banking businesses,” said Group Chief Strategy Officer at KFH Fahad Khaled Al-Mukhaizeem.
Speaking to CNBC Arabiya, he added “44% of the net profit and 49% of revenues came from KFH’s businesses outside Kuwait i.e. the Group subsidiaries. This affirms KFH’s policy in diversifying revenues, which contributes to the growth sustainability at KFH.”
He said that when managing Group banks’ balance sheets, KFH takes into consideration the markets’ volatility, including currency fluctuations, noting that KFH has a long term outlook of its operations in Turkey. KFH continues its expansion plans via KT Bank AG in Germany. KT Bank AG serves the Turkish and Muslim communities in Germany. It has opened the fourth branch in Cologne within the framework of its expansion strategy and efforts in penetrating the Euro market.
He indicated that many factors led KFH to enter the German market, primarily the potential growth, and the excellent operational environment, not to mention the appropriate regulatory and legal framework that permits the operation of Islamic banking.
He further noted that end half1, the Board of Directors at KFH agreed to sell its stake in Aref Investment Group. The bank is receiving many offers, yet it sees the best offers that meets the interest of KFH.
KFH set aside provisions worth KD 752 million, indicating KFH’s non-performing financing in Kuwait have dropped to 1.8%, while in the Group as a whole, they fell below the threshold of 3%, Al-Mukhaizeem said.
He explained that the government expenditure on the oil, non-oil and infrastructure projects is the key driver for growth in the credit markets in 2016 despite the falling oil prices. He indicated that KFH has participated in financing many government projects.
Also, Al-Mukhaizeem stressed the instrumental role of KFH in supporting the youth and financing the SMEs, indicating the excellent coordination between KFH and the National Fund for Small and Medium Enterprises.