Group Chief Executive Officer at Kuwait Finance House(KFH), Mazin Saad Al-Nahedh, emphasized that KFH-Turkey enjoys robust financial position and very strong liquidity ratios as per the regulatory authority’s requirements in Turkey and Kuwait, not to mention as per the international standard Basel III.
Al-Nahedh added in a press release that the liquidity coverage ratio (LCR) at KFH-Turkey reached 323% according to the CBK regulations as of Q2 2019. This is in comparison with the minimum requirement of 100% compared to the average ratio of Turkish banks of 179%.
He pointed out that the capital adequacy ratio (CAR) of KFH-Turkey exceeds the authorities’ requirements, indicating it reached 20.27% in Q2, 2019 compared to the average ratio of Turkish banks of 17.7%.
Al-Nahedh explained that KFH-Turkey managed to build high quality assets thanks to the huge financing opportunities in Turkey, the diversified financing portfolio of KFH-Turkey and the size of the bank as the largest Islamic bank in the country. This reflected positively on the stability of the financing portfolio and its balance against the fluctuations of Turkish Lira value. This also helped in building strong buffers against any potential negative implications.
He illustrated that KFH-Turkey is the second lowest bank in terms of non- performing financings for its financing portfolio compared to 18 local banks, praising the high coverage ratios of the NPF valued at 128% compared to the average ratios of Turkish banks valued at 68%.
Al-Nahedh added that the ratio of financing to deposit in KFH-Turkey reached only 72% as of Q2 2019 compared to the average ratio of Turkish banks valued at 117%.
He continued: “All financial indicators of KFH- Turkey are far higher than the requirements of the regulatory authorities, indicating despite the drop in the Turkish Lira value, the bank is achieving sustained and solid growth ratios. The growth ratios cover all financial areas including financing portfolio, deposits, total assets as well as the profits.”
Al-Nahedh mentioned that KFH-Turkey reported net profits of TL 601 million, an increase of 25% for H1, 2019 as per the regulatory and accounting guidelines in Turkey. The assets size increased to reach TL 87 billion as of H1 2019.
He reiterated that KFH aligns its Group banking businesses with prudent polices and scenarios capable of dealing with any potential negative repercussions.