Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al-Marzouq said that KFH has, by the grace of Allah, reported net profit attributable to the shareholders of the bank of KD 148.40 million for the year ended 2020; a decrease of 40.9% compared to last year.
Net financing income for the year ended 2020 reached KD 614.22 million; an increase of 15.8% compared to last year.
Total operating expenses for the year ended 2020 reached KD 296.04 million; a decrease of 2.7% compared to last year.
Due to the negative economic outlook resulted from the Corona virus pandemic, investment income for the year decreased by 105% compared to last year. Consequently, net operating income decreased to KD 499.56 million for the year ended 2020; a decrease of 2.1% compared to last year.
Cost to income ratio improved to reach 37.2% for the year ended 2020, compared to 37.4% for last year.
Also, earnings per share for the year ended 2020 reached 19.52 fils; a decrease of 41.1% compared to last year.
KFH distributions to investors for the year 2020 were as follows: 1.700 % for “Al-Khumasiya” investment deposit, 1.450% for “Al-Mustamera” investment deposit, 1.100% for “Al-Sedra” investment deposit, 1.275% for the 12-month Dimah investment deposit, 1.150% for the 6-month Dimah investment deposit, 1.225% for long term investment plans and 0.200% for saving investment account.
The Board of Directors has proposed 10% cash dividends to shareholders and 10% bonus shares subject to general assembly and concerned authorities’ approval.
Shareholders’ equity reached KD 1.936 billion at the end of year 2020.
Total assets increased to reach KD 21.502 billion, i.e., an increase of KD 2.111 billion or 10.9% compared to the end of last year.
Financing portfolio reached KD 10.748 billion, i.e., an increase of KD 1.274 billion or 13.4% compared to end of last year.
Investment in Sukuk reached KD 2.742 billion; an increase of KD 450 million i.e., a growth of 19.6 % compared to end of last year.
Depositors’ accounts reached KD 15.317 billion i.e., an increase of KD 1.765 billion or 13.0% compared to the end of last year.
In addition, the capital adequacy ratio reached 17.53% which is above the minimum required limit. This percentage confirms the solid financial position of KFH.
Positive financial indicators
Al Marzouq added in a press release that despite the negative economic consequences of Coronavirus pandemic, the recent financial results confirm the successful strategy of KFH, its solid financial position, high creditworthiness and efficient capability to handle the exceptional conditions.
He said that profit rates fell in 2020 because of the challenging operating environment as a result of the pandemic, and the additional precautionary provisions taken by KFH in the face of Coronavirus pandemic and to maintain good level of asset quality and strong capital base.
Al-Marzouq affirmed the KFH`s prudent approach to risk management and its healthy financial indicators are reflected in the growth in net financing income, financing portfolio, total assets and depositors accounts. This demonstrates the balanced and solid performance of KFH group.
“Along with supporting small and medium enterprises, financing mega projects in different vital sectors and contributing to the development plans and projects in Kuwait and the region, KFH continues its leading national role towards the economy and society as part of its sustainable development strategy.” Al Marzouq said.
He noted that KFH led the arrangement and marketing of the KD 400 million Islamic tranche in a mega KD 1 billion syndicated credit facility for KPC, in cooperation with Kuwaiti banks, where KFH contributed KD 304 million in financing.
Al-Marzouq stressed that KFH succeeded in arranging several Sukuk issuances for many local and international banks as well as governments, noting that KFH Group led USD 500 mn Sukuk for First Abu Dhabi Bank, KD 150 mn Sukuk to Warba bank, the first Kuwaiti Dinar- denominated Sukuk issuance. In addition, KFH was involved in arranging deals including USD 750 mn Sukuk for Boubyan, USD 500 mn Sukuk for Bahrain Mumtalakat Holding Company ("Mumtalakat"), USD one billion Sukuk for Dubai Islamic Bank, USD 500 mn Sukuk for Sharjah Islamic Bank and USD 50 mn Sukuk for (KFH-Turkey).
“As part of its national and societal commitment, KFH was the largest contributor to the KD 10 million fund to support the government`s efforts to combat Coronavirus impacts. In addition, the bank made an additional contribution to the fund that has been placed at the disposal of the Council of Ministers.” Al-Marzouq added.
140 million digital transactions
Al-Marzouq stressed that the efficiency of KFH`s digital services as transactions completed by its customers through KFHonline on the website or the mobile app exceeded 140 million in 2020. This emphasizes the successful digital transformation strategy of KFH and its keenness to provide innovative banking solutions via mobile and alternative channels to enable customers to complete their transactions around the clock, from anywhere, easily and safely.
Top employer of Kuwaitis
Al-Marzouq expressed his pride at KFH having the largest number of Kuwaiti employees in the local private sector, adding that Kuwaiti nationals made up 99% of the new hires in 2020. This reflects KFH`s interest in attracting national talents and raising the Kuwaitization ratio.
Al Marzouq said that KFH won prestigious awards from international magazines and institutions such as the World's Best Islamic Financial Institution 2020 and the Safest Islamic Bank in GCC-2020 awards from Global Finance Magazine. Also, KFH won “Bank of the Year Kuwait” Award from the Banker Magazine, “Best Bank in Kuwait” award from Euromoney and many other global awards that crowned its excellence on various levels and according to precise criteria.
Gratitude and Appreciation
Al-Marzouq thanked shareholders and customers for their trust and support and also thanked the regulatory authorities, praising the efforts of the executive management and employees for their performance despite the circumstances.
He confirmed that KFH keeps focusing on its core banking activity, improving the quality of assets and developing the human resources, to ensure the sustainable growth of KFH`s financial indicators. It also offers the latest digital services to enhance the customer's banking experience.
He expressed his hope that global economies and businesses would recover this year, and credit growth would improve with the acceleration of vaccine rollout around the world.