Group Chief Executive Officer at Kuwait Finance House (KFH), Mazin Saad Al-Nahedh said the sources of profits until end of Q3-2018 are mainly the revenue items of the core banking business. Net Financing income until end of Q3 2018 reached KD 404.82million i.e. a growth of 25.4% or KD81.9M compared to the same period last year. Total operating income reached KD 589.61 million, i.e. a growth of 12.3% compared to the same period last year and net operating income reached KD 367.47million, i.e. a growth of 17.9% compared to the same period last year.
Al-Nahedh added during TV interviews, that the cost to income ratio (C/I) has decreased to 37.7% compared to 40.6% for the same period last year, indicating this confirms the success of KFH strategy in cost optimization. KFH is working to drop the (C/I) to below 35%.
He illustrated that after excluding the effect of the decline in the Turkish currency rate consolidated balances, the total assets of the Group increased by 4.3%. The financing portfolio increased by 6.8%, and depositors’ accounts increased by 4.4% compared to year ended 31 December 2017.
He continued: “due to fluctuations in currency prices, there has been an extraordinary trading of the Turkish currency against the dollar and other foreign currencies in selling and buying, especially in the period of high volatility in currency prices, which contributed to the growth of profits of KFH- Turkey. These operations resulted in a profit of which KFH's share is KD 11.4 million.
As for the contribution of KFH subsidiaries in the profits, Al-Nahedh explained that their contribution in the net operating income until end Q3 2018 amounted to about 40.8 percent. KFH-Turkey’s contribution in the net operating income was 35 percent compared to 31.6 percent in H1 this year. Despite the decline in TL value, KFH-Turkey’s contributions to the Group profits was higher than the pre currency volatility period.
Al-Nahedh pointed out that KFH exited non-core assets of KD46.9M until end of Q3 2018, which resulted in only KD6.2M profits compared KD43.2M profits in the same period last year. He said that KFH is continuing its plan on exiting non-core assets of KD140-150M during the year 2018. Some exiting deals might not be closed during Q4 so will be during 2019.
Al-Nahedh indicated that the total provisions for Group as of end Q3 2018 reached KD 706.1 million. The non-performing facilities for the Group remained constant at 2.84 percent in accordance with the CBK’s accounting principles. The total debt coverage is 379 percent and 273 percent for KFH solo and the Group respectively.
Al-Nahedh expected a double-digit profits for the Kuwaiti banking sector in general during the fourth quarter of 2018 at the same rate of growth during the first nine months of this year.
Al-Nahedh said: “with regards to KFH-AUB merger deal, KFH disclosed the latest developments in this regard."
KFH reported a KD 169.10million net profit to shareholders until end of Q3 2018 compared to KD 137.87million for the same period last year i.e. an increase of 22.7%.
Earnings per share reached 27.04 fils, compared to 22.06 fils for the same period last year i.e. an increase of 22.6%.