Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al-Marzouq said that KFH has, by the grace of Allah, reported net profits of KD 190.5 million for the nine months ended 30 September 2019 for KFH shareholders compared to KD 169.1 million for the same period last year i.e. an increase of 12.7%.
Total Financing income increased for the nine months ended 30 September 2019 to reach KD 701.2 million an increase of 10.2%.
Total operating income for the nine months ended 30 September 2019 reached KD 615.2 million an increase of 4.3%; and net operating income reached KD 393.0 million i.e. a growth of 7.0% compared to the same period last year.
Cost to income ratio dropped to reach 36.1% for the nine months ended 30 September 2019, compared to 37.7% for the same period last year.
Earnings per share for the nine months ended 30 September 2019 reached 27.67 fils, compared to 24.58 fils for the same period last year i.e. an increase of 12.6%.
Total assets increased by 6.9% compared to the end of last year to reach KD 18.999 billion at the end of Q3 this year.
Finance receivables reached KD 9.356 billion i.e. an increase of KD 167.7 million i.e. a growth 1.8% compared to end of last year.
Investment in Sukuk reached KD 2.132 billion an increase of KD 568.6 million i.e. a growth of 36.4% compared to end of last year and the majority of the balance represents investments in Sovereign Sukuk.
Depositors’ accounts reached KD 13.248 billion i.e. an increase of KD 1.467 billion or 12.5% compared to the end of last year.
Al-Marzouq said in a press release that the double-digit growth in net profits and the bank’s positive financial indicators are results of the successful growth sustainability strategy of focusing on core banking activities and exiting non-strategic investments to improve asset quality.
He pointed out that KFH succeeded in raising total assets value, maintaining the highest possible quality standards and diversity to limit risk and ensuring inflows to enhance liquidity. This was reflected in the ongoing increases in net income, backed by the increased operating income. All of the previous factors had a positive impact on net profit and the compound annual growth rate (CAGR) which has lately been showing steady growth.
Al-Marzouq added that KFH seeks to enhance the return on shareholders` equity (ROE) and depositors` accounts, while reaching the highest level of innovation and distinction in customer service. This is to be in line with the bank’s vision of leading international developments in Islamic financial services.
Digital Transformation Strategy
Al-Marzouq drew attention to the success of the digital transformation strategy in the Group, pointing to a qualitative move in rolling out digital financial solutions, such as the self-service banking services and the AI-enabled robotics. KFH also succeeded in enhancing security and data analyses, upgrading the infrastructure and e-service platforms in order to improve customer experience in accordance with the highest world standards.
He added that KFH aims to expand its operations in the Middle East and Europe through the services of the “digital bank” in Turkey and the “Jazeel” platform in Bahrain, plus modern, sophisticated and highly efficient online services.
He stressed the ongoing KFH policy of investing in technology and adopting the latest financial technology tool “FinTech”, along with strengthening the innovation environment which has become a strategic factor in confronting the challenges of digitalization and adapting to fast-paced and competitive environment in the banking sector.
Al-Marzouq noted that KFH is on track of promoting synergy among the Group's banks in Turkey, Malaysia, Bahrain and Germany which continued their outstanding performance in line with the strategies aimed to utilize the strength of the markets they operate in.
He went on to stress that KFH-Turkey enjoys a strong financial position with a very high liquidity levels as stipulated by Turkish and Kuwaiti regulatory requirements as well as Basel III standards. In addition, Al-Marzouq pointed out that KFH-Turkey Capital Adequacy ratio and all financial indicators exceed by far the rates required by the regulatory bodies.
He credited that to the breadth of funding activities in Turkey, the diversity of KFH-Turkey portfolio, the high-quality assets and its size as the largest Islamic bank in the country.
Development Plan and Kuwait Vision 2035
Emphasizing the role of the private sector in the Kuwaiti economy, Al-Marzouq pointed out the leading role of KFH in supporting the local economy, financing mega projects and supporting the National Development Plan. This is particularly part of Kuwait Vision 2035 to transform the country into a regional and global financial and commercial hub.
He said that “KFH has successfully financed a large number of projects in various vital sectors, including energy, water, power, infrastructure and construction. It has a regional and global leading role in Sukuk issuances for local and international companies and governments. “
Meanwhile, he stressed the need to diversify sources of income and not to rely on oil as the only source of public finances.
Entrepreneurs and SMEs
Having a proven track record in supporting Small and Medium enterprises SMEs, Al-Marzouq praised KFH's efforts to encourage the entrepreneurs and youth so that they can be materialized in the interest of society and economy. He added that KFH has established a department dedicated to finance such enterprises.
Al-Marzouq said that KFH’s continuous holding of the international rating agencies positive ratings confirms its sound financial position, adding that Moody`s affirmed A1 / Prime-1 long- and short-term domestic and foreign currency deposit ratings of KFH. At the same time, Moody's upgraded KFH's baseline credit assessment (BCA) to baa3. The outlook on KFH's long-term ratings remains stable. Fitch Ratings also has affirmed recently KFH`s Long-Term Issuer Default Rating (IDR) at 'A+', with a stable outlook. The rating agency also affirmed the company’s Viability Rating at 'bb+'.
Best Bank in Kuwait
KFH has won prestigious awards from well-known international providers, including the Euromoney 'Best Bank in Kuwait' award for 2019 and the Global Finance's World Best Islamic Financial Institution award for 2019. The criteria and methodologies are used for these awards including but not limited to, customer needs, technological innovation, quality of products, reputation, customer satisfaction, geographic footprint, strategic relationships, excellence and adapting to the changing market conditions. All these ratings are based on the advice of bankers, analysts and financial experts from around the world.
Al-Marzouq said that “the recruitment and development of Kuwaiti youth is ongoing strategy at KFH, which is supported by growth opportunities and a large market share. The organizational structure should be improved, procedures developed, and effective systems implemented to enhance the mechanism and efficiency of work.