Group Chief Executive Officer at Kuwait Finance House (KFH), Mazin Saad Al-Nahedh said that KFH's sustainable profits reached over 97% of the total profits recorded in 2019, in comparison to 92% in 2018.

Al-Nahedh added during TV interviews to comment on 2019 financial results, that the profit was mainly driven by revenue increase from the core business. Financing income increased by 8.1% comparing to the previous year, to reach KD931.6 million. Total operating income increased by 9.2% to reach KD814.4 million, Net operating income increased to reach KD510.1 million in 2019, a growth of 12.5% over the last year, while total general and administrative expenses decreased by 3.2% comparing to the previous year. Cost to income ratio dropped to reach 37.36%.

Al-Nahedh pointed out that the contribution of KFH subsidiaries in the net operating income represented 44%, mainly from KFH Turkey with a 37.1% contribution. He indicated that KFH Turkey enjoys robust financial position, where its financing portfolio is stable and diversified.

He added that the total exiting of non-core assets reached KD137 million in 2019, that resulted in profits of KD40.7 million, compared to KD21.9 million in the previous year.

He stressed that exiting non-core assets is part of the bank’s strategy in focusing on core banking business and exiting from non-strategic investments that consume the capital and are not in line with the bank’s strategy of achieving sustainable profits. He expected that KFH will exit non-core assets of nearly KD100 million this year.

KFH's Group non-performing debts decreased in 2019 to 1.88%, as per the CBK’s accounting principles, compared to 1.99% for last year. The coverage ratio of provisions for non-performing debts stood at 329% and 231% for KFH solo and the Group respectively, at the end of 2019.

Al-Nahedh explained that the total provisions and decrease in the value charged on the group's income statement was KD196.9 million, indicating that it includes provisions of financing, investment and other provisions. This also includes precautionary provisions of KD60 million taken during 2019, against the balances of financings receivables in KFH-Turkey due to the economic and geopolitical conditions. He added that the total provisions for the Group reached KD647.6 million by the end of 2019.

Al-Nahedh said that KFH’s acquisition of Ahli United Bank B.S.C. (AUB) brings many benefits in terms of improving profitability. The acquisition will improve the quality of the new entity's assets, high capital base, liquidity levels, and capital efficiency at rates. It also creates the largest and best Islamic bank in the world.

He explained that KFH's long-term ratings has been changed by Moody's to positive from stable following KFH's shareholders approving the acquisition of Ahli United Bank B.S.C.

KFH has realized a net profit of KD251.0 million for the year 2019 for KFH shareholders compared to KD227.4 in the previous year, an increase of 10.4%.

Total assets increased to reach KD19.391 billion, an increase of KD1.621 billion, an increase of 9.1% compared to 2018.

Depositors’ accounts increased to reach KD13.553 billion, an increase of KD1.772 billion, an increase of 15.0% compared to 2018.