Acting Group CEO of Kuwait Finance House (KFH), Abdulwahab Essa Al-Rushood said that the Group performance has grown significantly during 2021. Profits approximated the 2019 levels before the spread of the Covid19 pandemic. Net profit in 2021 grew by 64% to reach KD 243 million compared to 2020.
Al-Rushood said that subsidiaries contributions in total operating income approximated 49.7%, mainly from KFH-Turkey which has achieved remarkable performance despite fluctuations in Turkish Lira. He emphasized that the finance portfolio in KFH-Turkey is well balanced between the Turkish Lira and main foreign currencies.
He indicated that KFH has a strong capital base and came first among Kuwaiti banks with MC of KD 7.6 billion.
He added that KFH enjoys high asset quality. Group NPF declined to reach 1.6% as at the end of 2021 according to CBK accounting basis, which is a favorable ratio considering the economic conditions resulting from the Covid19 pandemic. Provisions for debt coverage approximated 319% for KFH Kuwait, and 326% for the Group as at the end of 2021. Provisions charged to the Group income statement declined by 52% as it reached KD 135 million including provisions for finance, investment, and other additional precautionary provisions.
Regarding divestment, Al-Rushood said that KFH is continuing to focus on core banking business and exiting non-strategic assets and investments which are consuming the capital and are not compatible with the sustainability policy in realizing profit. He emphasized that due to Covid19 pandemic conditions and its negative impacts on the local and global economy exits as at the end of 2021 approximated KD 49.7 million. He expected more exits to occur during the present year as the health and economic conditions improve.
Regarding financing trend and tendency Al-Rushood said “Despite the huge pressures on the retail market which is a highly significant and important sector, yet KFH continued to focus on the retail and corporate finance market and government projects as the Group finance portfolio grew by 5.7% to reach KD 11.4 billion”.
Al-Rushood appreciated the step taken by the CBK to open the door for licensing digital banks and formulating digital banking work frame. He affirmed that this process would increase inter-bank competition and enhance innovation to provide qualitative digital banking services to banking sector customers and to the Kuwaiti market in general.
Al-Rushood indicated that KFH has a highly developed technology infrastructure which has enabled it to take proactive leading steps in adopting digitalization. He added that this fact was clear during the Covid19 crisis as KFH continued to provide its digital banking services to customers despite the total and partial lockdowns.
He noted that KFH customers have performed, through (KFHonline), nearly 160 million digital banking transactions in 2021 i.e., a growth by 25% compared to last year. He indicated that this huge interest in KFH online services confirm the services efficiency and fulfilment of customers’ needs and aspirations. This also confirms KFH pioneering position in providing banking solutions through mobile and alternative channels.
Regarding KFH position in the Sukuk market, Al-Rushood emphasized that KFH is a pioneer in the Sukuk market as a primary trader and a market maker on the regional and global levels. KFH achieved in 2021 more than US$ 16 billion trades in the sukuk market. He emphasized that these trades enhance liquidity and support the Islamic financial markets, thus conforming to the nature of KFH role in activating the sukuk market and the global Islamic Finance Industry.
He added that KFH has succeeded in becoming the number one Primary Dealer for 2021 in the primary market rankings as well as the secondary market concerning IILM Sukuk Program. This is the first time that an institution grabs the top spot in both lists, in the IILM’s Sukuk programme, thus going ahead of all banks in the two lists.
In a question on sustainability from the finance and financial inclusiveness aspects, Al-Rushood said that sustainability comprises several elements e.g., social, environment, human resources, woman empowerment, governance, and other elements. He added that KFH is applying these elements according to global standards. The sustainability trend is not new to KFH as it has several contributions relating to social, environment, responsible investment and other aspects way before sustainability standards gain present interest and focus by organizations and countries.
To achieve sustainability in financial inclusion, Al-Rushood emphasized that KFH is achieving this through several aspects namely: KFH group provided banking services to approximately 7.5 million customers in GCC, Asia and Europe, KFH issued periodical reports highlighting growth in profit and high liquidity ratios and the strong capital base which supports business growth and conforms to regulatory requirements, KFH increased investment in green Sukuk in the total finance portfolio, namely projects relating to the mitigation of carbon emissions and climate change risks. He stated that KFH has issued green Sukuk worth US$ 350 Million to KFH-Turkey as the issuance coverage reached 12 times, the matter which proves global interest in this kind of investment.
KFH provides financial and technical advantages to projects that take into consideration environmental dimensions and the mitigation of carbon emissions. KFH has enabled the persons with special needs to benefit from the banking services and products by allocating a special branch for them in each governorate, highly skilled employees in sign language, special car parking, wheelchairs, and other necessary means. KFH has facilitated banking services to customers round the clock and anywhere through digital solutions as part of its endeavour to enhance financial inclusion and achieve sustainability.