Warba Bank records strong growth, performance
KUWAIT: Warba Bank achieved successful results in 2016, and is eyeing more success in 2017. CEO Shaheen Al-Ghanim held a press conference on Thursday at the bank’s premises to speak about the bank’s achievements in 2016, its new strategy in cooperation with McKinsey & Company, marketing of Islamic bonds (sukuk) that were launched in 2016, as well as other issues. 2016 was a special year for Warba Bank. “We closed many successful deals in 2016, which resulted in strong growth and performance in Dec 2016.
The most important phase was preparing our new strategy for the next five years. We were keen to invest in this strategy, and although it will not show up in the assets of our balance sheet, it has a great value. We decided to get into a partnership with McKinsey & Company, one of the most popular advisors and consultants to many of the world’s most influential businesses and institutions. Our strategy with McKinsey was approved last month,” said Ghanim during the conference.
“In 2016, we prepared our next strategy, and it was approved by the board in January. Today, Warba is entering a new phase, which is more focused on excelling in its sectors,” he added. Warba will strengthen its leading position in corporate and investment banking. “As an Islamic bank, I think we are successful in both. Financing companies includes structured transactions, while investment banking includes Islamic bonds (sukuk), syndication and others.
Also, we will be offering all modern banking services including digital and electronic services to our clients, which we consider the most important means to reach out to them. We don’t think that having branches according to the old system is not the best option, but we would rather expand through our client’s mobile phones and online services,” stressed Ghanim. In a message to the bank’s clients, Ghanim said: “We offer innovative services and products. We invent solutions and we are a bank that doesn’t sell products that others sell as standard. We are a bank that shares our opinion with our clients and understands their needs to build together suitable solutions that meet their desires and needs.”
In a message to the bank’s employees, Ghanim said: “We won’t judge and will give you the chance to grow and learn. We will invest in our staff and will increase their training. We believe that our competition in the market is through our employees and through training and preparing them for this competition. As we are a bank that invents solutions, we should have employees that can invent and develop.”
In a message to the bank’s shareholders, Ghanim said: “We promise them balanced growth between profits and continuous growing, and achieving good returns for our shareholders. Warba Bank became very interesting for investors as its share value reached 250 fils. Our goal and strategy is to grow with achieving profits. This is our strategy for the next five years.”
Performance
“The market growth was 2.9 percent in financing portfolios, while Warba Bank’s growth was 51 percent in both finance and investment portfolios, as we reached KD 928 million in total income, generating assets that make good returns,” he said.
Sectors
“The sector of individuals faced a great drop in general, but our bank succeeded to achieve growth. The same thing applied in the contracting sector, where the market growth increased and we as well achieved growth. Also, the trading sector improved and we achieved growth in this sector. Due to the variety of our portfolio and entering new sectors, even our real estate portfolio registered growth,” Ghanim said.
Warba Bank achieved a greater growth percentage than other banks. “We attracted clients from other banks, which is reflected in our numbers. Warba proved that we are able to compete. Financing a project in New York was one of the most important contracts in 2016, along with KNPC project and others,” noted Ghanim.
In 2017 Warba is preparing more projects, especially those planned by the government. “These include Kuwait Airways Corporation, KPC and RFP for consulting services. Also, we are financing the main contractor for Formula 1 tracks. Also, there is an oil refinery and many other government contracting projects that we are expecting,” he stated.
“We continue to grow in the individuals sector. We also entered in the financing contract of Bank Ajman - out of the $230 million, we financed $40 million. Furthermore, we entered in the ICD bonds with KD 25 million, and we bought some of the bonds of Faisal Holding and became shareholders in $250 million. For the first time, we entered in the structured issuance notes of Emirates airlines with $14 million,” he also said.
Warba Bank is targeting to reach 10 percent of the market share in Islamic banking. “We have reached 2 percent and expect to reach 10 percent within the next five years. We expect to grow by 40 to 50 percent annually to reach 10 percent, depending on market growth. We are not only focusing on the local market, but we also target to distribute transactions in cooperation with other banks, which will allow our bank to compete in mega deals,” Ghanim explained.
Warba bank will go on a non-deal road show this month. “We will be focusing on East Asia including Singapore, Hong Kong, Dubai, Abu Dhabi and London. The contracts will be based in London. Regional and international market is awaiting bonds from Kuwait due to its high quality and small numbers, especially from Warba, which is supported by the government. The bonds will focus on corporate, investment and retail. We reached 18 percent capital adequacy, and after issuing the bonds we will reach 33 percent,” stressed Ghanim.
The operating model will not focus on launching big branches that have high cost. We will rather use technology to reach our clients. “This will allow the bank to enter into mega deals and projects, while other banks with high spending on operating huge branches won’t be able to do so. All the services that clients need the bank will provide through online services. The e-signature is one of the modern services. But we will still open about three or four branches annually,” he concluded.