KIB’s strong performance reflects improvement in a number of business areas, Deputy CEO says
Bank’s strategy implementation forging ahead: El Saka
KUWAIT CITY, Feb 9: KIB’s Deputy Chief Executive Officer, Mohamed Said El Saka, stated during the 2018 earnings call for the listed companies classified under the category “Premier Market” in Boursa Kuwait, which was held at 2:00pm on Wednesday February 6th 2019, that KIB reported a net profit of approximately KD 21 million for the year 2018; a growth of 18% compared to 2017.
20% growth in financing income In addition, financing income registered a growth of 20% reaching KD 89.5 million compared to KD 74.6 million in 2017.
13% growth in total assets KIB’s total assets increased by KD 253 million to reach KD 2.2 billion, a growth of 13% compared to 2017.
Regarding the strategy update, El Saka pointed out that KIB’s strong financial performance reflects its significant improvement in a number of business areas, in line with its newly implemented strategy. KIB’s strategy implementation is forging ahead, taking the customer banking experience to the next level and delivering much more than just ‘banking’ in the traditional sense. KIB always strive to meet the ever-changing needs of our customers.
NPL ratio stood below 1%, and the total coverage ratio at 343%
El Saka stated that, KIB’s asset quality matrices have improved significantly in 2018 mainly due to continuous efforts in monitoring of existing and new portfolio. NPL ratio stood below 1%, which is one of the lowest among peers while total coverage ratio at 343% in 2018 is one of the highest in the region.
11% cash dividend and 4% bonus shares for YE 2018
Also, KIB plans to increase its distribution to shareholders as the Bank’s Board of Directors recommended cash dividends of 11% i.e. 11 fils per share and bonus shares of 4% i.e. 4 shares for every 100 shares; which is subject to the approval by the Bank’s shareholders’ general assembly and regulatory authorities.
Furthermore, General Manager Financial Control and Planning / CFO, Ajai Thomas, shed light on KIB’s strong set of numbers for the financial year ended 31 December 2018 as bearing testament to successful progression of the strategy KIB adopted and is looking to continue to 2019. He also presented the results in detail, pointing out that KIB reported stellar bottom line growth of 18% to reach around KD 21 million for the year 2018 as compared to KD 17.7 million in 2017, mainly driven by the topline growth of financing income (20%), to reach KD 89.5 million as compared to KD 74.6 million in 2017. The strengthening of the Bank’s core business has helped KIB achieve this remarkable performance during the year.
Net financing income comprised of 81% of the total operating income during the year, as compared to 76% a year ago, reflecting the strengthening of core business activities as KIB does not operate an active investment trading book as per it’s conservative risk appetite.
Thomas added that KIB continued its investments in new branding and IT infrastructure in 2018 through upgrades for enhanced digital banking experience while controlling its other costs. Operating expenses registered a marginal increase to support the business growth.
Thomas also highlighted that In terms of core assets/liabilities’ growth, KIB achieved growth in total assets by 13% to reach KD 2.2 billion in 2018, as compared to KD 1.9 billion in 2017; achieved through growth in financing receivables, which reached KD 1.6 billion in 2018 a growth of 23% as compared to KD 1.3 billion as at 31 December 2017.
KIB’s investment portfolio increased by 14% to reach KD 166 million primarily through increased exposure towards high quality sukuks, compared to KD 145.7 million by end 2017. Investment income was lower compared to 2017 due to certain one off offloads of non-core investments during 2017.
Customer deposits growth has been sustained due to KIB’s various successful product launches/campaigns supported by attractive profit rates; resulting in an increase of KD 115 million or 10% to reach KD 1.3 billion compared to KD 1.2 billion by end 2017.
With regards to the response to the inquiries from participating analysts, Thomas explained on the outlook for retail deposit growth: “At KIB, we are continuing our efforts to become the “Bank for Life” in line with our strategy, and as part of that, we provide our customer with a better banking experience. Customer deposits registered a growth of 10% in 2018 compared to 2017, largely due to our success in improving retail base, acquiring higher volumes through our innovative deposit products launches and various promotional campaigns supported by better profit rates. In equation, this mainly contributed to higher customer trust and better brand visibility within the market”.
With regards to the significant improvements in asset quality, Thomas stated: “We are pleased to report a significant improvement in our asset quality as reflected in lower NPL ratio and higher total coverage ratio. Asset quality matrices have improved significantly in 2018 due to our continuous monitoring and follow up of existing loan book and new exposures resulting in one of the lowest NPL ratios in the region; which was below 1%”.
Furthermore, regarding the loan growth expectation for 2019, El Saka noted that KIB registered an impressive growth in the financing portfolio, in excess of 23% compared to 2017. KIB’s financing portfolio grew in excess of KD 300 Million (23%) compared to previous year. KIB also actively participated in high quality syndications locally and in GCC region with focus on oil & gas, telecom and hospitality sectors. and expect a similar trend to continue.