Kuwait: NBK Announces the Retirement of Its Group CFO06.10.2020
National Bank of Kuwait Group today announced that its Group Chief Financial Officer Jim Murphy is retiring after a twenty-year career with the Bank. Mr. Murphy plans to step down from his position at NBK effective 31st October, 2020. NBK also announced that Mr. Sujit Ronghe, the Group’s Financial Controller, will be Acting Group CFO commencing November 1st.
“On behalf of NBK’s Board and Management Team, I would like to thank Jim for his commitment, dedication and highly valued contributions to the growth and development of the NBK Group during his many years of service at the Bank. Jim’s exceptional leadership skills together with his extensive financial expertise have been of tremendous value to NBK over the years,” said Mr. Isam Al-Sager, NBK Group CEO.
Mr. Murphy said: “It has been a privilege and a pleasure to work at NBK over the many years, and a true honor to have worked with NBK’s distinguished and respected Board of Directors and Management Team. I want also to pay tribute to my colleagues in Group Finance whose professionalism, dedication and support have been invaluable. Extremely difficult though it is for me to make the decision to retire from NBK, the time has nonetheless arrived for me to move on to pastures new and to pursue fresh personal and family interests. I wish the members of the Board, the Management Team and all at NBK continued success long into the future”.
Murphy joined National Bank of Kuwait back in 1999 marking the start of a twenty-year career with the bank, during which he promoted the bank’s success and contributed to many accomplishments. He has been in the position of Group Chief Financial Officer since 2010, and is also a member of various management committees.
Murphy has extensive experience of over 40 years in finance and the banking sector, during which he held many positions, as he worked as head of management accounting in Ireland and the UK at a leading bank (AIB Bank). He also obtained many academic and professional certificates, including Certified Management Accountant (CMA) and Certified Secretary, both from the UK. He also holds a degree in marketing from Ireland, in addition to attending many specialized executive courses at Harvard and Stanford universities.
It is worth mentioning that NBK enjoys a solid financial position as reflected in strong capitalization levels, high asset quality standards and a stable financing base, in addition to being consistently awarded the highest credit ratings of all banks in the region from all international credit rating agencies. This is supported by the bank’s leading position for over 67 years at the level of Kuwait and the whole region, and a team with banking experiences that make it among the best in the region, led by an executive management that managed over the years to set successful banking strategies and closely monitor their implementation, which contributed to establish the bank’s regional and international position.
Kuwait: NBK - Bahrain Reports a Net Profit of BHD 60.89 Million (KWD 49.793 Million) in 1H 202026.08.2020
National Bank of Kuwait – Bahrain (“NBK – Bahrain”) reported a net profit of BHD 60.89 million (KWD 49.793 million) for 1H 2020, compared to BHD 59.95 million (KWD 48.283 million) for the same period in 2019, recording an increase of 1.6% year-on-year.
As of end of June 2020, NBK-Bahrain’s total assets grew by 4.6% y-o-y, to reach BHD 7.135 billion, compared with BHD 6.824 billion for the same period in 2019, while total shareholders’ equity recorded BHD 692.426 million.
Commenting on the Bank’s 1H 2020 results, NBK Group CEO, Mr. Isam Al-Sager said; “NBK – Bahrain managed to post good profits for the 1st half of 2020, despite the unprecedented challenges facing the operating environment and the uncertainty following coronavirus pandemic outbreak, combined with the sharp fall collapse in oil prices, in addition to global interest rates cuts, which added more pressure on net interest margins.”
Al-Sager pointed out that NBK Group’s strategic investments over the last years in the main areas supporting growth and performance of international operations had a major impact on boosting the group's profits and minimizing risk.
This once again demonstrates the success of the diversification policy adopted by the group for a long time, especially in Bahrain, given the promising growth prospects and positive outlook of this market."
Al-Sager added that NBK-Bahrain continues to consolidate its position year after year in the Bahraini market, which is one of the key growing markets for NBK Group, especially considering that the bank’s profits are operating profits.
On his part, General Manager of NBK - Bahrain, Mr. Ali Fardan said: “The bank has achieved good results for the 1st half of the year despite the challenges facing the banking sector, thanks to the continued reliance of NBK Group’s clear strategy and sound vision on focusing on core banking activities.”
Fardan affirmed that the bank took upon itself to support its customers during these exceptional circumstances, by deferring their loan and credit card installment payments, as part of the bank’s commitment to its national duties.
Fardan stated that the bank activated business continuity plans during the crisis to ensure helping our customers make it through the prevailing difficult circumstances, and also worked closely with the Central Bank of Bahrain to support the stimulus package that aimed at mitigating the fallout of coronavirus crisis on the local economy.
Additionally, he indicated out that the bank continues to enhance its activity in the Kingdom of Bahrain to provide top-notch banking and financial services to both its individual and institutional customers.
Fardan commended the efforts of the Central Bank of Bahrain, in particular, and government authorities, in general, which supported the performance of the bank and the banking sector in Bahrain at large. He also stressed that the support provided by NBK Group to the bank in Bahrain, through its wide regional and international branch network, has clearly contributed to promote the bank's activities in the Bahraini market, capitalizing on its high credit ratings, extensive relationship network, and leading reputation as the best bank in the Middle East and one of the Safest Banks all over the world.
Kuwait: Al-Sager: NBK Stands on Solid Grounds ... And the Pandemic Demonstrated Our Digital Strength09.08.2020
CEO of National Bank of Kuwait Group, Mr. Isam Al-Sager stated that: “The past few months witnessed challenges on all levels as a result of COVID-19 outbreak and the subsequent extreme measures taken by governments around the world in an effort to control the outbreak. However, these measures reflected very negatively on the economic activity and business sentiment globally.”
On the sidelines of the Analysts' Conference Call/Webcast for the results of 1Q and 1H 2020, Al-Sager added that the Group’s business was impacted in most of our locations leading to more challenging operating environment across our network. Net profit for 1Q2020 recorded KD77.7mn and KD33.4mn for 2Q2020. This led to 1H2020 profits of KD111.1mn, down 47% year-on-year compared to last year.
Al-Sager noted that the domestic economy was pressured and the impact of the long period of lockdown has had its toll on our operations as well. We are expecting this year’s GDP to contract by 6% because of the expected non-oil GDP contraction by around 4%.
Al-Sager pointed out that: “From business shutdowns to curfews and border closures, all these actions along with the change in sentiment created a severe shock to world economies. The impact of the pandemic in the GCC region was even more severe because of the large drop in oil prices and its impact on economic activity and budget deficits. In the first half of 2020, most GCC countries have seen their fiscal positions weakening with exceptionally large budget deficits projected for 2020.”
“The full closure and slower economic activity, especially during Q2 of the year, had significant impact on our operations. The drop in transaction volumes has resulted in lower fees and commissions income, whereas the low interest rate resulted in more pressure on our interest margin.
Additionally, the impact of non-oil GDP contraction, the lower oil prices and the lock down period, had all increased the level of uncertainty around the cash flows outlook for many of our customers, which led to higher provision charges,” added Al-Sager.
NBK Group CEO affirmed that: “From day one of COVID-19 pandemic outbreak, the bank took proactive measures and activated emergency plans at the very early stages of the crisis, in order to protect our employees and ensure business continuity.”
Al-Sager added that NBK business model showed great flexibility during the crisis, which enabled it to provide support and advice to our customers facing financial difficulties and relying heavily on our digital capabilities to maintain the level of service quality and accessibility that our customers would expect in normal times.
Al-Sager indicated that since the early days of the crisis, we realized that the virus spread and the control measures implemented by governments around the world would have a negative impact on the bank’s profitability. Therefore, we immediately introduced some cost-savings initiatives to be implemented across the Group in an effort to ease the pressure on the bottom line, without affecting our future business plans.
Al-Sager stressed that NBK, in coordination with the Central Bank of Kuwait and Kuwait Banking Association, participated in all initiatives aimed at relieving our customers and lifting some of the pressures they were facing. We extended support to our customers by suspension of fees on POS terminals, ATMs and digital channels for 3 months, in addition to increasing the limit for contactless payments. Moreover, we provided support to individuals by the deferment of consumer/installment loans and credit card installments for a period of 6 months for all our customers. We have also provided support financing to individuals, SMEs, and economic entities impacted by COVID19 crisis.
Strong Capital Base
Al-Sager emphasized that despite all the challenges that faced the bank in 1H, the Bank’s balance sheet strength remains intact and still stands on firm grounds; noting that the bank’s strong capital base, comfortable liquidity levels and the quality of its profits will give it great capacity to absorb the impact of COVID-19.
Al-Sager pointed out that the impact of COVID-19 reaffirmed some of NBK’s key strengths, thanks to its strategic investments over recent years to accelerate the development of digital banking services, which provided the bank with high operational flexibility during this period.
He also mentioned that digital channels delivered virtual alternatives to branches allowing the bank to serve its customers in the best way possible, noting that the bank’s disaster recovery and crisis management plans all proved very successful when tested during the early days of the outbreak, the fact that gives the bank more comfort as we move ahead towards a recovery phase.
Al-Sager stated that it is too early to have a well-informed discussion on dividend distribution for 2020 as we are still in the half year. In addition, dividend is a function of earnings and capital and normally this happens at year-end after the Bank assesses the closing capital position and future capital needs; noting that the priority will be to maintain the bank’s solid capital position, with the proper buffers similar to what we have maintained over the years.
Regarding the intended government cut in its budget by 20% and how that will affect capital expenditure and if there are any delays on expected mega projects, Al-Sager said that Kuwait as well as other GCC countries, will feel the pressures, not only from the spread of COVID-19, but also because of the drop in oil price as Oil GDP and oil receipts remain a significant contributor to the country’s GDP and to budget revenues.
The immediate response to that would be budget cuts and rationalization of spending. Capital expenditure will be among those planned cuts, and accordingly, we do expect some project delays and/or cancellations and have witnessed already.
Al-Sager added that despite that negative trend, we still see some activity with the value of projects awarded in 1H2020 totaling some KD 900mn, noting that he is also hopeful to see some rebound in activity on both the execution side as well as the awards with the planned gradual opening of the economy.
On his part, Head of Group Management Accounting at National Bank of Kuwait, Mr. Shyam Kalyanaraman affirmed that the Group’s balance sheet remains strong with high credit quality and stable capital levels. NBK’s capital base along with its ability to generate healthy operating profits provides a strong credit loss absorption capacity.
Kalyanaraman added that the bank’s operating income is from a well-diversified asset mix, which is unique to NBK amongst Kuwaiti banks in terms of its geographical spread of operations, and due to its ability to conduct business in both conventional and Islamic banking. This diversification gives a significant degree of resilience to Group’s earnings and provides it with a strong competitive edge.
He also added the bank has resilient operating income from Domestic and International Operations, upbeat lending in 1Q2020, although impacted in 2Q2020 due to the slower pace of economic activity, good growth in core franchise deposits, reasonable cost growth, comfortable liquidity levels and solid capital base.
With regard to the deferral of consumer loans installments for a period of 6 months, Kalyanaraman explained that, as instructed by the Central Bank of Kuwait, the modification loss has been charged to equity not to the P&L. Our equity has been charge, after adjusting for our holding in Boubyan Bank, with KD 130mn, which will be phased-out in capital adequacy ratio calculation over 4 years starting from 2021.
Regarding the increase of provisions and impairments, he mentioned that it was notably due to the charge in respect of investment book to cater for the effects of volatility that may arise in anticipation of worsening macroeconomic factors due to the impact of COVID-19, and in respect of the bank’s operations in Lebanon while NMC exposure is covered fully as part of the credit provision.
He also affirmed that the cost of risk in the previous years normalized at around 82bps, and given the impact of COVID-19, we do see some provisions with respect to some of our Kuwaiti corporate and retail portfolios, in addition to some precautionary charges as well in anticipation of future circumstances.
“There has been no big issue with respect to credit quality. What we have seen today is only with respect to liquidity issues with our corporate customers, but we have not seen any deterioration in credit quality,” Kalyanaraman said.
He also pointed out that despite the relaxation offered by the Central Bank of Kuwait regarding some regulatory requirements; the Group was able to maintain the original mandated liquidity levels.
Kuwait: NBK reports KD 111.1 million net profit for the 1H 202029.07.2020
National Bank of Kuwait (“NBK”, the “Bank” or the “Group”) has announced its financial results for the 3-months period ending 31 March 2020 and the 6-months period ending 30 June 2020. NBK reported a net profit of KD 77.7 million (USD 251.7 million) for the 3-months period ended 31 March 2020 and a net profit of KD 111.1 million (USD 360.9 million) for the 6-months period ended 30 June 2020, recording a drop of 27.9% and 46.9% year-on-year, respectively.
Commenting on the Bank’s 1H 2020 results, NBK’s Chairman of the Board, Mr. Nasser Al-Sayer said; “The spread of COVID-19 and the constrains imposed by governments around the world to limit its spread, including social distancing measures and lockdowns, have weighed negatively on supply chains and production levels leading to severe disruptions in the global economy.”
Al Sayer added, “The Kuwaiti economy similarly faced unprecedented challenges in the first half of the year. In addition to the negative impact of the pandemic outbreak and spread, the large drop in oil prices added further pressures.
This has generally led to a challenging operating environment that will have a negative impact on the overall economy as well as the banking sector in Kuwait. In the meantime, the timely responses we have seen from the Government and Central Bank of Kuwait including various policy measures and macro prudential initiatives are all expected to lift some of these pressures ensuring the stability of the financial sector and healthy economic recovery.”
“Our economic forecasts indicate a contraction of around 6% in Kuwait’s GDP in 2020 as a result of the economic headwinds resulting from the disruption in commercial activities and the sharp decrease in government revenues as oil prices plunged.”
Al-Sayer also highlighted the role of NBK in supporting all Government and Central Bank of Kuwait efforts in lifting the pressures caused by the pandemic and contributing to the wellbeing of its local communities. “At the early stages of the outbreak, the Bank clearly defined the level of its commitment to support the government efforts to combat the spread of COVID-19 as part of the responsibility to our community.
NBK contributed to the establishment of a KD 10 million CBK fund to support State efforts in facing the virus as well as donating KD 1 million to KRCS to provide ventilators and the deployment of fully equipped mobile clinics to quarantined areas.” Al-Sayer added.
“The health and safety of our employees and customers will remain our top priority along with our efforts to ensure the delivery of efficient and quality banking services. At last, I would like to take this opportunity to thank all the first-liners from across all organizations for their exceptional efforts in combating the pandemic” Al-Sayer concluded.
From his side, NBK’s Group CEO, Mr. Isam Al-Sager affirmed that: “the consequences of the spread of COVID-19 have weighed heavily on the Bank’s profits mainly during the second quarter.
The full shutdown of commercial and financial activities has affected transaction volumes, which in turn reflected negatively on the different revenue lines of our operations. Additionally, the interest rate cuts both domestically and internationally added more pressure on interest margins.
On the other hand, higher provisions and impairment charges has also impacted our profitability during the two opening quarters of 2020.”
Al Sager also added, “We are facing unprecedented challenges that will have a protracted impact on the global economy and the banking sectors across the world.
Our 1H profitability trends reflected some of these challenges in the form of lower revenues and higher provisions and we continue to expect further pressures throughout the year. These pressures will negatively affect economic activity as well as banking sector profitability. That said, NBK remains in a very strong position to withstand the impact of the crisis.
Our strong and quality core banking earnings, comfortable liquidity and capital levels will enable us to have enough capacity to absorb the impact of the pandemic on the economy and the banking sector.
Al-Sager also highlighted that:” the strategic investments the Bank has made over recent years and most importantly the ones that led to the acceleration of digital banking services, provided the bank with operational flexibility. Our digital channels provided effective and practical alternatives to our branches and thus the Bank was able to adapt to the unforeseen conditions in the operating environment.”
“We provided support and advice to our customers to help them overcome the financial challenges given the Bank’s history of professionalism and expertise. We will continue to meet our clients banking needs and support the society in overcoming those challenging times. The Bank will also continue to work closely with governments, regulatory bodies and other stakeholders in order to continue contributing to economic recovery across all the geographies where the Bank operates” Al-Sager clarified.
Furthermore, Al-Sager indicated that the Bank has empowered its employees to work remotely and took measures to ensure their safety. He also admired the dedicated efforts made by the employees towards the quality and smoothness of the Bank’s operations during this challenging period.
Performance and operating highlights: 1H 2020
• Net operating income of KD 414.6 million (USD 1,346.8 million), decreasing 8.3% on the first half of 2019
• Total assets stood at KD 29.7 billion (USD 96.4 billion), increasing by 6.5% year-on-year
• Customer loans and advances increased by 8.4% year-on-year to KD 17.6 billion (USD 57.1 billion)
• Customer deposits at KD 17.6 billion (USD 57.1 billion), increasing by 13.6% year-on-year
• Strong asset quality metrics, with NPL/gross loans ratio at 1.77% and an NPL coverage ratio of 185.5%
• Robust Capital Adequacy Ratio of 16.8%, comfortably in excess of regulatory requirements
NBK initiatives in Facing COVID-19 Challenges
• Took the initiative to support businesses through ceasing collection fees on POS machines and other electronic channels for 3 months; in addition to increasing NFC limit
• Deferral of loans and credit card installments for 6 months including the waving of interest fees associated
• Facilitating financing to individuals and businesses
• Provided support and consultation to clients to overcome their financial challenges
• Building on our investment in digital transformation, our digital channels played a vital role in servicing customers, with electronic transactions reaching a record high of 98.4% of total transaction during the crisis
Kuwait: NBK’s AGM was held with a 77.86% quorum and approved all BOD’s proposals08.03.2020
National Bank of Kuwait (NBK) held today (Saturday, 7 March 2020), its 2019 Annual General Meeting (AGM) and Extraordinary General Meeting (EGM), at which there was a quorum of 77.86 %. The AGM and EGM approved the Board of Directors’ recommendation to distribute 35% cash dividends to shareholders (equivalent to 35 fils per share) and the distribution of 5% bonus shares (5 shares for every 100 shares owned).
NBK’s Chairman Mr. Nasser Al-Sayer delivered his speech at the 2019 AGM and EGM affirming that NBK had another year of stellar performance in 2019 across all business units and markets. That performance was clearly reflected in the continued profitable growth and the solid financial results, a testament that NBK is on the right track to consolidate its leadership in the local market and solidifies its prominent position in expanding its geographical footprint across regional markets in line with its diversification and digital transformation strategies; the cornerstones of NBK’s future growth.
Al-Sayer added that in 2019 NBK reported over KWD 401 million in net profits which was mainly driven by core banking activities and strong volumes across most business segments. Customer loans and advances grew by 7% y-o-y, maintaining the Group’s robust balance sheet and demonstrating the quality and diversity of both operations and earnings. “That confirms that the Group’s diversification strategy is an important factor in our strong and consistent financial performance, as we continually seek to maintain diversity in both the markets we operate in and services we provide in such a way that guarantees operational excellence in the ever-changing banking environment”, Al-Sayer commented.
Al-Sayer said that he was pleased to host the AGM and EGM at NBK’s new headquarters which is considered a milestone in the Bank's sustainability practices, resulting in NBK’s selection to be a constituent of the prestigious sustainability FTSE4Good Index Series. NBK Tower is a new landmark green-building built in line with LEED Gold requirements, being one of the first with such high certification in Kuwait and the region based on its energy saving and environment preservation designs. “We are very optimistic regarding conserving energy and water consumption, as well as reducing greenhouse gas emissions.” Al-Sayer stressed.
Al-Sayer confirmed that in the backdrop of a challenging global economic environment Kuwait has been a beacon of stability thanks to its solid economic foundations that supported the stability of the operating environment despite global trade uncertainties and regional geopolitical tensions.
NBK showed a great deal of resilience in facing such challenges, thanks to its leadership position, its dominant market share and its strong financial position, thus positioning NBK to be the trusted bank of choice for financing public and private projects, as it maintains its leading role in supporting economic growth and the agenda of ‘New Kuwait 2035’”, Al-Sayer concluded.
Strong Balance Sheet
Isam J. Al-Sager, NBK’s Group Chief Executive Officer, said: “We are extremely proud of our solid financial performance over the past year. NBK fared well and delivered strong results despite the challenging operating environment which was negatively impacted by volatile oil prices. NBK’s performance in 2019 highlighted the strength of our business model and strategic focus driven from our diversification strategies as clearly reflected in the strong growth of our balance sheet. Total assets grew by 6.7% y-o-y, reaching KWD 29.3 billion and equity attributable to shareholders stood at KWD 3.21 billion. Meanwhile, customer loans and advances increased to KWD 15.9 billion, up by 10.7%.
Al-Sager confirmed that NBK maintained healthy levels of capitalization, with a capital adequacy ratio of 17.8% at year-end, exceeding the Central Bank of Kuwait’s guidelines and Basil III requirements. NBK’s asset quality metrics remained strong with the ratio of non-performing loans to gross loans at 1.10% and an NPL coverage ratio of 272.2%. Return on average equity was 12.3% while return on average assets was 1.42%.
Al-Sager highlighted that towards the end of 2019, NBK issued USD 750 million RegS/144A perpetual Non-Call 6-Year Tier 1 capital securities. The issuance was well received by fixed income investors and financial institutions around the world, reflecting NBK’s well-established reputation, solid investor confidence and its highest credit ratings among Kuwaiti and regional banks.
Al-Sager indicated that NBK’s financial and operational performance is a testament to its solid foundations and confirms its ability to grow in the medium and long terms, as the Group’s strategies continues to focus on its forward-looking development and sustainable growth.
“The diversification of our income sources by focusing on Islamic Banking through our subsidiary, Boubyan Bank, and the diversity of our customer base in the MENA region were key drivers for consistently reporting strong profits. Our international operations accounted for 28% of the Group’s profit. This is a huge step in building a global banking network that fulfills the Kuwaiti economy’s need in supporting “New Kuwait 2035” though playing our role as a deeply rooted bank with a vastly expanded international network and the prestigious reputation of NBK’s name”. Al-Sager added.
Going forward, Al-Sager stressed that NBK is focused on increasing operational efficiency through its investments in technology and digital transformation in order to reach a more efficient operational performance and provide the best solutions to the Bank's retail and corporate clients as it strives to maintain its leadership position in providing the best digital banking solutions.
Commenting on NBK’s solid performance throughout 2019, NBK’s Deputy GCEO Ms. Shaikha Al Bahar said: “2019 was an outstanding year, not only in terms of the Bank’s solid financial performance but it was a great year for NBK all around. NBK successfully managed to achieve huge strides in establishing its digital footprint and consolidating its leadership position in advanced banking technologies across the region. We continue to reap the benefits of building digital disruptive businesses to diversify income sources and mitigate risks by expanding our international operations, which is considered one of the Group’s unique competitive advantages.”
Al-Bahar added that these achievements were reflected in NBK’s financial results, as profits continued to grow despite operational challenges and as the Bank accelerated its drive towards establishing its digital age through the implementation of its digitization roadmap in order to maintain its strategic competitive advantage over its peers. In the meantime, NBK’s balance sheet continued to expand while keeping strong asset quality metrics, demonstrating our deep commitment towards sustainable growth within the guidelines of the Bank’s prudent risk mitigation policies.
“We are proud of launching our in-house Digital Factory, which is playing a vital role in driving the Group’s progress towards a digital future and supporting our digital offering in the region. With its client-centric approach, the Digital Factory is staffed by the market’s sharpest and most capable FinTech minds”. Al Bahar added.
Al Bahar emphasized that the continued expansion of the Group’s footprint represents its most significant competitive advantage, thanks to the unique offerings that sets NBK apart from its competitors. Therefore, international operations is an essential pillar in maintaining the Bank’s leadership and its continued growth as its contribution to the group’s net profit reached 28% despite the lower cost of risks in the Kuwaiti market, and its contribution also increased to 25% of the total operating revenue.
“We maintain our focus on expanding our operations and continue to heavily invest in the deployment of our digital offerings across our main markets, especially Egypt and Saudi Arabia”, Al Bahar confirmed.
Speaking of the Egyptian market, Al Bahar pointed out that NBK is focused on building digital platforms to complement the traditional branch-based sales and service model. NBK Egypt is also focused on expanding its footprint in the Egyptian market as the country’s economy gathers further momentum in the rollout of the wide-reaching economic reform programme, as we maintain our focus on increasing our share of the burgeoning retail banking segment and continue to expand our presence throughout various Egyptian governorates.
As for the Saudi market, NBK is working on launching an unconventional banking model that will represent a fundamental pillar in supporting its expansion strategy in the Saudi market. Moreover, NBK successfully inaugurated two new branches as it maintains a permanent presence in three of the Kingdom’s major cities: Jeddah, Riyadh and Khobar. NBK Saudi is also targeting to capitalize on growing its Assets Under Management (AUM) through Watani Wealth Management Company.
As for the remaining international markets, Al Bahar indicated that NBK has established a unique banking framework which mainly maintains a strong emphasis on promoting cross-selling culture across the Bank’s locations and units through its international operations in 15 countries across 4 continents. NBK also continues to expand its presence in EU markets as it strives to support international trade between Europe and the regional countries through NBK France.
Meanwhile, NBK-Kuwait CEO, Mr. Salah Al Fulaij said: “NBK had unique operational performance in 2019 as it successfully managed to achieve outstanding growth rates across our main business segments despite adverse headwinds that negatively impacted the non-oil sector and the delay in project award and execution, thanks to the continued development of the bank’s business model in the Kuwaiti market, our primary market, which constitutes 44% of total assets and 63% of net profits”.
Al-Fulaij pointed out that last year, NBK mainly focused on corporate banking services to maintain its dominant share in the local market through skillfully maintaining close relations with former and current clients thanks to its exceptional customer service and specialized professional advice, in addition to its international presences. Moreover, NBK Capital provides further support through the comprehensive and wide range of financing solutions and investment offerings, which are key elements in maintaining the Group’s leading position in financing mega deals.
“NBK continued to consolidate its position at the forefront of Kuwait’s oil & gas, as it remains the ‘house’ bank for lending to KPC and its subsidiaries as demonstrated by the KWD 350 million revolving facility it arranged in 2019”, Al-Fulaij added.
Al-Fulaij highlighted that Private Banking Group successfully maintained its leadership position as a leading provider of wealth management services in the Kuwaiti market with improved liquidity and significant increase in its AUM which enabled the Group to record strong growth in its revenues.
Speaking on digital banking products and services, Al-Fulaij confirmed that NBK has the best mobile banking applications across local and regional markets thanks to the continuous development and improvements efforts. In 2019, 17 new and updated services were launched, as Mobile app users can now book term deposits in various currencies and may also benefit from NBK Geo Alerts, the first of its kind service that allow customers to receive notifications about discounts, offers and NBK Rewards Points on their phone while shopping, in addition to further developing NBK Quick Pay. That was reflected in a significant increase of 55% in NBK Mobile users y-o-y, and Mobile users satisfaction rate jumped to 95%.
As for Social Corporate Responsibility (CSR), Al-Fulaij said: “We are very pleased that NBK has become the biggest contributor to CSR, and we are proud to be at forefront of all local and regional institutions that have introduced environmental, social and economic sustainability initiatives. Our CSR initiatives grew by approximately 11% in 2019, including our contributions to NBK Children’s Hospital, in addition to numerous initiatives covering various sectors, including: health, education, youth, environment, sports, and culture”.
Al-Fulaij concluded his message by stressing on NBK’s role in achieving these accomplishments and maintaining its leadership position as a leading franchise in the private sector that attract talented and experiences employees as it continues to heavily invest in its human capital with over KWD 1.5 million spent last year towards training programs in cooperation with the most prestigious universities and institutes around the world including Harvard Business School and INSEAD.
Al-Fulaij also stressed that NBK’s strength stems from employing national manpower, as NBK brought its Kuwaitization ratio to 70.6%, exceeding regulatory requirements. Moreover, 45% of the workforce consists of female employees, which is an unprecedented achievement across the local and regional banking sector.
Kuwait: NBK reports 2019 net profit of KD 401.3 million, increasing 8.2% Y-o-Y20.01.2020
National Bank of Kuwait (“NBK”, the “Bank” or the “Group”), today announced its financial results for the year ended 31 December 2019. The Group delivered strong annual performance with net profit of KD 401.3 million (USD 1.3 billion) compared with KD 370.7 million (USD 1.2 billion) in 2018, increasing by 8.2% year-on-year.
Total assets in 2019 stood at KD 29.3 billion (USD 96.6 billion), increasing by 6.7%, with customer deposits increasing by 10.7% to reach KD 15.9 billion (USD 52.6 billion) and customer loans and advances growing by 6.8% to KD 16.6 billion (USD 54.6 billion). NBK’s Board of Directors has proposed the distribution of a cash dividend of 35 fils per share, representing 56.4% of net profit, in addition to 5% bonus shares.
The proposed dividend is subject to shareholders’ approval at the Annual General Meeting. Earnings per share (EPS) stood at 60 fils, as compared to 55 fils in 2018, and equity attributable to shareholders increased by 8.8% to KD 3.21 billion (USD 10.6 billion).
Nasser Musaed Abdulla Al-Sayer, NBK Group Chairman, commented: “2019 was another strong year as we delivered healthy profitability while maintaining a robust balance sheet – demonstrating the quality and diversity of both our operations and earnings.
The Bank remains firmly committed to New Kuwait 2035 and is taking confident steps towards supporting its delivery. These financial results are driven by the execution of our strategy for growth and innovation, while contributing to the country’s socioeconomic development.
A highlight of the year was the heavy oversubscription of our USD 750 million perpetual tier-1 capital securities issuance, which was well-received by global fixed income investors and reflects solid investor confidence in NBK.”
Net operating income grew by 1.4% to KD 895.5 million (USD 3.0 billion), while non-interest income increased by 7.0% to KD 206.3 million (USD 680.7 million). Our international operations continued to play an important role in mitigating Group-level risk and diversifying income from across geographies. The total bottom line contribution of international operations accounted for 28% of the Group’s net profit in 2019.
Isam J. Al-Sager, NBK’s Group Chief Executive Officer, said: “Despite operating conditions remaining below expectations, with a volatile oil prices environment, NBK recorded another set of strong results, as the breadth of its operations and the scale of its international footprint mitigated risks and ensured consistent profitability.
Non-oil GDP growth in Kuwait is projected to reach 2.5% in 2020, and the pipeline of scheduled project awards is healthy. There is a broad expectation that the year will bring positive operating conditions, as the government continues to stimulate economic activity and the appetite for credit improves.
NBK is deeply committed to its digitalization strategy, in an effort to develop an established foothold in its regional markets. In 2019 we were proud to launch our in-house Digital Factory, which is playing a vital role in driving the progress of our digital roadmap. This will soon become a unique competitive advantage in the region.”
NBK’s asset quality metrics remained strong with the ratio of non-performing loans to gross loans at 1.10%, compared with 1.38% in 2018, and an NPL coverage ratio of 272.2%, compared with 228.1% in 2018. The Bank maintained healthy levels of capitalization, with a capital adequacy ratio of 17.8% at year-end, compared with 17.2% in 2018. This level of capitalization is aligned with the Group’s risk appetite and in excess of the Central Bank of Kuwait’s requirements.
Al-Sager concluded: “NBK’s strategy for 2020 will not deviate from its current trajectory. The Group will continue to increase the diversity of its income across geographies and segments, with the primary objective of achieving superior returns and offering exceptional service to customers.”
In 2019, NBK was recognized by Global Finance and The Banker as the Best Bank in Kuwait, as well as ranking in the World’s 50 Safest Banks list by Global Finance for the 14th consecutive time. The awards are evidence of NBK’s strong financial position, market leadership and of its ability to meet the ever-changing needs of its customers.