Kuwait: National Bank of Kuwait issues $750mln RegS/144A Perpetual Non-Call 6-year Tier 1 capital securities28.11.2019
National Bank of Kuwait (NBK) issued $750 million RegS/144A perpetual Non-Call 6-Year Tier 1 capital securities, offering 4.5% coupon rate; the lowest for GCC Tier 1 issuance amongst both conventional and Sharia-compliant issuances.
The Tier 1 capital securities were more than 3-times oversubscribed with a peak order book of $2.3 billion.
The proceeds of the issuance will boost the Banks’ capital base (additional Tier 1) in compliance with the Basel III regulatory framework and Central Bank of Kuwait regulations.
The issuance was well received by fixed-income investors and financial institutions around the world, reflecting NBK’s well-established reputation and solid Investors’ confidence
The transaction achieved a globally diverse order book lead by US investors at 33%, followed by UK investors at 27%, Asian-Pacific investors accounted for 20%, while European and MENA investors each made up 10% of the final order book.
The Additional Tier 1 Capital securities issuance, which is the largest in the GCC compared to similar issuances, attracted strong participation from global investors reaching 90%.
The issuance received a ‘Baa3’ rating from Moody’s, underscoring the bank’s outstanding credit ratings.
NBK Capital, Citi, J.P. Morgan and Standard Chartered acted as Global Coordinators and Joint Lead Managers, while HSBC and UBS acted as Joint Lead Managers on the transaction.
NBK continues to collectively enjoy the highest credit ratings from the top three international rating agencies; Moody’s, Fitch Ratings and Standard and Poor’s.
The Bank’s ratings are supported by its high capitalization, prudent lending policies, and its disciplined approach to risk management, in addition to its highly recognized and very stable management team.
The NBK has an extensive local and global presence. It has boosted its foothold in a number of international hubs in London, Paris, Geneva, New York, Singapore, and China (Shanghai), in addition to a number of MENA countries including Lebanon, Jordan, Iraq, Egypt, Bahrain, Saudi Arabia, UAE and Turkey.
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.