Kuwait: NBK... 68 Years of Leadership and Growth16.11.2020
There is no doubt that the history of National Bank of Kuwait, which was established in 1952, not only represents a unique and inspiring success story of a bank that rose to success and leadership in the banking business consolidating its position as one of the leading banks in the region today, but also documents the key historical milestones of Kuwait and how the bank contributed to achieving economic and financial independence for Kuwait even before full political independence was attained, and the instrumental role it played in supporting the national economy during critical stages of the country's history.
Today, NBK celebrates the anniversary of opening its doors to the public for the first time in 1952, as the first national bank in Kuwait and the first joint stock company in Kuwait and the Arabian Gulf region.
This year, the celebration is particularly significant as it marks the 68th anniversary of the bank’s actual operation and service provision to customers, which represents a culmination and a continuation of a success journey during which NBK transformed from a small bank that started with a 3-store area and a few employees using rudimentary manual work, to one of the largest, most profitable, leading and innovative banks in the entire Arabian Gulf region.
Everyone knows well the history of Kuwait’s political independence in 1960. However, most people do not know is that 1952 saw another kind of independence that is no less important than political independence, which is the economic independence of Kuwait, by launching the operations of National Bank of Kuwait as the first wholly-owned national bank in Kuwait.
In 1952, a small joint stock company with a capital not exceeding one million Kuwaiti Dinar only emerged under the name of “National Bank of Kuwait Limited”, marking the beginning of a new era of economic freedom and independence for Kuwait, which was under British mandate for a long period, and declaring the independence of the region as a whole, which did not have a single national financial institution at that difficult time in its history, since before 1952, there was only one foreign bank in Kuwait, the British Bank of the Middle East in Kuwait, which was officially inaugurated in February 1942 during World War II.
Since 1949, those in charge of the British Bank in Kuwait have felt that Kuwaiti citizens are not satisfied with its activities and services, and they have also learned that some Kuwaiti merchants have thoughts and a tendency to establish their own bank.
Recently, a number of secret letters written by the British Commissioner in Kuwait to the British Foreign Office, in which he expressed his concern and fear about establishing the national bank and the attempts that were made to hinder its incorporation and continuation of its operation.
The idea of establishing a Kuwaiti national bank that basically serves national interests, takes upon itself developing the Kuwaiti economy, boosting the commercial market, and preserving and growing depositors’ savings emerged for the first time in 1952.
To materialize the idea, a group including the following founders: Ahmed Saud Al-Khaled, Khalid Zaid Al-Khalid, Khaled Abdullatif Al-Hamad, Khalifa Khalid Al-Ghunaim, , Sayed Ali Sayed Sulieman Al-Rifai, Abdulaziz Hamad Al-Sager, Mohamed, Abdulmohsen Al-Khorafi, Yousef Ahmed Al-Ghanim and Yousef Abdulziz Al-Fulaij, held a meeting with the late Sheikh Abdullah Al-Salem Al-Sabah, who endorsed their idea and promised them support.
Under the memorandum of association of the British Bank branch in Kuwait with the government of Kuwait, it was not allowed to incorporate other banks in Kuwait, and the opinion of the Amir of Kuwait Sheikh Abdullah Al-Salem at the time was that this does not apply to the incorporating Kuwaiti banks inside the country.
Amiri Decree Law
Accordingly, the incorporation of National Bank of Kuwait was permitted on 19 May 1952, by virtue of an Amiri Decree Law to this effect. On 15 November 1952, NBK started official operation as a Kuwaiti shareholding company conducting banking business.
National Bank of Kuwait is the first ever national bank in Kuwait and the Gulf, with all board members and founders from Kuwaitis who have a long-standing business activity inside and outside Kuwait.
The bank was incorporated with a capital of 13.1 million rupees, equivalent to only one million Kuwaiti Dinars, divided into 13.1 thousand shares of one thousand rupees each.
In a small building located on the new street, NBK started operation with a small number of people, not exceeding the number of fingers, and with an area not exceeding 3 stores, and at the beginning, it conducted simple and basic banking activities including LCs, currency exchange, simple bank transfers, deposits and withdrawals.
This was how the beginning was, but as time went by, NBK proved its efficiency and worthiness as a participant and supporter of the renaissance movement in Kuwait, providing all kinds of support to individuals and institutions to finance the construction of infrastructure projects in Kuwait of the 50’s, where it was the only Kuwaiti bank at that time.
Replacement of Currency
NBK played a key role in replacing the local currency twice, first in May 1959 when the Indian Rupee notes were replaced by new rupee notes called the Gulf rupees.
As for the second replacement, it was in April and May 1961 when the Kuwait Currency Board issued Kuwaiti Dinars instead of Gulf rupees banknotes. This replacement was a necessity for independence giving Kuwait an independent character and manifesting the country’s sovereignty over its economy and currency.
NBK is the largest major financier of all government development projects as well as the private sector. The bank also has a dominant share in trade finance and financing of foreign companies working in these projects. This represents an extension of a long record of supporting economic development and contributing to building modern Kuwait.
In the 1970s, NBK continued to finance infrastructure and development projects in modern Kuwait. These projects comprised water desalination plants, power stations, road networks, construction and development of oil fields, refineries and support services, import services, construction of hospitals and schools, and support for urban expansion in the country, thus opening vistas for the future of Kuwait.
The bank began to develop its real corporate character through development, restructuring and re-organization plans, the period which acted as the basis for NBK’s progress and booming.
A Safe Haven
During the 80’s, NBK went through a tough test, when the stock market crashed in the so-called "Souk A;-Manakh Crash” in 1982. However, thanks to the balanced and conservative banking methodology of adopted by NBK during this period, it was the only bank that was not adversely impacted by the crisis.
As a result, it was called "The Sole Surplus Bank". NBK also warned several times in its economic reports and publications from the risk of this crash before it occurred and impacted many institutions.
Then came the crisis of the Iraqi invasion of Kuwait in 1990, which was a hard test for the solidity of the bank’s position, as it continued to perform its business from outside Kuwait and meet all its obligations towards its customers and banks abroad, and it also had an instrumental role in financing Kuwait's reconstruction projects.
This outstanding performance of NBK during these two crises has promoted the support and continued trust provided by the bank’s customers as well as strengthened international banks’ trust in it.
During the 90’s and after the liberation of Kuwait, NBK played a leading and essential role in serving the Kuwaiti economy by arranging mega loans, including the loan arranged in favor of the government after the liberation of Kuwait in 1991 amounting USD 5.5 billion, which is the largest loan the Arab region has ever known by that time.
It can be said that the 90’s and the end of the 20th century was the golden era of the bank, during which it showed the signs of maturity and banking prosperity and regional as well as international expansion. Today, the bank has dozens of branches in Kuwait, as well as branches and representative offices and overseas companies in New York, London, Paris, Geneva, Singapore, Vietnam, Turkey and China, in addition to Lebanon, Bahrain Jordan, Qatar, UAE, Iraq and Saudi Arabia.
With the beginning of the 21st century, NBK succeeded in developing into an integrated financial market for advanced banking and financial services and for all customer segments, including individuals, companies and large institutions. It also consolidated its position as a comprehensive investment and financing bank through many deals in the Middle East region.
The COVID-19 pandemic has highlighted the importance of digital banking and electronic payment methods for the future of the banking sector. This proves the success of NBK's insightful and forward-looking vision in its implementation of Digital Transformation Strategy and the development of its digital banking services over the last years, which added greater flexibility to the bank’s methodology and contributed to enriching customers’ banking experience and meeting their various banking needs.
Among all regional banks, NBK was the first to launch a digital transformation map, which contributed to consolidating its leadership in providing the latest digital banking services and electronic payment methods, as the digital culture has become part of the fabric of the bank’s system that is spread across all the group’s business units and different markets in which it operates.
In recognition of these efforts, NBK was awarded the Best Consumer Digital Bank as well as the Best in Mobile Banking in Kuwait for 2019 by the international Global Finance magazine.
Expansion and Diversification
Thanks to its founders, employees, customers and all stakeholders, NBK has become a leading Kuwaiti brand that crosses borders and spans 4 continents.
Although the main operations of NBK are concentrated in the Middle East and North Africa region, it seeks to preserve its international character and its presence in many countries which is best manifested in the group's international footprint comprising China, France, Singapore, Switzerland, Turkey, UK and USA.
The bank’s operations also range from consumer and private banking, corporate banking, Islamic banking through the group’s subsidiary Boubyan Bank, as well as investment banking and asset management through the group’s subsidiary NBK Capital Investment Company.
The diversification of income sources, both geographically and sectorally, represents a key pillar of NBK's strategy to achieve sustainable growth, as international operations have contributed to increasing the volume of the group's business, while focusing on growth in the main markets in Saudi Arabia and Egypt, in addition to continuing growth in the Kuwaiti market.
As part of the bank’s efforts to expand in the main markets in which it operates, NBK supports the activities of the wealth management company in KSA and links it to the bank’s global wealth management platform, while striving to increase commercial banking products and services to sell the group’s products and services to the bank’s customers in KSA. In Egypt, the bank aims to expand in the retail market, by focusing on enhancing customer acquisition, facilitating their transactions, and investing in digital banking services.
NBK has an unwavering commitment to the community to which it belongs, which made it one of the largest contributors to the development of Kuwaiti society, with contributions exceeding half a billion US Dollars over the past decades, with a rich record of social initiatives in all fields and activities.
NBK Children’s Hospital remains an icon of NBK's social contributions, as the bank continued its endeavor to develop this hospital by opening a "Stem Cell Therapy Unit" in Al-Sabah Medical Area three years ago, which is the first of its kind in Kuwait that us specialized in spinal cord transplants for children under 16 years of age free of any charge, for which the bank engaged international consultants specialized in designing children's specialized hospitals.
In appreciation of its achievements in the area of sustainable development, environmental conservation and social responsibility, NBK continues to receive international recognitions, the latest of which was the bank’s inclusion in Refinitiv AFE Low Carbon Select Index for MENA region, which was launched by Refinitiv this October in cooperation with Arab Federation of Stock Exchanges (AFE).
Strength and Growth
NBK enjoys a solid financial position based on a diversified and stable deposit base, strong capitalization ratios, high assets quality and comfortable liquidity levels, which reflect on the bank’s solid financial position and the continuous growth of its balance sheet as the growth of the bank’s assets reached about USD 100 billion by the end of last September, supported by the continuous growth in loan portfolio that reached USD 57.6 billion.
NBK is the largest financial institution in Kuwait and has de facto dominance in the commercial banking sector. NBK maintained the highest credit ratings among all banks in the region, from all global credit rating agencies: Moody's, Standard & Poor's and Fitch. NBK is also distinguished by its large local and global network.
Despite the COVID-19 pandemic, the bank has shown its ability to overcome crises and maintain its assets growth and financial strength. When the global financial crisis in 2008 proved the validity of NBK's strategic and investment choices and its ability to deal with unfavorable economic conditions, representing an example to follow at a time when a wide range of financial sector institutions in Kuwait and the region badly suffered.
Pride and Leadership
Skyscrapers usually cry for attention. However, in the new NBK headquarters, the bank did not aim at all to construct a building that competes as an ordinary building, but rather wanted to present an architectural icon that reflects NBK’s pride and leadership.
NBK has succeeded in providing an example for green modern architecture through its new headquarters building, which will be an inspiration for all remarkable engineering works for many years to come.
Additionally, the bank’s new headquarters represents an example of a workplace that takes into consideration all environmental and other sides, as it is a green building conforming to the standards of Leadership in Energy and Environmental Design (LEED) Gold certification, and all the building’s interior details make it not only a workplace but an integrated environment in which the employees feel themselves and their ability for self-realization.
Kuwait: NBK Honors Abdul-Latif Al-Hamad27.12.2020
National Bank of Kuwait (NBK) honored Mr. Abdul-Latif Yousef Al-Hamad in appreciation of his long journey of sincere efforts for over six decades, during which he presented an exceptional example that laid solid foundations for development work and Arab economic cooperation, and set the mechanisms to improve the quality of life of citizens in developing countries. Through this journey, he gave inspiring guidance for experts and economists in working for the good and prosperity of the societies of those countries, in which he is always remembered by officials as well as by the needy, as a symbol of development and stability.
The honoring was presented in a ceremony held at NBK’s HQ last Wednesday, in the presence of the bank’s board members, led by NBK Group Chairman, Mr. Nasser Al-Sayer, NBK Group CEO, Mr. Isam Al-Sager, and NBK Group Deputy CEO, Ms. Shaikha Al-Bahar, NBK-Kuwait CEO, Mr. Salah Al-Fulaij, and, NBK-Kuwait Deputy CEO, Mr. Sulaiman Al-Marzouq.
Al-Hamad was one of the key members of NBK Group’s International Advisory Board (IAB) established back in 2010, which is formed of a select of prominent international figures in politics, economics, business and strategy.
Al-Hamad’s name was associated with Kuwait’s charitable contributions and aids extended to the peoples of the world during his office as Chairman of The Kuwait Fund for Arab Economic Development (KFAED) over a period of 19 years during which he contributed to provide finance for various development projects in the Arab world and developing countries. This makes him one of the most prominent engineers of Kuwait's soft power on the economic level, as his work is still bearing goodness in the lives of many peoples to whom Kuwait extended a helping hand as part of its role as a leading country with instrumental contributions on the international scene.
Al-Hamad also contributed to the establishment of the Arab Fund for Economic and Social Development (AFESD), as he prepared and presented its establishment proposal at the Arab Summit in Khartoum in 1967. Later on, he was elected as Director General & Chairman of the Board of Directors of the Fund since 1985, and for 35 years, the Fund played a pivotal role in a number of mega development projects across many Arab countries, making him deservedly “the pioneer of Arab economic development”.
Al-Hamad's efforts received local and international recognition throughout his long career, as he was honored by many Arab kings, presidents and heads of government with the highest decorations and medals. Additionally, he was awarded honorary doctorate degrees from leading regional and international educational institutions, and his name was also given to many development institutions in regional countries.
Al-Hamad holds a rich and diverse record of academic degrees, starting from his study at Victoria College in Alexandria, the American University in Cairo (AUC), followed by a Master’s Degree in Economics from Claremont College. He also holds a BSc in Economics and a Master's Degree in International Relations from Harvard University and Stanford University in USA.
Al-Hamad’s career was also a example for a brilliant official with unforgettable footprint, since he served as a member of the Kuwait delegation to the United Nations in 1961, then the Director General of Kuwait Fund for Arab Economic Development marking the beginning of a long journey of giving that lasted for over 19 years. He also acted as a member of the International Development Association (IDA) of the World Bank, and contributed to establishing The Arab Investment & Export Credit Guarantee Corporation ((Dhaman) in 1965. Thanks to his experience in economic development, he was appointed as member of Brandt Commission formed by the World Bank to achieve development in developing countries in the late 1960s. He also held the position of Chairman the United Bank of Kuwait, Ltd., London (1981-1986), and served as Minister of Finance and Minister of Planning, Kuwait (1981-1983). His dedicated career journey continued until 2020, spanning 35 years, since he was chosen as Chairman of the Board of Directors of the Arab Fund for Economic and Social Development (KFAED) in 1985.
Kuwait: NBK Continues Contributing to Achieve Social Sustainability during 2020 despite the Pandemic23.12.2020
National Bank of Kuwait (NBK) continued during 2020 its social responsibility programs, especially in health and education areas, in order to support community efforts in addressing coronavirus pandemic and to continue its plans for sustainable development.
NBK succeeded in achieving astounding results with regard to its efforts to combat the pandemic on one hand, and maintaining its sustainability achievements on the other hand, through many contributions and initiatives covering various social fronts, particularly the health area.
The year 2020 reaffirmed NBK’s resistance in the face of crises, as the bank was committed to achieve sustainable development goals despite the pandemic, emphasizing the bank’s recognition of the dire need to work more than ever before for achieving sustainable development.
Community Engagement during COVID-19
KD 1 Million Donation to Provide Ventilators and Mobile Clinics
NBK donated KD 1 million to Kuwait Red Crescent Society (KRCS) as part of its humanitarian and social role to support in Coronavirus (COVID-19) pandemic response. NBK’s donation will be directed to support Kuwait Red Crescent Society’s efforts to purchase ventilators and the deployment of fully equipped mobile clinics to quarantined areas.
This donation comes as part of the bank’s commitment to social responsibility in supporting all efforts to combat the novel coronavirus pandemic, and underscores its constant support to voluntary and relief initiatives.
Employee Healthcare Program
NBK launched a special healthcare program for its employees starting from last June, which will continue to organize it, as part of its continuous efforts to preserve the mental and physical health of employees during the coronavirus pandemic.
To date, the bank launched, within this program, more than twelve health campaigns, directed to the healthy and patients, including General Health Campaign at the Times Of Pandemic, Family Health Campaign, Heart Health Campaign, Mental Health Campaign, Nutrition and Fitness Campaign, Sport and Fitness Campaign, Blood Test Campaign, E-Learning Challenges Awareness Campaign, Physiotherapy Campaign, Breast Cancer Campaign, Diabetes Campaign and Blood Donation Campaign, among others.
The program, in which about 13 physicians from therapists, specialists and consultants are participating so far, covers key areas including mental and general health, nutrition and physical fitness, in addition to physical fitness, in an effort to support the bank’s employees during these exceptional times.
The program provides medical consultations at the bank’s clinic and various online training and advisory sessions presented by certified trainers or specialized doctors, through the bank’s interactive platforms and social media channels.
The program features interactive content and virtual meetings that provide awareness medical consultations and advice by doctors and specialists. It also discusses health topics through online lectures, especially those posing a challenge during the period of fighting the pandemic.
The number of direct interactive sessions with doctors on social media platforms reached 10, while the number of awareness messages reached 200 health messages, and 439 visits from staff to the clinic to consult doctors and specialists.
NBK’s Children Hospital Exceptional Measures
In view of the current exceptional circumstances we are going through, as a result of covid-19 pandemic outbreak, NBK Hospital was quick to take all necessary precautionary measures to protect patients’ health by abiding the highest levels of occupational safety in this regard.
In addition, the hospital implemented many initiatives that ensure that patients receive due treatment and consulting services without being affected by the restrictions of partial and full lockdown during the peak of the pandemic.
In this context, since last March, the bank started to provide urgent reports in Arabic to help the families of patients in cases of emergency or any technical failure, as well as to obtain an official permit from the Ministry of Interior for going out during curfew period.
The hospital also assigned a direct telephone line available around the clock for communication with the patients' parents during that period, and activated all telephone system for all hospital clinics around the clock for checking the health of those who have an appointment in each clinic and providing them with the necessary medical advice.
Furthermore, the hospital provided appointment booking/changing service for outpatient clinics via WhatsApp during working days from 8 a.m. until 4 p.m. where a message with patient's information is sent to the hospital, including patient's name, file number, name of the treating doctor, civil ID number, and copy of the transfer to finalize all procedures without the need to come to the hospital.
Stem Cell Transplant
On a related level, the hospital staff succeeded in conducting the first stem cell transplant for a 3-year-old girl, despite the challenging times of the pandemic. The hospital team made hard efforts to prepare for the surgery, including obtaining and isolating stem cells from the patient, and undergoing surgery to remove the cancerous tumor, in addition to undergoing chemotherapy. This case is considered the first stem cell transplant conducted in Kuwait.
This achievement is the culmination of the efforts of the hospital's team, which includes specialized cadres trained according to the best international standards in providing healthcare services, which receives all kinds of support and appreciation from NBK.
It is worth mentioning that, in addition to its donation to establish the hospital, NBK contributes in supporting it by continuing to invest in developing all its units and sponsoring all its activities that go beyond treatment services to span various activities aiming to relieve the suffering of patients and their families.
Supporting Youth and Education
LOYAC: Online Training Programs: “KON” and “Career Ready”
NBK sponsored LOYAC’s program “Career Ready” organized by LOYAC in cooperation with HR management consultant and trainer, Amal Al Bedah, which aims to enhance the skills, capabilities and behaviors of the young workforce in the Kuwaiti labor market.
This program tailored to fresh graduates provided online virtual training, due to the exceptional circumstances of the pandemic imposing social distancing.
The program helps young graduates with transitioning to their own career paths with the skills and knowledge required in finding their purpose and career areas needed in Kuwait labor market.
The program included training courses and workshops to introduce fresh graduates with learning career choices, sectors and industries available in Kuwait, self-marketing techniques and tools to overcome career obstacles.
In addition, NBK sponsored LOYAC’s “KON” program for entrepreneurship, which provided 6 intensive training weeks for 64 participants. Mohammad Al-Othman, GM- Consumer Banking Group at National Bank of Kuwait, participated in the closing ceremony to honor the participants as well as the LOYAC’s curators.
NBK provided its platinum sponsorship for this program as part of the bank's strategic partnership with LOYAC organizing this program for the fourth consecutive year, in cooperation with Babson College, with the aim of supporting students by motivating them to achieve leadership and innovation with projects serving the advancement of community.
More than 29 male and female interns aging from 12 to 16 years, participated in “KON” 2020 program that consisted of online training sessions, discussions, lectures and virtual workshops.
In partnership with “Creative Confidence”, NBK launched program “Tamakkan” for training fresh Kuwaiti graduates and qualifying them to the labor market. The trainees were welcomes NBK’s Executive Management and Creative Confidence’s officials.
The program was designed to accommodate 40 trainees. NBK’s participation affirms its keenness to provide unique and exceptional opportunities to Kuwaiti talents. The program ran for 10 weeks, until 20 April 2020. This program requires full commitment from trainees being a full-time job experience. NBK participated in this program as a strategic sponsor, while Creative Confidence provides trainees with training designed to enhance their skills to become active workforce.
This year, the program boasted success despite the pandemic, by using the approach of live online classes.
NBK launched various awareness campaigns to celebrate national, social, and international health occasions. These campaigns included National Day, Breast Cancer Awareness Month, World Diabetes Day, Mother's Day, International Day of Peace, International Day of Charity, International Nurses Day, and International Day for the Elimination of Violence against Women. NBK also launched Back to work campaign during COVID pandemic.
On the level of community-related sponsorship which mainly include Bayt Abdullah for the Care of Children in Hospice (BACCH), Center 21 for Youth with Mental Disability aiming at rehabilitating, developing them as well as rectifying their behavior and mainstreaming them into the society, in addition to other humanitarian, social and educational entities.
“Winter supplies” Campaign
NBK made an in-kind donation to Kuwait Red Crescent Society (KRCS) to support needy families as per the usual practice every Winter within “Winter supplies” Campaign. This campaign aims to offer a warm winter for more than 30 low-income families by distributing aids to secure their necessary needs to face extreme weather conditions like other families in Kuwait.
Kuwait: NBK Successfully Redeems KD125 Million 2015 Subordinated Tier 2 Bonds and Issues KD150 Million 10NC5 Subordinated Tier 2 Bonds19.11.2020
The National Bank of Kuwait S.A.K.P. (“NBK” or the “Bank”) successfully closed its issuance of Basel III Compliant KD150 million 10NC5 Subordinated Tier 2 Bonds (the “Bonds” or the “Issuance”), rated Baa1 by Moody’s, on November 18, 2020. The Bonds replaced the Bank’s KD125 million Subordinated Tier 2 Bonds issued in 2015, which were redeemed on their first call date on November 18 2020 (the “Redeemed Bonds”). In addition to replacing the Redeemed Bonds, the Issuance will further enhance the Bank’s Tier 2 portion of its regulatory capital.
The 10-year non-callable 5-year Bonds will mature in 2030 and are equally allotted between a fixed rate and a floating rate tranche. The fixed rate tranche has a coupon of 4.75% per annum for the first five years, and will have a coupon of 3.25% over the prevailing CBK Discount Rate for the subsequent period. The floating rate tranche has a coupon of 3.00% over the CBK Discount Rate per annum, capped at 1.00% over the fixed rate tranche, and determined semi-annually. Both tranches have semi-annual coupon payments.
The subscription period for the Issuance lasted from 27 October 2020 to 11 November 2020, during which the Bonds attracted diverse and healthy demand from Institutional and Individual investors, reaching a peak orderbook of KD228.3 million (oversubscription of 1.52x) from more than 200 respective investors. Investors in the Redeemed Bonds had the option to rollover into the Bonds, which resulted in 39.7% of the value of the Redeemed Bonds being rolled-over.
The Issuance marks the first liability management transaction on a KD-denominated Basel III Compliant Tier 2 Bond issuance and the largest local bond issuance actively marketed to fixed income investors on a private placement basis, to date.
NBK appointed Watani Investment Company K.S.C.C. (NBK Capital), Gulf Bank K.S.C.P. (Gulf Bank), Kamco Investment Company K.S.C.P. (Kamco Invest) and Kuwaiti Financial Center K.P.S.C. (Markaz) as Joint Lead Managers for the Issuance.
NBK also priced an issuance of Regulation S US$300 million Resetting Subordinated Tier 2 notes due 2030 (the “Notes”) through its wholly owned DIFC prescribed company, NBK Tier 2 Limited. The Notes mark the first US$ Basel 3 compliant Tier 2 from Kuwait and were rated Baa1 by Moody’s. The Notes offer semi-annual coupon payments set at 2.50% per annum and have a reset date of 24 November 2025.
The transaction achieved a peak orderbook of over US$1.1 billion, translating to an oversubscription of over 3.6x, from more than 80 investors. The robust demand for the Notes allowed NBK to price the lowest Tier 2 coupon by a GCC bank and the 6th lowest coupon on a Tier 2 10NC5 globally at 2.50% (5-Year US Treasury rate + 210.8bps). The transaction achieved a diverse final allocation lead by UK investors at 42%, Asia at 27%, MENA at 14%, Europe at 12%, while US (Offshore) accounts made up 5%. Asset Managers dominated the placement, making up 82%, followed by Banks at 10%, then Insurance companies and Private Banking at 5% and 3% respectively.
NBK appointed Watani Investment Company K.S.C.C. (NBK Capital) and Citigroup Global Markets Limited as Global Coordinators and Joint Lead Managers.
The Notes will further boost NBK’s capital position, reasserting the buffer on the Bank’s capital adequacy ratios, in line with its historically conservative approach towards capital management.
The oversubscription for both issuances reflects the strong demand for NBK paper in the global markets and the Bank’s strong credit profile despite the challenging times.
Kuwait: NBK Inks MoU with Italian Export Credit Agency (SACE)15.11.2020
National Bank of Kuwait (NBK) signed a memorandum of understanding with Italian Export Credit Agency (SACE) for cooperation in the area of supporting the business sector, offering the best financing solutions for Italian companies engaged in development projects and trade, with special focus on sustainability projects, and providing finance-related training and technical assistance, as part of the efforts to strengthen trade and investment relationships between Kuwait and Italy.
The MoU was signed virtually in the presence of Mr. Salah Al-Fulaij, the Chief Executive Officer of National Bank of Kuwait - Kuwait, Mr. Pierfrancesco Latini, the Chief Executive Officer of Italian Export Credit Agency )SACE(, Mrs. Michael Ron, the Chief International Officer at Italian Export Credit Agency (SACE), and Mr. Carlo Baldocci, the Ambassador of Italy to Kuwait.
On this occasion, Mr. Salah Al-Fulaij, the Chief Executive Officer of National Bank of Kuwait - Kuwait commented: “We are pleased to sign this memorandum of understanding with the Italian Export Credit Agency (SACE). This reflects our instrumental role in financing infrastructure development projects and oil and gas sector in Kuwait, as well as promoting and enhancing trade flows between Kuwait and Italy."
Al-Fulaij indicated that this cooperation would help provide new means to support Italian companies, with which the bank aspires to build stronger partnerships, as well as contribute to mitigating some of their financial risks, noting that NBK has strong and well-established relationships with foreign companies operating in the Kuwaiti market, making us the bank of choice for their dealings, thanks to our strong financial position and broad geographical footprint.
National Bank of Kuwait is the house bank for the dealings of almost all Italian companies doing business in Kuwait. NBK has also participated in many initiatives and activities of the Italian Export Credit Agency (SACE).
Italy is a major trading partner for Kuwait, as many of the leading Italian companies are working on various development projects in the infrastructure, oil and gas sectors, whereas Kuwait’s cooperation with Italy comprises the areas of crude oil refining and distribution. The two countries seek to boost the volume of mutual trade, as Italy ranked eighth in the list of exporting countries to Kuwait during the past year.
It is worth mentioning that National Bank of Kuwait recently succeeded in leading and arranging a number of mega facilities in Kuwait and the Middle East, the last of which was a financing facility agreement for Kuwait Petroleum Corporation (KPC) amounting KD 1 billion, where NBK was the arranger of the conventional tranche, with a share amounting KD 370 million of the syndicated facility.
Additionally, NBK was recognized as “the Best Trade Finance Bank in Kuwait in 2020” by Global Finance, the renowned international finance magazine. The rankings were based on input from industry analysts, corporate executives and technology experts all over the world.
Kuwait: NBK Reports a Net Profit of KD 168.7 million for the First Nine Months of 202026.10.2020
Kuwait, 26 October 2020: National Bank of Kuwait (NBK) posted a net profit of KD 168.7 million (USD 550.9 million) for the first nine months of 2020, compared to KD 302.2 million (USD 986.8 million) for the same period last year; dropping by 44.2% year-on-year.
As for the three months period ended 30 September 2020, the bank recorded a net profit of KD 57.6 million (USD 188.1 million) which included a one-off profit from the sale of the Bank’s old headquarter. 3Q2020 profits grew at 72.3% when compared to 2Q2020 profits while recording a year-on-year drop of 38.1% compared to 3Q2019.
Commenting on the Bank’s results for the first nine months 2020, Mr. Nasser Al-Sayer, The Chairman of the Board of Directors of National Bank of Kuwait, said: “The negative effects due to the outbreak of COVID19 remained the main highlight of the global economic scene despite some signs of recovery during the third quarter. An economic downturn in the GCC was much felt with lower oil prices pressuring fiscal positions.”
Al-Sayer pointed out that despite the challenging operating environment, and its clear impact on the profits of the banking sector, the Bank’s financial results during the first nine months of the year demonstrated the Bank’s flexible business model and solid position, while continuing to benefit from its diversification and digital transformation strategies. This underpins the Bank’s ability to withstand the fallout of the crisis, and to continue growing its profits as we gradually move ahead to a recovery phase.
Al-Sayer added that, in light of these exceptional circumstances, and through its highly professional cadres, the Bank continued providing support to its customers through financing, advisory and top-tier banking services; enabling them to overcome their challenges and meet their long-term obligations.
Al-Sayer affirmed that NBK remains committed towards all stakeholders under all circumstances. The Bank’s mission is to provide top-tier banking services to its customers, maximize the benefit to its shareholders, and perform its social responsibilities. This was clearly demonstrated since the outset of the crisis as we have been regularly supporting the government’s and civil society’s efforts to contain the pandemic. In addition, NBK is committed to implementing the principles of sound governance, which is a cornerstone of sustainable development for all of the Bank's business.
Al-Sayer extended his thanks and appreciation to NBK employees for the exceptional efforts, sense of responsibility and teamwork spirit they showed during these exceptional circumstances. Their efforts continue to be a source of pride, and proves that NBK's human capital is the key pillar for achieving the Group’s future goals and long-term vision.
Al-Sayer concluded: "On behalf of the Bank’s board members and all employees, we mourn with great sadness and sorrow the demise of HH the late Emir of Kuwait, Sheikh Sabah Al Ahmad Al Sabah. We are confident that his successor, HH Sheikh Nawaf Al Ahmad Al Sabah, the Emir of Kuwait, shall continue the legacy towards a prosperous future and stability for Kuwait.”
On his part, Mr. Isam Al-Sager, NBK Group CEO said: “NBK’s operations are not fenced from the repercussions of the pandemic on economic activity. However, our financial results demonstrate the success of our proactive strategy that we started years ago, aiming to diversify income sources and to increase our digital reach. Moreover, our financial performance during those critical times also reflect our prudential risk management and success in building a flexible business model that is capable of withstanding abnormal conditions and realizing the utmost benefits from future recovery.”
"Despite the consequences of the crisis we remained committed to our conservative approach. During the first nine months of the year, we continued building provisions in anticipation of the expected uncertainties and the difficult operating circumstances across many sectors. Our provision and impairment charges increased by 98.4% year-on-year for the nine months period.” Al-Sager indicated.
Al-Sager added that NBK enjoys a solid financial position thanks to its diversified and stable deposit base, strong capitalization, high asset quality and comfortable liquidity levels. Furthermore, the strong financial position was reflected in the growth of the Bank's balance sheet, as both, loan portfolio and customer deposits achieved remarkable growth during the first nine months of the year.
Al-Sager also highlighted that the Bank’s approach towards cost cutting is to strike a balance between key efficiency initiatives at the Group level to mitigate the impact on profitability, while continuing to invest to achieve our strategic expansion goals in key markets. Moreover, the accelerated implementation of the Bank’s Digital Transformation Roadmap contributed to the launch of many digital banking services and advanced payment solutions over the past months, which were well-received by all customer segments.
Concluding his statements, Al-Sager stressed that NBK has always managed to overcome exceptional circumstances and is able to utilize its resources to be the largest beneficiary from opportunities created amid economic recovery.
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.