Kuwait, 26 July 2016: Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al-Marzouq said that KFH has, by the grace of Allah, realised a net profit of KD70.9 million (USD236.33 million) for the first half of 2016 for KFH shareholders as compared to KD62.3 million (USD207.66 million) for the same period last year i.e. an increase of 13.6%.
Total operating revenues for H1 this year reached KD322 million (USD1.07 billion) i.e. a growth of 4.4% compared to the same period last year. Net operating revenues reached KD166 million (USD553.33 million), i.e. a growth of 14.4% over the same period last year. Net finance revenues grew 13% over the same period last year after excluding ALAFCO deconsolidation impact.
On 30 June 2016, the Board of Directors of the Bank approved to sell Group's interest in its subsidiary Aref Investment Group (AIG). As a result, the assets and liabilities of AIG presented as assets classified as held for sale and liabilities directly associated with the assets classified as held for sale amounted to KD356 million (USD1.19 billion) and KD174 million (USD580 million), respectively. According to this presentation, the total operating revenues decreased from KD325 million (USD1.08 billion) to KD322 million (USD1.07 billion), while the net operating revenues increased from KD159 million (USD530 million) to KD166 million (USD553.33 million). Earnings per share for the first half of 2016 reached 13.74 fils compared to 12.09 fils over the same period last year i.e. an increase by 13.6%.
Earnings per share from continuing operation (after excluding the impact of AIG) reached 17.24 fils compared to 11.02 fils over the same period last year i.e. an increase by 56.4%. Total assets reached KD17.03 billion (USD56.76 billion) i.e. an increase by KD534.9 million (USD1.78 billion) or 3.2% compared to year ended 2015. Finance portfolio reached KD8.45 billion (USD28.16 billion) i.e. an increase by KD354.6 million (USD1.18 billion) or 4.4% compared to year ended 2015. Total deposits reached KD14.12 billion (USD47.06 billion) i.e. an increase by KD359.8 million (USD1.2 billion) or 2.6% compared to year ended 2015. Shareholders' equity reached KD1.77 billion (USD5.9 billion) for H1 this year. KFH's capital adequacy ratio (CAR) reached 17.21%, higher than the required limit of 13%, thus reiterating the strength of KFH financial position.
Al-Marzouq said that the realised profits are in line with the ambitious strategy to ensure the achievement of a sustainable growth rate, yet to achieve integration of its businesses at the Group level. The profits reiterated the bank's resilience to adapt with the markets' volatility which reflects the balanced performance and robust financial position of the bank. KFH continued to manage risk efficiently and set aside the required provisions in accordance with the best practices. This reflects its strong financial position and high liquidity levels.
Al-Marzouq added that the global economy has lately witnessed a historic remarkable event after the UK voted for Brexit to leave the European Union. This might result in economic and political repercussions and instability as the UK is still the second largest economy in the EU and normally a role model for all unions to follow suit. Al-Marzouq expressed his confidence in the potentials of the Kuwaiti economy to confront any repercussions resulting from the Brexit especially at the level of the banking system. The Kuwaiti banks are armed with high levels of liquidity and quality assets, yet they operate in a stringent regulatory environment. Despite the said repercussions, the UK will remain a potential mouth-watering investment destination, and the crisis might offer several genuine investment opportunities in many fields.
He added that KFH-Group successfully assumed its development and financial role in the markets in which it operates. KFH signed agreement with Kuwait National Petroleum Company KNPC to finance the Clean Fuel Project of KD1.2 billion (USD4 billion) as the leader of Islamic lenders. This reaffirms KFH's ability to serve the development plans and support the development process while positively participating in the development project of the country to reinforce the role of the private sector. KFH offered financing to Mabanee Company to execute the new phase of Avenues mall in efforts to bolster cooperation with the private sector and its mega projects. Benefiting from the efforts of the Government of the Kingdom of Bahrain to encourage the private sector to contribute in the development process, KFH-Bahrain inked several financing agreements for several real estate development projects in collaboration with local banks and its subsidiaries. KFH-Turkey is leading an alternative financing market relying on the Sukuk product as a major instrument for corporate and sovereign credit. It issued a lease certificate (sukuk) of TL300 million (USD98.68 million) which is the largest sukuk for private sector in the Turkish market. Entering the sukuk market in 2010, KFH-Turkey has, so far, issued lease certificates of a total of TL7.2 billion (USD2.36 billion).
KFH continues its unremitting efforts in strengthening its role in boosting the national economy, primarily through corporate finance as per the credit and legislative regulations. The bank works tirelessly to settle companies' debts while preserve and enforce shareholders' rights. KFH has settled many debts and negotiations for settling other debts are taking place. Al-Marzouq stressed the ceaseless efforts of KFH to continuously offer credit facilities for SMEs in an attempt to encourage the youth's initiative as well as to diversify income resources. KFH has the largest share of SMEs segment that has an important social and economic role, not to mention comes in line with KFH's methodology of supporting the development activities in the country.
KFH has maintained its foothold as a pioneering entity in utilising the latest technologies in collaboration with global companies and the best technology advisers to meet the requirements of its clients and cater for their aspirations. He reiterated that KFH insures applying all technological applications and platforms as per the highest standards of security and accuracy, stressing the significant role of the human resources. KFH spares no efforts in hiring, training, and qualifying its human resources whilst preparing the distinguished national employees for leadership positions. KFH has a proven track record in this regards in collaboration with the concerned parties. It won 'The Best Training Plan' award from Manpower& Government Restructuring Program.
Al-Marzouq expressed his thanks and appreciation to all shareholders and clients for their support and confidence. He hailed the efforts of KFH's executive management and employees for their outstanding performance that yielded positive results, emphasizing the importance of maintaining the leadership position at all indicators.
KD = Kuwaiti Dinar
TL = Turkish Lira
USD1 = KD0.30 (Bloomberg)
USD1 = TL3.04 (Bloomberg)
1000 fils = KD1