Kuwait: Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al Marzouq announced that KFH achieved a net profit of KD 162.8 million for the first quarter of 2024 for shareholders, representing an increase of 0.5 percent compared to the same period last year, while the comparative period last year included revenues and profits from sale of investments amounted to KD 74.3 million, most of which were non-recurring and were not realized during the current period, and an increase of 32.4 percent compared to three months period ended Q4 2023.

Earnings per share for the first quarter of 2024 reached 10.24 fils; an increase of 1 percent compared to the same period last year. Net financing income for the first quarter of the year reached KD 263.4 million; an increase of 17 percent compared to the same period last year. Total operating income for the first quarter of the year increased, supported by the increase in all core activities to reach KD 392.4 million; an increase of 3.5 percent compared to the same period last year, and an increase of 14 percent compared to Q4 2023.

Financing receivables as of the end of the first quarter of 2024 reached KD 18.9 billion, affected by the classification of Kuwait Finance House - Bahrain as assets held for sale, as well as the impact of foreign currency fluctuations during the current period. Total assets for the first quarter of the year amounted to KD 37 billion, Shareholders’ equity amounted to KD 5.3 billion at the end of the first quarter of 2024. Depositors’ accounts as of the end of the first quarter of 2024 amounted to KD 20 billion. In addition, the capital adequacy ratio reached 17.77 percent which is above the limit required by regulators. This ratio confirms the solid capital base of KFH.

High profitability

Al Marzouq highlighted KFH’s successful achievement of its Group strategy’s key goals, further solidifying its leading position. Strong financial performance, evident in high liquidity ratios, a solid capital base, and robust operating performance, drove growth in operating income, profits, the financing portfolio, and all key financial indicators. The acquisition of Ahli United Bank-Bahrain further bolstered these positive trends, propelling KFH to its highest ever profit rates in the Kuwaiti banking sector.

Largest market cap

Al Marzouq revealed that KFH holds the top spot in Kuwait and ranked fourth in the Middle East in terms of market capitalization which exceeded KD 12 billion.

Unprecedented deal

Al Marzouq noted that KFH is focused on achieving sustainable profitability by pursuing a strategy of innovation and digital transformation to create added value. The bank also expands its customer base and promotes harmony among its Group subsidiaries across 12 geographies, including Kuwait, Bahrain, Turkiye, Egypt, the UK, Germany. This network is supported by approximately 630 branches and nearly 2,250 ATMs, contributing to further profitability and strengthening its financial position, in addition to ongoing talent acquisition and retention.

He emphasized that the acquisition of AUB - Bahrain represents an unprecedented deal in Kuwait’s banking sector. This will bolster Kuwait’s financial standing, establishing it as the headquarters of one of the leading and dominant banks in the Middle East and world-leading Islamic bank. Additionally, it is expected to increase the national employment rate and create new job opportunities within the local market.

Financing mega projects

Al Marzouq emphasized that KFH is committed to providing financing to companies and mega projects locally and regionally, as well as supporting SMEs and micro-enterprises. This commitment is reflected in their diversified and solid financing portfolio. He pointed out that during the first quarter of the year, KFH successfully implemented a number of financing projects. Notably, KFH acted as the lead financier for the Beyout Plus project, a KD 100 million complex with a commercial area of 250,000 square meters in Mutlaa Residential City.

API Technology

Al Marzouq mentioned that KFH is leveraging cutting-edge technologies in the banking industry such as robotics and AI to streamline back-office operations, utilizing big data analytics for innovating products and services that meet customers aspirations. He highlighted KFH’s keenness to cooperate with fintech companies, utilize emerging technologies in its digital transformation journey according to the best and latest global standards and in compliance with the regulatory controls and guidelines.

KD 38 million contribution

Al Marzouq highlighted KFH’s prominent role in society, emphasizing its policies and goals that reinforce strategic social initiatives with significant added value. These initiatives include contributing KD 8 million to the reconstruction of Al Mubarakiya. KFH further demonstrated its commitment by participating in the national campaign to help defaulting debtors. Their contribution consisted additional funds amounting to KD 7 million, bringing the total to KD 38 million since 2019. Additionally, KFH partnered with the Kuwait Food Bank, pledging KD 1 million to support underprivileged families in Kuwait. These are just a few examples of KFH’s many social responsibility initiatives. In recognition of its leadership in this area, EMEA Finance awarded KFH the Corporate Social Responsibility - Middle East Award.

Financial soundness

KFH Acting Group Chief Executive Officer, Abdulwahab Iesa Al Rushood, confirmed that KFH’s Q1 2024 financial statements demonstrate financial soundness and growth. This is evident in several indicators, such as profitability, value and quality of assets, capital adequacy, and liquidity ratios, all of which have improved compared to the same period in 2023. KFH also saw an increase in operating profits and diversification of its revenue streams. Furthermore, KFH has successfully maintained a healthy coverage ratio for non-performing debts and a favorable cost-to-income ratio.

US$1 billion Sukuk

“As one of the most important financing tools in global markets, Sukuk is a key focus for KFH. Demonstrating this commitment, KFH successfully issued a 5-year Senior Unsecured Sukuk of $1 billion. This is the first issue under KFH $4 billion Sukuk Program,” Al Rushood said. Meanwhile, KFH maintained its leading position in the primary and secondary markets for the Sukuk issuance of the International Islamic Liquidity Management (IILM) Sukuk Program. KFH achieved the top rank amongst the IILM primary dealers.

Convenient banking experience

Al Rushood emphasized that KFH maintains its excellence in digital transformation strategy and leadership in offering innovative digital services and financial solutions. These solutions are available through the KFH Online app (mobile and website), XTMs, and KFH-GO branches. He added that KFH recently launched TAM, the first Islamic digital bank in Kuwait, and Zaheb, the digital payment platform. These are just a few examples of KFH’s commitment to providing a convenient and exceptional banking experience for its customers.

Sustainability and green finance

“KFH strengthens its leadership position by prioritizing sustainability within its core business in Kuwait and its subsidiaries. The bank has a proven track record in leading and arranging green Sukuk issuances. It has also financed and participated in numerous environmentally friendly projects and deals. These actions align with KFH’s vision of providing sustainable financial solutions and creating positive social and economic impacts,” Al Rushood explained.

Renowned achievements

Highlighting KFH’s achievements, Al Rushood announced the bank’s win of several prestigious awards during the first quarter. These included Best Islamic Bank - Middle East, Best Bank in Kuwait, and Best Islamic Bank in Kuwait from EMEA Finance magazine. The awards serve as a testament to KFH’s leadership in the banking industry, geographic expansion, and strong brand reputation. They further recognize the bank’s successful strategic relationships, creditworthiness, and its commitment to delivering innovative solutions and exceptional financial products and services.

Trusted partner

In conclusion, Al Rushood expressed confidence in sustaining the bank’s strong and positive results. He thanked shareholders, customers, and the Board of Directors for their trust and support. He acknowledged the important role of the Central Bank of Kuwait and regulatory authorities, and praised the efforts of employees, partners, and all stakeholders. Al Rushood emphasized KFH’s commitment to strengthening its position as a leading Islamic bank and a trusted partner for its customers and the community.