KUWAIT CITY, May 3: Kuwait Finance House (KFH) CEO Mohammed Al-Omar asserted that KFH is committed to support Aref Group until its regains its status and real value, and stated that the group is financially covered, which prompted KFH that holds 52% of the group, to become the leading bank and to reschedule Aref’s debts that reached USD 450 million.
He explained during an interview with CNBC Arabia that Aref’s short-term debts were turned into long-term debts that range between 18 months and five years, in order to allow the company to restructure its investments. He added that a whole team monitors Aref’s work day by day, and that full support is given to its CEO Ibrahim Al-Khozam. Regarding the affects of Aref’s losses on KFH, he explained that most of the losses are book losses and not real, in addition to the fact that Aref’s budget is merged into KFH’s budget every quarter, which means that there will be no sudden or drastic effects on KFH’s budget, which is evident by KFH’s Q1 profits, especially that the provisions that KFH has taken in the first three months of 2010 are 50% only of what it had taken last year; and this shows that the bank does not require high provisions.
Concerning the performance of KFH-Malaysia, Al-Omar announced that the bank was affected among the rest of the financial institutions that suffered from the financial crisis, but the bank was restructured according to the current circumstances, and a female CEO was appointed. He expressed his optimism that KFH-Malaysia will recover and improve its performance in the coming period, which is evident by a growth in assets by 7%, in addition to 17% growth in deposits, and 30% in shareholders’ equity. The total revenues reached MR 485 million and MR 162 million were distributed among shareholders.
He noted that KFH is capable of absorbing sporadic negative impacts because of its outstanding performance in numerous locations, such as Turkey, where KFH-Turkey’s revenues have become 47% in 2009, earning per share reached 24%, and deposits reached 35%. Thus, despite some negativity, KFH managed to achieve KD 168 million as operational profits for the Q1 of this year, due to its overseas expansion strategies. He added that overseas revenues reached 42% in 2008 of KFH’s revenues, while it reached 53% in 2009, which proves the success of KFH’s long and short-term strategies.