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NBK Q1 net profit up 3.2% to $298mn Results reflect bank’s strong financial position, exceptional asset quality and prudent strategy: Al-Sager

KUWAIT CITY, April 13: National Bank of Kuwait (NBK), the largest Kuwaiti bank, reported net profits of $298 million (KD 83.9 million) in 1Q2014 compared with $289 million (KD 81.3 million) in 1Q2013, up 3.2% year-on-year. As of end 1Q2014, NBK Group’s total assets reached $72.8 billion (KD 20.5 billion) up 13.1% compared to March 2013, whilst total shareholders’ equity increased by 4.5% year on year to $8.8 billion (KD 2.47 billion). Loans and advances reached $38.9 billion (KD 10.95 billion) at end 1Q2014 up 9.6% compared to same period last year, while customer deposits reached $39.5 billion (KD 11.12 billion), up 12.9% compared to last year.

Asset quality ratios continued to improve with Non-performing loans (NPL) to gross loans ratio dropping to 1.93% at end 1Q2014 down from 2.72% a year earlier and NPL coverage ratio increased to 203% as at end 1Q2014 up from 156.1% last year. Isam Al-Sager, NBK’s Group Chief Executive Officer said “NBK’s profits for the quarter are a further confirmation of NBK’s capacity to deliver growth, thanks to its strong financial position, exceptional asset quality levels and conservative approach to management.” Al-Sager also highlighted that NBK’s 1Q2014 profits are mostly driven by the growth in core banking business “We continued to focus on core banking business across our locations. In 1Q2014 NBK’s net operating income grew by 7.6% year on year to $563 million (KD 158.4 million),” Al-Sager added. 

Al-Sager also pointed out the overall improvement in the operating environment in Kuwait and how this is reflecting on NBK’s growth outlook and business sentiment. “We have recently been witnessing an improvement in the business environment in Kuwait. More of the larger infrastructure projects are being awarded and work is being done at a faster pace. This all will reflect on the business sentiment and improve the outlook for the private sector. We hope this trend will continue going forward with more government spending on projects and infrastructure development”. Al-Sager added.

On the strategy side, Al-Sager confirmed NBK’s strategic direction focusing on income diversification. “The implementation of our regional and international strategy remains on track. We continue to focus on the GCC markets to leverage NBK’s strong franchise there. On that front, NBK has recently opened its new UAE head office in Dubai following the inauguration of business in Abu Dhabi branch in 2013. In 1Q2014 NBK Group’s international banking profits grew by 15.5% year on year confirming the strength of NBK’s international operations. Moreover, expansion into Islamic banking through the acquisition of 58.4% of Boubyan Bank continues to pay off as Boubyan’s contribution to the group’s profitability and balance sheet increases over time,” Al-Sager commented.

The bank’s vice chairman Nasser al-Sayer said last month that Kuwait’s domestic operating environment was improving. The market is seeing some acceleration in the tendering, award and execution of some large infrastructure projects. NBK continues to enjoy collectively the highest ratings among all banks in the Middle East from the three international rating agencies Moody’s, Fitch Ratings and Standard and Poor’s. The Bank’s ratings are supported by its high capitalization, prudent lending policies, and its disciplined approach to risk management, in addition to its highly recognized and very stable management team.

NBK was also named among Global Finance’s list of the 50 safest banks in the world for the eighth consecutive time. NBK enjoys the widest banking presence with an international network reaching 170 branches worldwide. NBK’s international presence spans many of the world’s leading financial centers including London, Paris, Geneva, New York and Singapore, as well as China (Shanghai). Meanwhile, regional coverage extends to Lebanon, Jordan, Iraq, Egypt, Bahrain, Qatar, Saudi Arabia, the UAE, and Turkey.

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