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CBK posts net profit of KD 13.2 mln in H1 Total assets reach KD 4.0 billion

KUWAIT CITY, Aug 3: The first half of 2014 earned Commercial Bank of Kuwait an operating profit of KD 49.6 million, before provisions (KD 50.8 million in first half of 2013). KD 35.8 million of these profits was allocated as specific and judgmental provisions against the loan and investment portfolios, leading to a net profit of KD 13.2 million for first half of 2014, which was KD 5.5 million higher than that in the first half of 2013 (KD 7.7 million).  Yacoub Al Ebrahim, the bank’s official spokesman, stated NPL to total loan portfolio ratio dropped to 1.34% in June 2014 from 2.04% in June 2013 (December 2011: 6.69%, December 2012: 2.76% and December 2013: 1.35%).

Being the key indicator of loan portfolio quality with banks, Al Ebrahim indicated the Bank’s efforts to maintain the lowest ratio during the current year. He highlighted that this ratio is significantly lower than the 3.2% that of the Kuwait banking sector at the end of 2013. As on 30 June 2014, the total provisions held with the bank were KD 133.1 million, with a provision coverage ratio of 388% against problem loans (December 2011: 92%, December 2012: 169% and December 2013: 367%), which is the best in Kuwait banking system and exceeds the average ratio in the banking sector. This is in line with the bank’s aim is to build a strong provision base by underpinning its provisions, and to proactively recognize any problems regarding loan and investment portfolios.

AL Ebrahim added that the total assets reached KD 4.0 billion, with shareholders equity of KD 561.1 million ( KD 553.0 million in December 2013). The minimum capital adequacy ratio mandated by the Central Bank of Kuwait (12%) was exceeded with a ratio of 17.66 % at the end of June 2014. This is also more than twice the minimum ratio required by Basel Committee. Additionally, the bank has plans in hand to issue subordinated bonds of KD 120 million in the near future which will solidify the Bank’s capital base on the one hand and give further boost to its business activities and operations on the other hand. After Central Bank approval, the Capital Market Authority has also extended its initial approval for the issuance of these bonds.
Commercial Bank of Kuwait continues to demonstrate its operational efficiency and cost leadership, with a cost to income ratio of 26.9% for the first half of 2014. Al Ebrahim concluded his statement by explaining that the growth in profitability, assets quality, and other financial indicators is due to the prudent and conservative strategy adopted by the bank’s management during the previous years which started to reap good results, emphasizing that the bank shall continue to pursue a balanced strategy to maintain and solidify those indicators to achieve the goals and aspiration of its shareholders.

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