KIB 2015 net profit rises 17% to KD 16.1 mln – Assets up 8% to reach KD 1.79bn; Board recommends cash dividend of 9 fils per share

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KUWAIT CITY, March 28: The Kuwait International Bank (KIB) announced a profit of KD 16.10 million for the year ending Dec 31, 2015, which is a 17 percent increase year on year as the 2014 profit was KD 13.70 million.

Speaking at the Annual General Meeting held at the bank’s head office in Mirqab, Chairman Mohammad Jarah Al-Sabah said the growth comes in spite of the accelerating global ad geopolitical developments, particularly in the Middle East region and the resultant repercussions which imposed further challenges in the operational environment during 2015.

Accordingly, earning per share has been increased to 17.14 fils from 14.65 fils year on year. KIB continued to implement its plans aimed at increasing and diversifying the sources of income along with an expansion of its franchise. The board of directors, executive management and bank staff bear in their mind to realize positive growth levels in all key performance indicators.

This goal has been achieved by expanding the scope of Islamic Banking products and services to serve various economic sectors in Kuwait as well as expanding the bank’s customer base and reaching out to them all over Kuwait. As such, KIB pursued its plans intended to accomplish a domestic expansion and therefore inaugurated two new branches during the year, bringing the total number of branches to 28 at the end of 2015. In parallel fashion, this coincided with the expansion in automatic teller machines (ATMs) to reach 91, and the point-of-sale devices increased by 8 percent. Accordingly, KIB continued to diversify, develop and innovate products tailored to its esteemed retail customers.

Highlighting the bank’s most significant achievements of the year 2015, the chairman said in 2015, KIB’s board of directors and its executive management adopted a comprehensive and promising strategic 8-year plan for the period 2015-2020. This strategy was based on a group of pillars taking into consideration the accelerating development affecting the operational environment of banks, and he uncertainty status expected to overwhelm the global economic environment in the coming few years.

The strategy intends also to develop the capability and efficiency of the bank’s internal processes in order to adapt with any future developments, in furtherance of the bank’s endeavors to improve asset quality, maximize shareholders’ returns, and continue to apply the state-of-the-art and safest banking business practices in order to realize a positive shift in the quality of services rendered to the bank’s customers and expand its franchise in future.

In this context, KIB plans to become the fastest growing Islamic Bank in the State of Kuwait, the first choice to customers seeking Islamic Shari’a compliant advanced banking and the most attractive financial institution for skilled national labor. The year 2015 witnessed the launch of this strategy and its inception, whereby measures have been taken to enhance the bank’s organizational structure, in addition to a full revision and development of the bank’s franchise and activities. This has been positively reflected on the bank’s performance and financial indicators. As for the second stage of the implementation of the strategic plan, extending throughout 2016, the bank will focus on the improvement of the products and services rendered to customers and on the improvement of the effectiveness and efficiency of its internal operations.

On growth and improvement of asset quality, Chairman Al-Sabah stated that KIB’s assets rose 8 percent on annual basis to reach KD 1.79 billion, compared to KD 1.66 billion at the end of 2014, which is an increase of KD 127.50 million. In this context, funding portfolio rose by KD 100 million to reach KD 1.17 billion, compared to KD 1.07 billion, and thus realized a growth of 1.03 percent year on year. Deposits increased to KD 1.02 billion compared to KD 989 million, which is an increase of KD 29 million year on year.

Asset quality remarkably improved whereby the positive performance of KIB in 2015 was reflected on the ration of the non performing financing to record a substantial decline by 71 percent, bringing the non performing financing out of the total financing to 1.43 percent compared to 4.97 percent at the end of the previous year, and the coverage ratio of total provisions rose to 199 percent compared to 67 percent at the end of 2014. Furthermore, the coverage ratio of total provisions and collaterals rose to 327 percent compared to the previous year’s figure of 227 percent , thereby reflecting a marked improvement in KIB’s asset quality in 2015.

With regards to income growth and improvement in expense control, Chairman Al Sabah said the efforts exerted by KIB’s Board of Directors and executive management, deploying the bank’s human and material resources have positively reflected on its financial results in terms of the growth of income and improvement in the control over expenses indicators. In this regard, financing income grew by KD 9.2 million, 17 percent, totaling KD 63.20 million, compared to KD 54 million year on year.

Meanwhile, investment income rose by KD 1.1 million to reach KD 5.4 million, a 26 percent growth compared to KD 4.3 million in the previous year. However, the total expenses amounted to KD 26.80 million, an increase of only 6 percent compared to KD 25.40 million in 2014.

On other financial indicators, the chairman indicated that KIB managed to maintain high levels of capital adequacy in accordance with the Central Bank of Kuwait regulations concerning Basel III, whereby capital adequacy ratio at the end of 2015 reached 21.70 percent, while the financial leverage ratio reached 10.8 percent, both exceeding regulatory requirements. The return on shareholders’ equity also rose to 6.5 percent, compared to 5.9 percent in the previous year.

The improved financial performance of KIB was reflected in the increased pace of distributions to depositors’ accounts in Kuwaiti Dinar since the beginning of 2015 where the average of annual return on Arzaq KD deposit was 1.2 percent in the first quarter of 2015, and 1.5 percent in the second quarter, rose to 1.8 percent in the third quarter and reached 2.02 percent in the fourth quarter of the year to reach a total annual average of 1.63 percent. profits were deposited in the depositors’ accounts immediately upon announcement of the financial results.

The chairman said these achievements would not have happened without the collective efforts of all the bank’s departments, Board of Directors, Executive Management and staff.

In view of the bank’s performance during the 2015 financial year, the bank’s Board of Directors have recommended to the shareholders’ general assembly to distribute cash dividends of the nominal value of share (i.e. 9 fils per share) to shareholders registered in the bank’s record as at the date of the general assembly. The Board of Directors have also recommended to distribute reward to the chairman for an amount of KD 100,000 and rewards to Board members of a total of KD 300,000 for the year ended Dec 31, 2015.

In addition, it was recommended to pay a monthly remuneration of KD 12,000 to the chairman as from the date of the current general assembly to the date of the next general assembly, for the duties to be carried out by him next year. These recommendations are subject to approval by the bank’s general assembly and the concerned regulatory authorities.

By Iddris Seidu – Arab Times Staff

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