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KUWAIT CITY, Feb 7: Sheikh Mohammed Al-Jarrah Al-Sabah, Chairman of Kuwait International Bank (Al Dawli) announced that during 2015, the Bank’s profits have grown by 17% to reach KD16.1 million compared to KD13.7 million in 2014.
This growth is attributable to an increase in revenues accompanied by an improved control over expenditures whereby the financing income rose by 17% i.e. KD9.2 million to KD63.2 million compared to KD54 million for the previous year. The investment revenues increased by KD1.1 million, amounting to KD5.4 million compared to KD4.3 million for the previous year, thus realizing a remarkable growth of 26%. On the other hand, total expenditures reached KD26.8 million compared to KD25.4 million, i.e an increase of 6% compared to the previous year.
This good performance reflected positively on earnings per share (EPS) for 2015 which increased by 17% reaching 17.14 fils compared to 14.65 fils for the previous year. In this context, Al-Jarrah stated that Al Dawli has booked reserve provision as a precautionary measure to avoid of any adverse impacts which might be instigated by the foreseen economic uncertainty for the year 2016.
As for dividends, Al-Jarrah stated, Al Dawli’s Board of Directors has recommended to the General Assembly, cash dividends of 9% of the share nominal value (9 fils per share) for the shareholders registered at the Bank’s records on the General Assembly meeting date. This recommendation is subject to the approval of Bank’s General Assembly and the regulatory authorities.
Furthermore, Al-Jarrah also indicated that Al Dawli’s assets increased by KD127.5 million, i.e. by 8% reaching KD1.79 billion compared to KD1.66 billion by the end of the previous year. This increase is attributable to a growth in the financing portfolio size by around KD100 million reaching KD1.17 billion compared to KD1.07 billion last year i.e. by 9.3% compared to the previous year. The depositors’ accounts rose to approximately KD1.02 billion compared to KD989 million by the end of the previous year, that is an increase by KD31 million representing 3%.
As an indication of assets quality, Al-Dawli’s outstanding performance by end of 2015 has positively reflected on NPLs which has remarkably decreased by 71% to reach 1.43% in total compared to 4.97% for the previous year. Total provision coverage ratio has also increased to 199% compared to 67% for the previous year. Moreover, total provisions and collaterals coverage ratio increased to 327% compared to 227% for the previous year. In this context, Al-Jarrah praised Al-Dawli’s performance and achievements pertinent to these significant indicators.
In full conformity with CBK regulations on Basel III, Al Dawli continued to maintain an excellent capital adequacy ratio (CAR) of 21.7% while the financial leverage ratio reached 10.8%. Indeed, the aforesaid positive results fostered rise of return on equity to reach 6.5% in comparison with 5.9% for the previous year. This indicates an increase in the distributions to depositors’ accounts in Kuwaiti Dinar currency since the beginning of 2015 whereby the annualised return on Arzaaq deposit in Kuwaiti Dinar currency to 1.2% in Q1, 1.5% in Q2, 1.8% in Q3 and ended up with 2.02% in Q4 with an average of 1.63% for 2015. Profits were credited into the depositors’ accounts once the financial results were declared.
Further, Al Jarrah stated that in continuation of Al Dawli’s new strategic plan, the Bank has been able to apply certain initiatives pertinent to the first phase of this strategy. This includes recruitment of qualified professionals for the executive management positions and offering improvements to enhance the Bank’s flexibility. This has certainly led to improvement in all financial ratios and indicators. The new strategy aims at realization of a number of ambitious targets related to the Bank’s performance, profits, assets, products and services. It aims at turning KIB to the Islamic Retail Bank of choice renown for leading innovation and the one-stop-shop Real Estate powerhouse bank in Kuwait. All these can be attained by improvement of the Bank’s assets and focusing on sustainability of both depositors’ and investors’ returns.
In the second phase of strategy implementation, extending throughout 2016, the Bank will focus on improvement of the products and services offered to its customers and will ensure efficiency and effectiveness of its internal operations.