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KUWAIT CITY, March 21: Ahli United Bank (AUB) held its Annual General Meeting (AGM) on Tuesday the 21 March 2023, with 90.38% quorum and approved distribution of cash dividend of 8% (8 fils per share (.
Dr. Anwar Al-Mudhaf, AUB chairman said: On behalf of myself and the Board of Directors, I am truly honored to present to you the 57th Ahli United Bank K.S.C.P. Annual Report; highlighting AUB’s key achievements and consolidated financial statements for the year ended December 31st, 2022.
Exceptional year in the Bank’s journey
In light of the acquisition procedures of Kuwait Finance House of AUB Group, the year 2022 is very exceptional year in the history of Ahli United Bank – Kuwait. AUBK is now on the cusp of a new era of success and development, taking crucial steps towards a new key turning point in its longstanding full-of-successes journey. Through this deal, AUBK has become a part of the largest and best Islamic banking institutions in the world. Thus, rooted in a glorious past, poised for a brighter future, Ahli United Bank has become the icon of banking business.
AUB has gone through many glorious millstones and turning points since its inception in 1941 as the first bank to operate in Kuwait, and the first building block in the Kuwaiti banking industry. In 1971, a historic achievement took place as the bank became fully owned by the Kuwaiti government and changed its name to Bank of Kuwait and Middle East (BKME). In 2002, the journey continued towards more successes, when the bank was sold to “Ahli United Group”, to operate under the name “Ahli United Bank.” The year 2010 is considered the most important milestone in the thousand-mile journey, with Ahli United Bank Kuwait becoming a Sharia compliant bank. Since then, the Bank has achieved following successes and received many prestigious awards.
Throughout this unique position, AUB managed to maintain its excellent performance, its ability to withstand shocks and its resilience to various circumstances. It has been able to serve its clients, maintain its leading position, and enhance its services and products to keep abreast with the latest developments in the banking market.
Through these years of success, AUB managed to achieve notable progress and growth thanks to its resilient business model and strategic approach. This guaranteed the continuity of the Bank’s operations and its ability to serve customers at any time and from anywhere through its outstanding technological infrastructure, which the bank continuously develops to power it to launch innovative digital banking services befit the bank’s leading position and cater to the aspirations of its customers.
Good financial results for 2022
Despite the reality we live in today during a time when the world is grappling with a continuous state of uncertainty, coinciding with many shocks such as inflation, the Russian-Ukrainian war, supply chain disruptions, the repercussions of the Covid-19 pandemic, and many other influential forces that amplify each other, resulting in raising interest rates, Ahli United Bank reported net profits for the year 2022 of KD 36.4 million compared to KD 31.2 million in 2021, up by 16.7%.
The Bank’s total assets recorded KD 4.71 billion at the end of December 2022. The net financing receivables portfolio has grown by 2.1% to reach to KD 3.41 billion as of the end of December 2022 (2021: KD 3.34 billion) while customer deposits have also grown to reach to KD 3.24 billion against KD 3.11 billion reported last year representing a growth of 4.2%. The shareholders’ equity has recorded KD 0.49 billion at the end of 2022 against KD 0.47 billion reported last year representing a growth of 4.3%, while Earnings per Share (EPS) recorded 13 fils at the end of the year 2022, compared to 10.9 fils in 2021.
The Bank continued to strengthen its position in the Kuwaiti market and was able to maintain the solidity of the Bank’s financial position and its ability to achieve accepted growth rates. The Bank also maintained a solid capital adequacy ratio (CAR), before dividend, of 18.4% as of 31 December 2022 exceeding the level required by the regulator. Further, the Bank has maintained a conservative approach of risk management, which contributed to improving the quality of its assets and reducing the irregular financing ratio to 1.76% at 252% coverage ratio including collaterals at the end of 2022.
We have a strong belief that we must keep abreast with the technological advancement witnessed by the banking sector worldwide, through which we see that technology is on the path of reshaping the foundations of the banking industry. Hence, we pursue our efforts in digital development by relying on a cutting-edge infrastructure and technical expertise characterized by knowledge and creativity.
Employer of Choice
These remarkable achievements have been attained relying on the ambitious vision and strenuous efforts of the bank’s team who exhibited notable enthusiasm and commitment and succeeded in supporting the development and growth of this longstanding banking institution. I seize this opportunity to reiterate my pride in the bank’s employees being the wealth of the present and asset of the future. Therefore, we ensure to prepare and qualify our national competencies for success and excellence through integrated training and development programs. We also continue our efforts to maintain the bank’s unique position as Employer of Choice in the Kuwaiti banking sector, while maintaining our support to female talents and qualifying them for work and achievement in all sectors and job levels.
Operating in line with sustainability principles and supporting risk strategy
I assure you that in developing our business strategies, we put our customers, employees, shareholders and community on the top of our priorities. We believe that success in not limited to the growth of our financial performance indicators, but we are committed to working under the principles of sustainability and adherence to applying ESG standards with the aim of generating positive societal and environmental impacts, and protecting resources for the future generations.
In this regard, I underline that Ahli United Bank is taking serious steps in its journey towards sustainability. This includes maintaining a robust financial position and continuing the merge of ESG considerations into its business strategy in line with the UN objectives and Sustainable Development Goals (SDGs).
Furthermore, in 2022, the Bank continued to consolidate a risk strategy linked to the Bank’s integrated strategy, regulated by a suite of policies and regulations that ensure the Bank’s business progress in line with its approved risk appetite, with an emphasis on the independence of internal and external audit.
Prominent Social Role
Dr. Al-Mudhaf stressed that AUB, being the first bank to run its operations in Kuwait more than 80 years ago, has been able to play a prominent role in social work. Over these long years, AUB has proven its ability to provide a role model in social responsibility and sustainable development. Moreover, it provides a groundbreaking and distinguished experience in social responsibility, as are its enduring achievements at all fronts. Dr. Al-Mudhaf added that in 2022, AUB continued to launch targeted social-based initiatives and sponsored health, social and charitable activities, which delivered a positive impact on all segments of society.
Thanks and Appreciation Message
In conclusion, on behalf of AUB Board of Directors, Executive Management and all employees, I would like to take this opportunity to extend our gratitude to His Highness Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, the Amir of the State of Kuwait, and His Highness Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah, the Crown Prince, asking Allah Almighty to guide their steps for the prosperity of our beloved Kuwait.
I am also grateful for the guidance and support of all staff of the Central Bank of Kuwait, led by the Governor Mr. Basel Ahmad Al-Haroun, Capital Markets Authority, the Ministry of Commerce and Industry, and Boursa Kuwait.
Finally, I am pleased to express heartfelt thanks to our esteemed shareholders for their valued trust in AUB. I would like also to take the opportunity to share utmost appreciation to the Board of Directors, our Fatwa & Shari’ah Supervisory Board (FSSB) for their strenuous efforts, to our valued clients for their continued trust and loyalty, as well as to our Executive Management and employees for their dedicated efforts, wishing that the new year brings you and our beloved country all the best and success.
Mrs Jehad Al Hemadhi AUB board member and chief executive officer (CEO) said: It is my pleasure to meet you through this annual report to highlight the accomplishments of Ahli United Bank in the year 2022. At first, with all pride and honor, I would like to commend the endless success journey of this great banking institution extended since its inception in 1941 as the first bank to operate in Kuwait. Since then, Ahli United Bank has become a role model for excellence in the banking industry thanks to its unparalleled resilience, and a remarkable ability to weather various circumstances and maintain its unique position.
Good financial Results
Thanks to the unwavering support of the Board of Directors, Ahli United Bank has been able to maintain its excellent performance and stay ahead of the curve in the banking industry as a Sharia-compliant bank by offering competitive financing solutions.
In 2022, Ahli United Bank managed to achieve profit growth driven by robust operational performance. The bank accomplished balanced performance reporting good growth rates in all business sectors. This resulted in recording more distinguished earnings per share, positively hiking by 19% after the negative growth rate of -7% recorded in 2021. Moreover, the balanced growth realized in the financing portfolio across business sectors, including corporate, retail, banking services and wealth management reflects the bank’s commitment to achieving standard diversity in income sources and risk base, despite cementing provisions base by a higher growth rate of 2.1%, compared to 2021 provisions.
Strong presence in the banking sector by winning 8 awards in 2022
Ahli United Bank’s numerous accomplishments and strong presence in the Islamic banking sector in Kuwait were recognized by winning eight prestigious awards in 2022 from many reputable global agencies. These awards cover various sectors of the banking business.
- “Best IT Bank Award” in Kuwait for the year 2022 from the specialized International Business magazine.
- “Best Online Cash Management Bank” in Kuwait for the year 2022 in Corporate Banking from Global Finance magazine.
- “Best Customer Banking Experience Award” in Kuwait for the year 2022 from Global Finance magazine.
- “Best in Social Media Marketing and Services Award” in Kuwait for the year 2022 from Global Finance magazine.
- “Best Bank for Treasury Activities” in Kuwait for the year 2022 from Global Banking and Finance Review magazine.
- “Best Private Bank for Banking Services Award” in Kuwait for the year 2022 from MEED magazine.
- “Best Bank for Human Resources Initiatives in Kuwait” Award for the year 2022 from International Finance magazine.
- “Best CSR Bank Award – Kuwait 2022” from International Business magazine.
In addition to the previous awards, Ahli United Bank received the prestigious ISO 9001:2015 Certification for information technology infrastructure, development and service delivery for information technology infrastructure.
Groundbreaking Digital Banking Experience
Ahli United Bank is taking accelerated steps to provide a digital banking experience that keeps up with the digital acceleration in all banking and financing services. The bank aims to meet customer expectations by delivering an outstanding banking experience that provides seamless and safe financial services and products. Furthermore, Ahli United Bank is focused on speeding up the pace of innovation of digital banking solutions to remain focused on the road ahead.
Ahli United Bank has made progress with its comprehensive Digital Advancement plan, which aims to automate the bank’s products, services, and processes to boost efficiencies and improve Turnaround Times (TATs) and customer experience.
Ahli United Bank is continuing to develop and enhance its operations by providing a high-quality technological environment to meet customer expectations. At the same time, it is focused on keeping up with the rapid and growing developments in the digital revolution while also ensuring safe and reliable technological platforms for both customers and staff.
Keeping up with the cutting-edge FinTech advancements, AUB has continued to enhance the customer experience by adding several new features and functions to its B2B platform. This enables corporate customers to conduct their banking transactions easily and efficiently
Ahli United Bank continues its notable role in providing corporate financial services. In this regard, the B2B portal has been well received by our corporate customers based on the easy and highly efficient products and services tailored to meet their needs. This is demonstrated by the growth in the number and volume of transactions carried out via B2B portal in 2022, which led to more than 25% increase in business transactions compared to 2021. The Bank also launched the enhanced B2B Mobile app for corporate cash management.
Enhancing Customer Experience
Ahli United Bank has continued to enhance customer experience and keep up with their aspirations. In this context, AUB launched many innovative services, including the launch of more banking services through AUB mobile App. Additionally, AUB launched “Apple Pay” service, which provides a fast, easy and secure way of payment.
Furthermore, in 2022, AUB was committed to provide more services and products that meet customer needs and expectations in all segments, and achieve them a positive return and added value, targeting the largest number of customers wishing to obtain competitive banking services. The Bank also continues to launch the most effective campaigns through traditional and digital advertising. Likewise, the Bank is incessantly developing AUB reward programs.
Information Technology at AUB has played a prominent role in employing the best and state-of-the-art digital banking solutions to provide customers with groundbreaking banking services. These services feature high level of security, safety, and digital intelligence, as well as resilience in conducting banking transactions with unmatched smoothness and transparency.
Employer of Choice
In 2022, Ahli United Bank made a continued effort to uphold its distinctive positions as the Employer of Choice in the Kuwaiti banking industry. This was achieved by implementing an approach and strategy that emphasized the selection and recruitment of top banking talents. Additionally, the bank offers integrated training and development programs to enhance the skills and capabilities of its employees, ultimately aiming to advance their careers so that they can play their role in forward moving the Kuwaiti-banking sector.
Ahli United Bank achieved notable success in various HR areas, especially its HR strategy that concentrates on attracting the best-qualified professionals. It also seeks to develop employees’ skills and maintain continuous interaction with them. Further, HR Department made a great success in operating remotely and assuming the functions related to recruitment, planning, training, and development and performance management. This was further complemented by the transition from traditional annual performance appraisal to ongoing performance management year-round, which improved communication between senior management and employees.
The localization ratio at year-end 2022 was 70.6 % against the mandated requirement of 70% by CBK. AUB has taken initiatives in enhancing the role of women in work and professional advancement at all job levels and in all departments. With an overall 35% female participation, women holding senior leadership positions at AUB was about 30.8%.
Alignment with Environmental, Social, and Governance (ESG) Goals
Ahli United Bank aims to be a leading innovative Islamic bank that operates according to international standards and offers customers groundbreaking Sharia-compliant financial solutions. To achieve this vision, the bank recognizes the importance of aligning with ESG priorities and making a meaningful contribution to the advancement of ESG in the environments where it operates.
In 2022, AUB made sustained efforts to uphold high standards of Corporate and Risk Governance while maintaining a robust capital base and delivering sustainable returns to shareholders. The bank prioritized the implementation and enhancement of its SEMS policy, which enables the identification of projects that may have adverse impacts on society or the environment, or that violate the environmental performance criteria of the IFC and World Bank, as well as national environmental laws.
We believe that our success is not only limited to our solid performance and our ability to achieve profits, but also extends to our ability to fulfill our commitments to the community we live in. In this context, in 2022, our bank managed to allocate significant resources to develop the society economically and environmentally. This reflects our position as a leading source of inspiration for other banks in the region due to alignment with the New Kuwait Vision 2035, ISO 26000 standard, sustainable development goals and its commitment to the United Nations Global Impact initiative to ensure the success of our CSR program.
Appreciation & Gratitude
In conclusion, I would like to avail this opportunity to convey sincere thanks and appreciation to the Chairman and members of the Board of Directors of Ahli United Bank for their never-ending support and precious trust. I would like also to extend my truthful thanks and gratitude to our valued shareholders and customers who back our continuous success. Special thanks are due to the Central Bank of Kuwait for its continuous and valuable support. Special thanks are also due to the Capital Markets Authority.
My deepest thanks go also to the honorable members of the Bank Shariah Supervisory Board, my colleagues in the Executive Management, and our dedicated employees for their outstanding efforts and dedication to work. I pray to Allah Almighty to grant us all success and to protect our precious country under the wise leadership of His Highness, the Amir of Kuwait Sheikh Nawaf Al Ahmad Al Jaber Al Sabah and His Highness the Crown Prince Sheikh Mishal Al Ahmad Al Jaber Al Sabah, May Allah safeguard them
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