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CBK records net profit of KD 7.8 mln for Q1 – Total assets reach KD 4,147 million at end of March 2016

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Yacoub Al Ebrahim, CBK spokesman
Yacoub Al Ebrahim, CBK spokesman

KUWAIT CITY, April 25: Commercial Bank of Kuwait announced net profit of KD 7.8 million for the first quarter of 2016 up by 22.8 percent compared with KD 6.3 million for Q1 2015. The Bank’s operating profits before provisions reached KD 28.6 million up by 4.4 percent compared with KD 27.3 million for the same period in 2015.

Commenting on the Bank’s financial results, the Bank’s spokesman Yacoub Al Ebrahim said, Commercial Bank’s total assets at the end of March 2016 was KD 4,147 million (March 2015: KD 4,099 million) with an increase of KD 48 million on the back of higher returns on the credit and investment portfolios and fee income in addition to treasury revenues.

The Banks’ capital adequacy ratio at the end of March 2016 was 17.5 percent exceeding the minimum regulatory requirement of 13 percent as set by the Central Bank of Kuwait and financial leverage ratio reached 11 percent which is more than the (3 percent) minimum requirement. The ROE (after provisions) increased from 4.82 percent at the end of March 2015 up to 5.66 percent as at the end of March 2016.

Al Ebrahim added that the improvement seen in the Bank’s financial indicators is attributed to the conservative policy adopted by the Bank to use a portion of the operating profits to build a solid provisioning base with provisions amounting to KD 140.6 million as at the end of March 2016 with coverage of 677.5 percent for NPL. Building such buffers comes in line and according to the directions of the regulatory authorities.

All that in addition to the aggressive policy on write offs without waiving any of the Bank’s legal rights to clean the loan portfolio and reduce the NPL ratio to become lower than the industry average as the Bank continues to maintain a lower NPL ratio which reached 0.85 percent as at the end of March 2016, one of the best ratios in Kuwait banking system if not the best. As such, the Bank will be able to cope with any reverse conditions that may impact the Bank’s credit and investment portfolios.

Al Ebrahim concluded his statement by referring to the strategy adopted by the Bank since last year which aims at restructuring the bank’s assets & liabilities to improve assets quality and profitability level and which yielded its results with improvement seen in profitability levels of some business areas at the Bank, particularly Treasury Division and International Banking & Syndication Division, stressing that the Bank will continue to avail the available investment opportunities with acceptable risks.

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