Gulf Bank posts KD 29m net profit for 2020

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Board proposes cash dividend of 5 fils per share

KUWAIT CITY Feb 10: Gulf Bank K.S.C.P. (“Bank”) announced its financial results for the year ended 2020.

Financial Summary

Gulf Bank reported a net profit of KD 29 million and earnings per share of 10 fils for the year ended 31 December 2020 compared to a net profit of KD 64 million and earnings per share of 22 fils for the year ended 31 December 2019.  The Board of Directors is recommending a cash dividend of 5 fils per share for shareholders’ approval at the Annual General Meeting to be held in March 2021. This would be the sixth straight year in a row Gulf Bank has paid cash dividends to shareholders.

The decline in net profit compared with the prior year was driven by lower interest income (KD 47 million) from a sharply lower interest rate environment, lower fee income (KD 8 million) from a slack in economic activity, and non-recurring interest income in 2019 (KD 20 million) partially offset by lower interest expense (KD 27 million) and a reduction in operating expenses (KD 14 million). However, the Bank is well positioned as it enters 2021 with strong credit quality, high excess provisions, significant capital buffers, and ‘A’ ratings from the major credit rating agencies.

The Bank’s non-performing loan ratio for the year-end 2020 stood at 1.1%, no change from year-end 2019.  

At the end of 2020, total provisions on credit facilities were KD 284 million compared with KD 172 million of provisions required under the IFRS 9 accounting standard.  Thus, the Bank held excess provisions of KD 112 million compared with KD 106 million a year ago.  This was the third straight year since IFRS 9 was introduced where the Bank’s excess credit provisions exceeded KD 100 million.

The Bank’s regulatory capital ratios remained strong as the Tier 1 ratio of 14.85% was 5.4% above the regulatory minimum of 9.5% and the Capital Adequacy Ratio (CAR) of 18.25% was 6.8% above the regulatory minimum of 11.5%.

The Bank maintained its ‘A’ ratings from the four major credit rating agencies:

  • Moody’s Investors Service maintained the Long-Term Deposits Rating of “A3” with a “Stable” outlook.
  • Fitch Ratings affirmed the Bank Long-term Issuer Default Rating of “A+” with a “Stable” outlook.
  • S&P Global Ratings affirmed the Bank Issuer Credit Rating at “A-” with a “Negative” outlook.
  • Capital Intelligence affirmed Gulf Bank’s Long-term Foreign Currency Rating of “A+” with a “Stable” outlook.
Jassim Mustafa Boodai, Gulf Bank’s Chairman

Commenting on the results, Mr. Jassim Mustafa Boodai, Gulf Bank’s Chairman said: “2020 was truly an unprecedented year. Our everyday lives have been impacted by the coronavirus (Covid-19) pandemic, which is still having an impact on the economy and society. During 2020, Gulf Bank’s financial performance highlighted the strength of its franchise and its ability to navigate through the current environment. The Banks’s solid capital, comfortable liquidity levels, ample credit provisioning, and low non-performing loan ratio have served us well throughout these challenging times. We continue to focus on our priorities: customers, employees, and our communities. The Bank’s strategy remains centered on three key pillars:

  • Leveraging technology and digitalization in order to improve customer experience and operating efficiencies.
  • Driving selective organic growth without compromising our risk standards. 
  • Promoting a strong performance driven culture, reinforced with engagement.”  Mr. Boodai added.

Business Highlights 

Tony Daher, Gulf Bank’s CEO

Commenting on the Bank’s operations, Mr. Tony Daher, Gulf Bank’s CEO said: “The Consumer banking segment continued its upward trajectory, growing by 6% to reach KD 1.7 billion as of year-end 2020, contributing 38% of Gulf Bank’s total loan book.

Although physical branches were not operating at 100% capacity during most of the year due to the country’s lockdown, the Bank was able to provide continuity of service to customers through its extensive ATM network and digital banking channels. In addition, the digital platform was enhanced through improved biometric login, push notifications, and ‘know your customer’ updates.”

“Despite very challenging market conditions, the Corporate segment remained agile and selective in managing the loan book of KD 2.7 billion as of year-end 2020, which contributes 62% of the total loan book.  The Corporate team shifted their focus to support Corporate clients and Small and Medium-sized Enterprises (SMEs) to meet their needs during the Covid-19 pandemic.” Mr. Daher added. 

The Bank ended 2020 with several digital achievements and information technology enhancements. Throughout the year, Gulf Bank achieved several digital milestones and implemented major updates that all customers — from individuals to larger businesses and SMEs — benefited from. Gulf Bank launched several initiative and online banking solutions including “Visit Gulf Bank,” a mobile application allowing customers to book appointments to visit their nearest branch. Also, large-sums cash deposit machines were provided to facilitate the depositing process in one transaction. A complete digital loan application process was also launched during the year. In addition, the Bank facilitated the process of checking on the status of ministry and public sector salaries by publishing the latest updates on the Gulf Bank website as soon as salaries were disbursed to clients. Businesses can apply now for letters of credit and guarantees online, with end-to-end processing.


2020 marked a year of historic changes, requiring communities everywhere to respond quickly to unprecedented challenges. From the start of the pandemic to date, Gulf Bank has been at the forefront of that response; mobilizing rapidly to improve conditions for its employees, the general public, and our beloved Kuwait. 

At the start of the pandemic, Gulf Bank contributed to the Central Bank of Kuwait’s KD 10 million support Fund designed to allow local banks to assist national efforts in combating the spread of the novel coronavirus.

Gulf Bank also launched a nationwide mental and physical wellness campaign to raise awareness about adjusting to the gradual and safe return to the workplace. Psychological services and well-being webinars were offered for employees in recognition of the importance of mental and social health during the pandemic. And as a champion of women’s economic empowerment and the importance of a mother’s role in the society, Gulf Bank provided its female employees an option of flexible working hours to support their families.


Mr. Boodai concluded his remarks by stating: “On behalf of the Board of Directors, we would like to express our gratitude to HH the Amir Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, and HH the Crown Prince, Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah, for their wise leadership and vision. We would also like to extend our appreciation to the Central Bank of Kuwait and the Capital Markets Authority for their dedicated efforts in supporting and promoting Kuwait’s Banking sector. Finally, I would like to extend my deepest gratitude to all front liners who had put their lives and wellbeing on the line to fight this pandemic. I would also like to thank our shareholders, our customers, and our teams for their loyalty over the years, with a Special appreciation to our board of directors for their guidance and valuable contributions.”

Key Messages: 

  1. Earnings per share of 10 fils for the year ended 31 December 2020
  2. The Board of Directors recommends cash dividend of 5 fils, representing the sixth straight year where Gulf Bank have paid out cash dividends to shareholders.
  3. Non-performing loan ratio for the year-end 2020 stood at 1.1%, no change from year-end 2019.
  4. The Bank’s regulatory capital ratios remained strong with Capital Adequacy Ratio (CAR) of 18.25%.
  5. The Bank maintained its ‘A’ ratings from the four major credit rating agencies.

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