Gulf Bank records KD 35.8 mln in net profit for first half of ’23

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KUWAIT CITY, July 29:  Gulf Bank K.S.C.P. announced its financial results for the first half ending 30 June 2023. The Bank reported a net profit of KD 35.8 million, an increase of KD 5.6 million or 18% compared to 2022 first half net profit of KD 30.3 million.

Jassim Mustafa Boodai, Gulf Bank Chairman

The increase in the Bank’s net profit was mainly driven by a 9% or KD 6 million increase in net interest income for the first half 2023. As a result, operating income grew by 8% or KD 6.9 million to reach KD 92.3 million and operating profit before provisions grew by 12% to reach KD 49.3 million for the same period.

Subsequently, the Bank’s return on assets improved from 0.9% in the first half of 2022 to 1.1% in first half of 2023 and return on equity grew from 9.1% to 10.1%.

For the second quarter of 2023, the Bank reported a net profit of KD 18.5 million, an increase of 22% over the second quarter of 2022. Operating income for the second quarter of 2023 was to KD 45.9 million, an increase of 5% compared to the same period of last year and operating profit was KD 24.3 million, with an increase of 9% over the same period of last year. 

As for asset quality, the non-performing loans (NPL) ratio stood at 1% as of 30 June 2023, similar to the prior year. Additionally, the Bank continues to have significant non-performing loans coverage ratio of 546% including total provisions and collaterals.

Total credit provisions as of 30 June 2023 reached KD 307 million whereas IFRS 9 accounting requirements (i.e., ECL or expected credit losses) were KD 185 million. As a result, the Bank has very healthy excess provision level of KD 122 million, which is above what is required by the IFRS9 accounting requirements.

Compared to first half 2022, total assets increased by 1% to KD 6.9 billion while loans and advances reached KD 5.2 billion. Shareholders’ equity increased by 7% to reach KD 723 million and total deposits stood at KD 5.2 billion.

The Bank’s regulatory Tier 1 ratio as of 30 June 2023 was 13.9%, above the regulatory minimum of 12% and the Capital Adequacy Ratio (CAR) was 16.1%, which is above the regulatory minimum of 14%.

Commenting on the first half of 2023 financial results, Gulf Bank’s Chairman Mr. Jassim Mustafa Boodai said:” We are proud of the notable achievements and strong financial performance Gulf Bank has accomplished in the first half of 2023. We remain focused on delivering exceptional services, launching innovative products, and prioritizing customer satisfaction to meet their evolving needs.”

Core Banking System Implementation

One of the key milestones of Gulf Bank during the first half of 2023 was the implementation of phase I of the new core banking system. This milestone represents a major leap forward in the Bank’s digital transformation journey. It empowers the Bank to provide enhanced services, improve efficiency, and deliver seamless customer experiences. The new system’s deployment showcases Gulf Bank’s commitment to better serve its valued customers using cutting-edge technology.

By going live with the core banking system, Gulf Bank has demonstrated its dedication to adaptability, innovation, and pioneering in an increasingly competitive environment. The phase I of the new system’s integration will enable Gulf Bank to streamline operations and optimize processes to further solidifying its position as a trusted financial partner.

Commenting on the launch of phase I of the new core banking system, Mr. Boodai said: “The successful deployment of the first phase of the new core banking system is a testament of our commitment to innovation and digital transformation. We are confident that these strategic milestones will further enhance our ability to deliver unparalleled banking experiences to our customers. With a clear vision and robust strategies in place, Gulf Bank is poised for continued success and sustainable growth.”

AlDanah Grand Price Increase

During the first half of the year 2023, Gulf Bank has announced an increase in the annual grand prize value of the AlDanah account, in celebration of AlDanah’s 25th anniversary. The annual grand prize has been raised from KD 1.5 million to KD 2 million, becoming the world’s largest cash prize linked to a bank account.

Empowering and Mentoring Youth

Gulf Bank is happy to complete the second edition of the “Datathon” competition that empowers young talents in the areas of data analytics, data modeling, and visualization. This initiative aims to attract and invest in youth, fostering their growth and providing them with valuable mentorship opportunities. By nurturing young talents, Gulf Bank contributes to the development of the data analytics community and promotes an innovation mindset in the future generations. As a result of this commitment, Gulf Bank was awarded during the eighteenth 2023 Finnovex Awards Summit, Qatar, with The Prestigious Excellence in Data Innovation Award, in recognition of its unparalleled excellence in leveraging data to drive transformative change and create new opportunities in the banking industry.

Recognition of Credit worthiness

Gulf Bank’s credit worthiness and financial strength is recognized internationally. During the first half of 2023, Capital Intelligence affirmed the Bank’s Long-Term Foreign Currency Rating at ‘A+’ with a Stable Outlook. In addition, Capital Intelligence has affirmed the Bank’s KWD50 million Basel III-compliant Tier 2 Subordinated Bonds at “BBB+” with a “Stable” Outlook. Furthermore, Fitch Ratings has assigned Gulf Bank a Long-Term Issuer Default Rating of ‘A’ with a ‘Stable’ Outlook, and Moody’s Investor Services has assigned the Bank a Long-Term Deposits rating of ‘A3’ with a ‘Stable’ Outlook.

These ratings are a testament to Gulf Bank’s solid financial performance, experienced management, and ability to navigate the global banking landscape successfully.

Appreciation

Mr. Boodai concluded his remarks by stating: “Gulf Bank remains dedicated to its long-term vision of delivering sustainable growth to its various stakeholders. We look forward to the second half of 2023 with great optimism, building upon the successes of the first half and to further elevate our position as a leading financial institution in Kuwait.”

He added: “On behalf of the Board of Directors, I would like to thank our shareholders for their ongoing trust, and our employees for their commitment and dedication. I would also like to thank the Central Bank of Kuwait for their continuous support. Finally, I want to thank our clients for their loyalty, and reiterate our commitment to offering them the best banking experience.”

Key positive indicators:

  • First Half 2023 net profit of KD 35.8 million, an increase of 18.3% compared to the same period of 2022.
  • Return on assets improved in the first half of 2023 to 1.1% and return on equity grew to 10.1%.
  • Non-performing loan ratio for the First half 2023 was 1%, with a strong non-performance loan coverage ratio of 546%.
  • Capital ratios as of the First half 2023, Tier 1 ratio was 13.9% and Capital Adequacy Ratio (CAR) was 16.1%.

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