Board of Directors proposes 20% cash dividend, 10% bonus shares
KUWAIT CITY, Jan 27: Kuwait Finance House (KFH) Chairman, Hamad Abdulmohsen Al- Marzouq, said that KFH has, by the grace of Allah, realized a net profit of KD 251.0 million for the year 2019 for KFH shareholders compared to KD 227.4 million last year i.e. an increase of 10.4%. Financing income reached KD 931.6 million, i.e. an increase of 8.1% compared to last year. Net operating income increased to reach KD 510.1 million, i.e. a growth of 12.5% over the last year. Cost to income ratio dropped to reach 37.36% for the year 2019, compared to 39.20% last year.
Earnings per share for 2019 reached 36.45 fils compared to 33.06 fils in 2018 i.e. an increase of 10.3%. KFH distributions for the year 2019 were as follows: 3.120% for “Al-Khumasiya” investment deposit, 2.620% for “Al-Mustamera” investment deposit, 2.075% for “Al-Sedra” investment deposit, 2.475% for the 12-month Dimah investment deposit, 2.150% for the 6-month Dimah investment deposit, 2.100% for long term investment plans and 0.800% for saving investment account.
The Board of Directors has proposed 20% cash dividends to shareholders and 10% bonus shares subject to general assembly and concerned authorities’ approval.Total assets increased to reach KD 19.391 billion, i.e. an increase of KD 1.621 billion or 9.1% compared to 2018. Financing portfolio increased to reach KD 9.337 billion, i.e. an increase of KD 146 million or 1.6% compared to 2018. Investment in Sukuk reached KD 2.276 billion an increase of KD 713 million i.e. a growth of 45.6% compared to end of last year and the majority of the balance represents sovereign sukuk. Depositors’ accounts increased to reach KD 13.553 billion, i.e. an increase of KD 1.772 billion or 15.0% compared to 2018. Shareholders’ equity increased to reach KD 2.060 billion i.e. an increase of KD 166 million or 8.8% compared to 2018. KFH’s capital adequacy ratio (CAR) reached 17.67%, (after the proposed dividends) i.e. higher than the required limit of 15%, thus reiterating the strength of KFH financial position.
Sound performance Al-Marzouq added in a press release that the sound financial statements KFH achieved in 2019 clearly show that it has succeeded in enhancing its world-leading position in the Islamic finance industry, confirming its strength and financials and achieving rewarding returns for shareholders and depositors. Also, KFH succeeded in achieving the highest levels of innovation and excellence in customer service. “These strong results confirm KFH`s ability to adapt to conditions and challenges that the regional and global markets witnessed in 2019. The prudent and conservative approach that KFH follows in risk management created strong buffers against market fluctuations and geopolitical developments regionally and globally.” He not
Ambitious Strategy … Acquisition brings several benefits Al-Marzouq confirmed that KFH’s growing financial indicators are in line with the Group ambitious strategy and its performance in general. They also reflect KFH’s strong activity, high cost efficiency, its successful strategy of achieving sustainable growth by focusing on the core banking activities. He added that the KFH achieved continuous growth in net income, supported by the increase in operating income and net profit. Al-Marzouq said that KFH succeeded in offering a wide range of services, products and financial solutions that are unique to the Kuwaiti market and a new addition to the competitive advantages KFH enjoys. Al Marzouq said that KFH’s acquisition of Ahli United Bank B.S.C. (AUB) brings many benefits in terms of improving profitability. Studies prepared by consultants have shown that the expected increase in future earnings per share as a result of this acquisition (EPS Accretion) will be the highest compared to the acquisition deals in the Gulf region and the Middle East. In addition, the merger will have positive effects for KFH shareholders due to the expected increase in profits and dividends. He confirmed that the acquisition will improve the quality of the new entity’s assets, high capital base, liquidity levels, and capital efficiency at rates that exceed the regulatory requirements. The deal will also generate the largest and best Islamic bank in the world in terms of assets, as KFH will occupy leading deserved position with a value of assets of about $ 101 billion.
Group Subsidiaries … Strength Elements
Al-Marzouq highlighted that the high liquidity levels that KFH enjoys are one of its main strengths along with Group’s geographical spread in Turkey, Germany, Bahrain, Malaysia and Saudi Arabia as well as the diversified investment and banking services that are aligned with latest financial technology.
Digital Transformation Al-Marzouq said: “KFH has made qualitative leaps in implementing the strategy of digital transformation, by adopting the latest financial technology innovations in FinTech, AI and banking robotics while achieving excellence in Mobile Banking service in accordance with the highest standards of quality and professionalism. These advanced steps contribute to providing the customer with an exceptional and sustainable digital experience and drives the digital development in the banking industry. “Located in different prominent areas, KFH opened 10 Digital Self-Banking Stations “KFH Go” which won the “Best Product in the Middle East” Award from EMEA Finance magazine in recognition of KFH’s efficient services in response to customer expectations.” He added. Al-Marzouq emphasized that KFH invests in technology to enhance its digital capabilities, adding that digitization and advanced services and products serve customers and contribute to the development of the local banking sector as well as intersect with Kuwait Vision 2035 which seeks to transform the country into a knowledge-driven economy based on innovation and technology.
High Credit Ratings He pointed out to the high credit ratings with positive outlook of KFH from the international rating agencies, indicating Moody’s Investors Service, (“Moody’s”) has affirmed the A1 / Prime-1 long and short-term domestic and foreign currency deposit ratings of KFH. The rating agency has also affirmed KFH’s Baseline Credit Assessments (BCA) and Adjusted BCAs wwat baa3. The outlook on KFH’s long-term ratings has been changed to positive from stable following KFH’s shareholders approving the acquisition of Ahli United Bank B.S.C.
Development Projects and Kuwait Vision 2035
Emphasizing the role of the private sector in the Kuwaiti economy, Al-Marzouq pointed out the leading role of KFH in supporting the local economy and the National Development Plan through financing mega projects. This is particularly part of Kuwait Vision 2035 to transform the country into a regional and global financial and commercial hub. He added that “KFH has a diversified financing portfolio including various vital sectors such as energy, water, power, infrastructure and construction. Al Marzouq pointed out KFH’s leading role in Sukuk issuances for local and international companies and governments, stressing the full readiness to ccontinue financing public development projects.
Attracting Kuwaiti talents
Al-Marzouq said that KFH has achieved remarkable progress in the implementation of the human resources strategy, where 98% of new hires during 2019 were Kuwaitis. Total hires of Kuwaitis were 337 out of 343. Moreover, 84% of new hires were Kuwaitis below 30 years of age in 2019. “Under training programs, KFH offered 15,856 seats for 3120 staff during 2019. This confirms its leadership as the most prominent private sector institution in recruiting and qualifying Kuwaiti youth, as part of a comprehensive strategy for talent training and development.” He said.
Sustainable Community Development
Al-Marzouq explained that “KFH” has made great achievements on the level of social responsibility and sustainable development strategy. In 2019, KFH`s social initiatives included various aspects such as society, environment, health, education, people with special needs, youth, sports, innovation, entrepreneurship as well as the volunteering activities. In this regard, KFH won prestigious awards
Al Marzouq said that KFH won prestigious awards from international magazines and institutions such as the Euromoney Award for Excellence 2019 – “Best Bank in Kuwait” and the World’s Best Islamic Financial Institution 2019 award from Global Finance Magazine and many other global awards. Al-Marzouq expressed his confidence that KFH will continue to boost its financial results and strong performance, extending his thanks to stakeholders and customers for their support and trust in KFH’s operations and activities and to the regulatory authorities. He commended the executive management and staff for their outstanding efforts, stressing the need to maintain KFH leadership.