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Monday , September 27 2021

Kuwait’s banking sector profits grew 8.9%: KPMG

Total assets reach $251.9 bln, up 5.9% in 2017: report

Bhavesh Gandhi

KUWAIT CITY, May 28: KPMG has recently released the third edition of the ‘GCC listed banks results’ report. The report shows that the banking sector in Kuwait saw a healthy profit of 8.9 % compared to 2016.

The total assets stood at US$ 251.9 billion, at the end of 2017, with a 5.9% increase compared to the previous year 2016 The report, titled ‘Shifting Horizons’, analyzed the published results of listed banks across the region for the year ended Dec 31, 2017. Speaking about the report, Bhavesh Gandhi, and Head of Financial Services at KPMG in Kuwait, commented, “We are delighted to launch the third edition of KPMG’s Gulf Cooperation Council (GCC) listed banks results report for 2017, which analyses the financial results for leading listed commercial banks in Kuwait and across the GCC. This report provides industry leaders with succinct analysis, insights and forward- looking views.”

Bhavesh further said “Overall, it has been a good year for listed banks in Kuwait with a solid growth in profitability. 6 Kuwait banks saw a doubledigit jump in their net profits in local currency terms in 2017. Banks have already started reshaping strategies, which resonate in form of an average decline of 4.8% in Cost-to-income ratio.” “Also, Kuwait government is in process of implementing the current fiveyear national development plan. This spending by Kuwait government has given a confidence to the banking sector and the international debt market, which helped three banks a combined total of $1.5 billion showing confi- dence in Kuwait’s baking sector.”

Looking to the future of the banking sector, Dr Rasheed Al Qenae, Managing Partner, KPMG in Kuwait say “Most Kuwaiti banks are highlighting digital banking services as one of the key initiatives. Digital banking will continue to grow rapidly as an alternative channel and, although branches will not disappear in the short to medium- term horizon, we believe that digital banking is emerging as a preference for many customers, especially the younger generation” “In the third quarter of 2017, FTSE Russell upgraded Boursa Kuwait to emerging market status. Classifying Boursa Kuwait as an emerging market is expected to encourage investors eager to invest in the region’s second key stock market, which comprises of large banks with investments and branches in many countries.” Dr Rasheed added.

The report overall analyses the results of selected listed banks in the GCC countries. It summarizes bank’s results against selected key performance indicators for the year ending Dec 31, 2017 and compares these with the same information for the year ending Dec 31, 2016. The report findings highlight that the GCC banking sector remains relatively resilient amidst regional and global political and economic challenges, although they have not seen the double-digit growth rates seen in previous years. Overall, net profits for all GCC Banks have increased yearon- year by 6.7 %, in comparison to last year’s decline, as a result of larger GCC economies. The region’s banking sector continues to focus on cost reductions and operating efficiency initiatives, largely driven by innovation and technology, as evidenced by declining cost-to-income ratios.

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