Kuwait Finance House (KFH) held a webcast on its earnings on July 30 in which speakers from KFH executive management Mazin Al-Nahedh, Group Chief Executive Officer, Shadi Zahran, Group Chief Financial Officer and Fahad Al-Mukhaizeem, Group Chief Strategy Officer attended. While welcoming the participants to the second quarter 2018 earnings conference call for Kuwait Finance House Group, Fahad Al-Mukhaizeem highlighted the Kuwait operating environment with an overview of KFH and the second quarter business highlights.
“We’ll also share with you KFH’s strategy, as well as the second quarter financial results,” he said.
Looking at Kuwait economic indicators the GDP value is expected to slightly increase by year end with expectations of higher growth in 2019 especially with oil prices closing near the 75-dollar range almost 18 percent above last year’s close. Central Bank of Kuwait held its benchmark interest rates at a 3 percent following the last US Federal reserve rate hike. Fitch also affirmed Kuwait’s sovereign rating at AA, he said.
As an overview of Kuwait Finance House Group, the bank maintains either the top or second position between competitors within the local or regional markets. Being the first and largest Sharia-compliance bank in Kuwait, it is the second largest in the world by assets. In terms of our geographical diversification, we have 399 branches in Turkey, 59 in Kuwait, 14 in Malaysia, 10 in Bahrain, 5 in Germany and 1 in Saudi Arabia.
For the key business highlights, we’ve launched a variety of services to benefit the Youth segment in Kuwait, who are considered to be the driving force for the future success of Kuwaiti society. In addition to upgrading the group level websites for our subsidiaries including Bahrain, using the latest technologies. KFH continues its strong support and sponsorship for its CSR activities.
Highlighting the financial performance for the first half 2018 of KFH, Group CEO Mazin Al-Nahedh said net profits to shareholders reached KD 95.22 million for the first half of 2018 compared to KD 81.64 million for the same period last year an increase of 16.6 percent. Y-o-Y. Earnings per share for the first half of 2018 reached 15.23 fils, compared to 13.06 fils for the same period last year i.e. an increase of 16.6 percent.
Islamic finance can take advantage of technology to provide more efficient and accurate services to customers, helping to meet their banking needs that go beyond their expectations.
In regards to our strategy in supporting the national economy and achieving the comprehensive development, KFH financed different mega projects in Kuwait and the countries where it operates including financing of terminal II building for Kuwait International Airport and the construction of Canakkale Bridge in Turkey.
KFH enjoys a leadership position in the Sukuk market and the Islamic financial services in general. The vast experience of KFH Group in the Sukuk issuance has positioned it as a trustworthy and highly recognized organization by major corporates and governments globally.
KFH’s Group’s Chief Financial Officer Shadi Zahran presented the financial performance of KFH Group for the first half 2018. The Group Net Profit After Tax (NPAT) attributable to shareholders at KD 95.2 million has increased by KD 13.6 million or 16.6 percent compared to June 2017 resulting mainly from an increase in net finance income by KD 67.0 million, offset by a decrease in investment income by KD (26.1) million, increase in Provisions by KD 14.9 million, besides an increase in Operating Expenses by KD (11.2) million. And we will explain each part separately in the coming slides, however, I’d like to highlight that despite the increase in provisions for the first half compared to last year the group profit improved from the core stable activities with drop in investment income.
Total assets at KD 17.6 billion increased by KD 458mn or 2.7 percent over a 12 month (H118 vs. H117) . Financing receivables at KD 9.6 billion is the main contributor to the balance sheet growth as increased by 7.3 percent over a 12 months (H118 vs. H117) period. Growth in financing receivables came from all banking entities and business units, driven largely by Corporate Banking. Growth in financing portfolio compared to December 2017 is 3.7 percent despite the devaluation in TRL. Growth without TRL devaluation is 8.8 percent.
Customer deposits as a percentage of total deposits at 80.3 percent remains at a very healthy funding mix. It is worth to mention that KFH Kuwait dominates the market in saving accounts at market share of 42.5 percent.
Profit attributable to shareholders for Q-2 2018 was KD 51.2 million representing KD 8.2 million or 18.6 percent increase as compared to Q-2 2017. And that resulted from improved operating income by 14.9 percent while keeping operating expenses at marginally higher than comparative period at KD 75 million with increase of 2.7 percent only higher than last year. Profit attributable to shareholders for Q-2 2018 was higher by KD 7.3 million or 16.6 percent increase as compared to Q-1 2018 and that resulted from improved operating income by 6 percent with lower operating expenses by 5 percent, offset by higher provision by 6 percent.
Group C/I ratio for Q2-2018 three months period was only 37.5 percent as compared to 41.7 percent for Q118 and 42.8 percent for 2017 full year. This shows the continuation of improved efficiency.
Source Kuwait Times