(MENAFN - Arab Times) Commercial Bank of Kuwait announced operating profit of KD 101.7 million, up by 8.5% compared with KD 93.8 million for 2012. The net profit after provisions amounted to KD 23.5 million for the financial year ended Dec 31, 2013, an increase of KD 22.4 million compared to the net profit of KD 1.1 million during 2012. In view of these encouraging financial indicators and profitability of the Bank during 2013, the Board of Directors decided to recommend to the General Assembly a cash dividend distribution of 7 fils per share (7% of par value) and bonus shares of 11%. This recommendation is subject to the approval of the competent regulatory authorities.
In continuation of its prudent policy, the bank used part of its operating profit to enhance its provisioning base. The total provisions held with the bank against its credit portfolio as at the end of the Dec 31, 2013 amounted to KD 128.2 million and the provision coverage ratio for NPLs improved significantly to 367% at the end of 2013 compared to 169% to 2012. Commenting on the bank's financial results, Yacoub Al Ebrahim, official spokesman said Commercial Bank's total assets at the end of December 2013 reached KD 3.9 billion (December 2012: KD 3.7 billion) with shareholders equity of KD 561.8 million (December 2012: KD 552.1 million). The capital adequacy ratio at the end of December 2013 is 18.38% which exceeds the minimum 12% required by the Central Bank of Kuwait, and is more than twice the minimum ratio mandated by Basel Committee. The loans and advances grew by 8.9% and customer deposits increased by 16.5% during the year.
The official spokesman drew the attention of the bank's shareholders and customers and financial analysts to the internationally recognized credit quality indicator, namely non-performing loans to total credit ratio emphasizing that it showed improvement with non-performing loans ratio falling from 2.76% of total loans in 2012 to 1.35% in 2013 which reflects the Bank's improving the quality of its credit portfolio by 50% during one year. The bank continues to demonstrate its cost leadership with operational efficiency, a competitive advantage for the bank, which continues to maintain one of the lowest cost/income ratios among Kuwait banks at 24.1 % during the year ended on Dec 31, 2013. Yacoub Al Ebrahim further commented that within the bank's efforts to diversify its income sources and mitigation of risks, particularly those related to geographical and sector concentration, Commercial Bank has recently extended its lending activities in international financing, indicating the upgrade by the Capital Intelligence of the Long Term Foreign Currency Rating from BBB to A- and Financial Strength Rating from BBB to BBB which reflects International Financial Community's confidence on the improving financial indicators trend of the bank this year.
He pointed that the significant improvement in the bank's financial indicators is attributed to its prudent policy adopted over the few past years by using the operating profits to enhance provisions and taking initiatives to reduce the NPLs ratio as well as reassessment of some collaterals held with the bank to be in line with the current market conditions.
He mentioned that the bank will continue to pursue a balanced strategy that will focus on analysing available growth opportunities according to the current economic situation, with a particular emphasis on core business activities with better management of risks and risk adjusted returns.
Al Ebrahim took the opportunity to thank the bank's shareholders, valued customers and staff and regulatory authorities emphasizing that the Bank's Management continues to take all required procedures for safeguarding stakeholders' interests.