(MENAFN - Arab Times) Gulf Bank announced a net profit of KD 32.2 million for the financial year ended December 2013, up 4.1 percent against KD 30.9 million in 2012 with earning per share up from 11 fils in 2012 to 12 fils in 2013, at its Annual General Meeting held at Hotel Missoni, Sunday morning. The Bank's total assets for the same period amounted to KD 5,064.8 million, deposits stood at KD 4,086.1 million, total shareholders' equity was KD 483.1 million and total liabilities amounted to KD 4,581.6 million. Chairman Omar Kutayba Alghanim shared that Gulf Bank's results in 2013 reflected its steady progress as normalized operating profits grew to KD 99.6 million (excluding KD 9.8 million of non-recurring income) from KD 96.1 million (excluding KD 25.3 million on non-recurring income) in the prior year. "Continuing our strategy to build a fortress balance sheet, the Bank increased its precautionary general provisions to KD 158 million", he remarked.
The shareholders approved the recommended distribution of bonus shares of 5 percent on outstanding issued share capital as at Dec 31, 2013. Net interest income was high, KD 121.4 million, driven primarily by a decline in funding costs while fee income was lower at KD 26.2 million from KD 28.5 million in 2012, reflecting muted economic activity in the corporate sector. The capital adequacy ratio increased to 17.4 percent from 16.8 5 in 2012 and the cost to income ratio climbed to 34.5 percent from the previous year's 32.4 percent marker. Loans growth, especially in Consumer banking, was notable at 17 percent and the international portfolio witnessed healthy growth even as domestic corporate growth opportunities were limited, impacted by the sluggish roll out of the Kuwaiti development plan
Fitch ratings affirmed the bank's Long term Issuer Default Rating at 'A' with a 'Stable' outlook, upgrading the Viability Rating from 'bb-' to 'b'. Meanwhile Moody's changed the outlook on the bank's Baa2/Prime-2/D- rating to 'Positive' from Stable and Standard & Poor upgraded the long term rating to BBB with a 'Positive' outlook. He added, "The Bank is now strongly positioned for growth. During the past year, we introduced new strategic directions that will develop and broaden our offering and build on the solid foundations we have created in previous years. The focus is strongly on the needs of our customers, investments in our staff, and the development of our customer base. At the same time, we have started to develop exciting new opportunities which will allow us to further grow in corporate and consumer banking services. Of course, all of these initiatives are placed against the requirements of enhancing the Bank's reserves and financial capacity." The bank grew in terms of manpower and maintained its 63 percent Kuwaitisation ratio. The branch network increased to 57 branches across Kuwait, "In doing so, we will be closer to our customers, and better able to ensure that they receive the best possible banking services and that these are delivered both swiftly and efficiently.
Alghanim pointed out that during the previous year, the bank had witnessed a significant 38 percent reduction in non-performing loans (i.e., NPL) and a continued increase in the general precautionary reserves. "The Bank has maintained its aggressive efforts to reduce the NPL ratio, driving it from 10.9 percent in 2012 to 6.5 percent by December 2013 - a 40 percent reduction. Decreasing the NPL ratio is a strategic objective and of the highest priority for management. Further improving our credit strength, the Bank has increased the total coverage ratio of non-performing loans to over 185 percent", he said. Alghanim stressed that in 2014, the bank was committed to successfully executing its growth strategy, and providing both corporate and retail customers with an exciting alternative in the Kuwait market
"The Bank has continued to invest in its infrastructure to ensure it has both the robust internal controls and the ability to deliver the quality of services that our customers and regulators demand and deserve. It is particularly pleasing to note that earlier in 2013, Gulf Bank successfully completed the implementation of its Corporate Governance mandate as required by the Central Bank of Kuwait, which will ensure accountability, fairness, and transparency in our relationships with all our stakeholders", he said. To become the Leading Kuwaiti Bank, Gulf Bank would have to achieve three strategic goals by 2016 - completing its recovery, maximizing organic growth, and creating option value
He highlighted the bank's Corporate Social Responsibility programs, which were mainly focussed on the development of Kuwaiti youth and supporting entrepreneurship. He noted that private sector companies were responsible for encouraging private sector employment and ensuring greater entrepreneurial endeavours. Alghanim noted that the big international companies were founded by young entrepreneurs; he opined that the next Google or Apple could very well come out of Kuwait
"During 2013 we sponsored a number of activities in this area, including the INJAZ regional competition which was held in Kuwait for the first time with over 7,000 students from high schools and universities participating, representing 14 countries, the Global Management Challenge, NUKS, as well as job shadowing programs. Over the year, Gulf Bank had over 135 staff volunteers working together with our youth on various development programs in this area", he shared. Gulf Bank received numerous awards in various disciplines including: ' Best Bank in Kuwait' by The Banker, a leading Financial Times owned publication, 'Bank of the Year' from Arabian Business Magazine, 'Best Retail Bank' by Asian Banker, and 'Best Domestic Bank' by Banker Middle East. "We have shifted our focus for 2014 towards growth - through a relentless focus on the needs of our customers, investments in our staff, and a competitive drive in the marketplace. In parallel, we hope to finish the job of financial recovery, making sure stakeholders' interests are well protected", he asserted