(MENAFN- Arab Times) "This year's results are conclusive evidence of Kuwait Finance House's major success in strengthening the Bank's position and improving its performance. KFH has achieved remarkable growth in 2015 with net profit reaching KD 145.8 million compared to KD 126.5 million in 2014, thus marking an increase by 15.3 percent. This increase comes on the back of an increase in net financing income which reached KD 393 million compared to KD 363 million in 2014, an increase exceeding 8 percent", were the words of Hamad AbdulMohsen Al Marzouq, Board Chairman for Kuwait Finance House, as he spoke at the bank's 37th annual general meeting Monday.
The bank has continued to enhance its business model in order to provide the best services and improve service quality for valuable customers. The bank has also focused on enhancing its overall infrastructure, managing operations on both organizational and operational levels, adopting the latest cutting-edge e-banking technology, providing sustainable sources of income, optimizing costs and divesting non-income generating assets, all of which are in the best interest of shareholders.
The bank's global expansion plans are still in progress to match its ambitious strategy to lead the global development of Islamic financial services. "We have inaugurated the Bank's new office in Frankfurt, Germany becoming the first integrated Islamic bank operating in one of the leading Eurozone economies through Kuwait Turkish Participation Bank (KTPB). We have expanded our branch network locally, regionally and globally. Our branch network today comprises of 450 branches, which has reinforced the Group's position and presence in local, regional and global markets. In Turkey, KTPB has achieved remarkable results".
Profitability has improved in KFH Bahrain. Significant improvements have been made on the bank's online banking services, thus aiming to provide modern and convenient banking services to its valuable clients.
The Bank is in the process of issuing more Sukuk to governments and companies worldwide to participate in the development and marketing of this product, which is considered as the Shari'a compliant alternative to bonds. This product will facilitate in providing the financing required for several projects based on innovative mechanisms and methods and reinforce the bank's participation in major projects. In 2015, a US$ 500 million Sukuk issuance was concluded for Sharjah Islamic Bank.
KFH has also structured a US$ 500 million lease finance transaction for Sharjah Electricity & Water Authority (SEWA) bearing in mind that KFH's share therein reached US$ 120 million, the largest share among participating banks. Apart from this, KTPB has issued a RM 300 million Ijara Sukuk (US$ 81 million). This issuance represents the first tranche of a US$ 540 million Sukuk program.
Despite the drop in oil prices and regional financial crises, which continue to cast a shadow over financial institutions worldwide, Kuwait's economy has remained stable by the grace of Allah. International capital markets have seen increased volatility along with a decline in growth expectations. The Kuwait economy, on the other hand, has been supported by financial policies adopted by the Ministry of Finance. The Finance Minister has submitted a draft law to allow for the issuance of Islamic finance Sukuk and bonds in order to finance any deficits through local banks. This was done in coordination with the Central Bank of Kuwait (CBK). This process aims to create a stable investment environment and diversified growth opportunities through the completion of projects and initiatives adopted in the new 5-year plan.
In continuation of our endeavor to achieve our vision to be a leading group in banking services regionally, we have focused on providing distinguished and unique services to fulfill our customers' needs, exceeding their expectations and fulfilling market demands. We have developed a new strategy covering the next 3-year period aimed at directing KFH's future.
The Bank continued to manage risks efficiently and make the required provisions during the year in accordance with best practices. As a result, KFH has maintained its credit rating, which reflects the Banks leading position in the Kuwaiti banking sector and the strength of its financial position and high liquidity levels.
KFH has observed CBK instructions and implemented Basel III requirements, which were applied to all Kuwaiti banks in early 2015. KFH's capital adequacy ratio reached 16.67 percent as at the end of 2015, higher than the required limit of 13 percent.
We are committed to achieving significant returns for shareholders in the long-run. The Board of Directors have recommended the distribution of a 17 percent cash dividend, a 10 percent bonus share dividend and distribute returns on investment deposits and saving accounts as shown in table No. (1).
Account Type
2015 2014
"Al-Khumasiya" Investment Deposits 2.35% 2.34%
"Mustamera" Investment Deposits 2.15% 2.06%
"Al-Sedra" Investment Deposits 1.50% 1.68%
"Dimah" Investment Deposits (6 months) 1.30% 1.45%
"Tawfeer" Investment Accounts 0.73% 0.93%
In 2015, KFH received several distinguished and prestigious awards in banking including; Best Islamic Financial Institution in the GCC, Best Bank in Kuwait, and Best Islamic Bank in Kuwait. In addition, Fitch Ratings affirmed KFH's rating at A+ with stable outlook.
Rating Agency Long Term Short Term Outlook
Fitch A+ F1 Stable
Moody's A1 P-1 Negative
Standard & Poor's A- A-2 Stable
Profit per share increased by approximately 15 percent to reach fils 31.1 at the year-end. Total assets exceeded KD 16.5 billion at the year-end, supported by a strong finance portfolio, which exceeded KD 8 billion. Customers' deposits exceeded 10.8 billion while shareholders' equity increased to KD 1.8 billion, an increase of 2 percent."
These strategies and results could only be achieved through highly qualified human resources and well trained teams. Accordingly, KFH is keen on providing utmost care to Human Resources, thus achieving significant progress in employee satisfaction according to job satisfaction indicators. Executive management has strengthened transformation pillars of all employees in order to upgrade KFH's competencies.
Our achieved success is mainly attributed to our employees and the trust bestowed upon us by our shareholders. To this end, we convey our sincere gratitude and appreciation to them for their continuous support. Sincere thanks and appreciation are also extended to the Bank's honorable Fatwa & Sharia Supervisory Board for their distinguished efforts to support the credibility of our functions and activities. On this occasion, I would like to reassure our valuable customers and shareholders that KFH will continue to focus on availing the best opportunities, increase efforts to achieve sustainable growth as provided in the strategic plan, increase profits and returns, and strengthen KFH's reputation and image locally, regionally and globally.
"Last and not the least , I would like to convey our sincere thanks and appreciation to His Highness the Amir of Kuwait Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah, may Allah safeguard, His Highness the Crown Prince Sheikh Nawaf Al-Ahmed Al-Jaber Al-Sabah, may Allah safeguard, and His Highness Chief Minister Sheikh Jaber Al-Mubarak Al-Sabah, may Allah safeguard. Our thanks and appreciation are also extended to His Excellency Dr. Mohammed Al-Hashel, Central Bank of Kuwait Governor and all regulatory authorities for their ongoing support to the banking sector in the State of Kuwait", concluded Al Marzouq.
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