(MENAFN - Arab Times) Al Ahli Bank of Kuwait (ABK) announced operating profits of KD 80.4 million for the financial year ended Dec 31, 2012, compared to KD 79.6 million in 2011.
The Earning per Share was 20 fils, and Return on Assets was 1%, while Return on Equity was 6%. Net profit amounted to KD 30 million. The decrease in profits compared to the previous year is mainly attributed to the increase of general and specific provisions taken by the bank against the irregular credit facilities, and to face the difficult operating conditions. The total credit provisions taken during 2012 amounted to KD 41 million.
The capital adequacy had improved to 27.7% v/s 25.1% in 2011 and was highest in the banking sector in Kuwait, and possibly among the highest in the region. This indicates the strong position of the Bank to cope with the difficult economic circumstance and absorb any future shocks. The Board of Directors has recommended to the General Assembly a cash dividend 6% of the nominal value per share (6 Fils per share), and 7% bonus shares (7 shares per 100 shares) to be distributed to the shareholders registered in the bank's records as on the date of the General Assembly Meeting. Such recommendation shall be subject to the approval of the ABK General Assembly Meeting and the competent regulatory authorities.
Commenting on these financial results, Ahmed Yousuf Behbehani, the Chairman of the Board, stated:
The good performance of our bank is the fruit of the conservative strategic policies and decisions adopted by the bank to face the prevailing difficult market conditions and challenges as well as the weak operating environment. ABK succeeded in strengthening its balance sheet by taking more provisions, replacing assets with better and more secured alternatives. The bank also managed to reduce the cost of funding, maintain its investment grade with "stable" outlook as evidenced by credit ratings recently released by the international credit agencies. Commenting on the precautionary provisions policy, Behbehani said:"ABK has been following a conservative policy, with more provisions taken against the irregular credit facilities amid the market conditions and operating environment which are still unstable, whether locally, regionally, or at an international level."
"Prudence is the core of the bank's operating philosophy and has been instrumental in the results we have achieved. We maintained our strengths in corporate banking - by far our main source of revenue, expanded our retail branch network, and grew the retail customer base to serve our customers in all areas in Kuwait. We also concentrate on increasing our business in Dubai and Abu-Dhabi in the UAE to provide corporate and retail services to Emirates and Kuwaiti companies, and individual customers", added Mr. Behbehani.
Behbehani also explained that the efficiency and quality customer service were the driving factors to achieve these goals. The bank also invests considerably in its human resources. ABK employees are highly trained to be qualified for providing quality customer service. As for the operating environment during 2013, Behbehani pointed out that in spite of the difficult conditions prevalent during 2012, yet we are optimistic for 2013 as we expect the launch of development and mega projects to move the wheel of economic activities, in the light of good oil revenues and balance surplus which can be invested in such projects.