KUWAIT: Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al-Marzouq announced that KFH has, by the grace of Allah, achieved a net profit for its shareholders of KD 482.9 million ($1.58 billion) up to the end of the third quarter of 2024, an increase of 4.6 percent compared to the same period last year. The profits up to the end of the third quarter of 2024 are the highest in the Kuwaiti banking sector. Earnings per share up to the end of Q3 2024 reached 29.62 fils; an increase of 4.8 percent compared to the same period last year.

Net financing income up to the end of Q3 2024 reached KD 835.1 million; an increase of 17.0 percent compared to the same period last year. Total operating income up to the end of Q3 2024 increased, supported by an increase in all core activities to reach nearly KD 1.2 billion; an increase of 6.9 percent compared to the same period last year. Net operating income up to the end of Q3 2024 increased to reach KD 754.0 million; an increase of 1.9 percent compared to the same period last year.

Financing receivables as of the end of Q3 2024 reached KD 19.1 billion, affected by the sale of Kuwait Finance House - Bahrain, as well as the impact of foreign currency fluctuations during the current period. Total assets as of the end of Q3 2024 amounted to KD 36.3 billion. Shareholders’ equity amounted to about KD 5.4 billion as of the end of Q3 2024. Depositors’ accounts as of the end of Q3 2024 amounted to KD 19.9 billion.

In addition, the capital adequacy ratio reached 17.68 percent which is above the limit required by regulators. This ratio confirms the solid capital base of KFH.

Exceptional financial results

Al-Marzouq highlighted that KFH has achieved record financial results by the end of the third quarter of 2024, with growth in the main indicators. This success is attributed to the strong performance and disciplined implementation of KFH’s strategy, along with a cautious approach to risk management. The bank has also focused on diversifying the financing portfolio, boosting the capital base, and improving the quality of assets to ensure KFH‘s ongoing financial strength and solid creditworthiness.

Al-Marzouq added that the record financial results were achieved in conjunction with the completion of the merger between KFH and (formerly) AUBK, the largest in Kuwaiti banking history. This marks the beginning of a new successful phase for KFH. The merger has become a successful model in the region, creating a major financial entity in the Islamic finance industry locally, regionally, and globally. It solidified KFH’s position as a benchmark in the industry and set the stage for its goal to be listed among the top 100 banks in the world.

Successful conversion

Al-Marzouq explained that KFH Group has demonstrated its capability in advancing the future of Islamic finance worldwide. He highlighted the rapid and successful conversion of the operations of AUB-Bahrain, AUB -UK, and AUB-Egypt to sharia-compliant banking services. This supports KFH Group’s strategy to contribute to expanding the Islamic finance sector on a local, regional, and global scale.

Supporting Kuwaiti businesses

Al-Marzouq emphasized that KFH’s support for Kuwaiti businesses and development plans stems from its significant national role and its distinguished economic position as Kuwait’s largest bank by market capitalization, the world’s second-largest Islamic bank, and a highly competent, financially stable, and experienced institution. He noted that KFH’s financing activities have diversified across various sectors, including oil, petrochemicals, energy projects, infrastructure, startups, environmentally friendly ventures, and real estate development. KFH has been a strategic partner in funding all major development projects.

Al-Marzouq stressed KFH’s commitment to a transparent framework aimed at creating a more sustainable banking model that incorporates environmental, social, and governance (ESG) aspects. He highlighted the ongoing progress of sustainability initiatives at KFH, with a focus on achieving new milestones and further integrating sustainable practices into the bank’s operations to support its growth. Al-Marzouq also underscored the bank’s commitment to enhancing financial inclusion and promoting green financing products as part of its sustainability efforts.

KFH’s addition to the FTSE4Good Index Series for emerging markets highlights the increasing focus of KFH on environmental, social, and governance (ESG) standards. The bank also achieved an "A” rating on the MSCI ESG Index due to its strong commitment to ESG practices. Additionally, KFH was recognized for having the top ESG risk assessment on the Sustainalytics Index, receiving a score of 24.7, the highest among Kuwaiti banks.

Societal leadership

Al-Marzouq confirmed KFH’s commitment to upholding its role as a leading example of social responsibility and maintaining its status as a respected national financial institution that fulfills a societal purpose and actively participates in executing numerous strategic community projects.

KFH’s Acting Group Chief Executive Officer, Abdulwahab Iesa Al-Rushood stated that the bank’s financial results up to the third quarter of 2024 demonstrate the stability and robust solvency of KFH. He added that the bank’s successful strategic plan and high-quality assets have enabled it to maintain profitability and strengthen its financial position. This success validates KFH’s vision and business plan, which focus on sustainable profits, promoting financial position, improving cost-to-income ratios, managing bad debts, increasing operating income, and bolstering liquidity and capital adequacy ratios.

A giant banking group

Al-Rushood commended KFH for its distinguished status as a giant banking entity that attains sustainable profits, competitive performance, and international presence across approximately 640 branches in 12 countries, notably including Kuwait, Bahrain, Turkey, Egypt, Britain, and Germany. He noted that KFH surpasses all other Kuwaiti banks and companies listed on Boursa Kuwait in terms of market capitalization, which exceeds KD 12 billion.

Digital transformation journey

Al-Rushood shed light on KFH’s achievements in digital transformation and improving customer experience to meet their evolving needs. This was achieved by continuing collaboration with fintech companies, developing technological infrastructure, integrating artificial intelligence into global operations, and ensuring that all services and products offered to customers meet high standards of speed, quality, and security. Al-Rushood highlighted Tam Bank, introduced by KFH as Kuwait’s first shariah-compliant digital bank, along with the digital payment platform Zaheb for merchants, as examples of KFH’s dedication to offering top digital financial solutions to customers of various segments.

Best institution in manpower nationalization

Al-Rushood emphasized the high quality of KFH and its commitment to implementing replacement, nationalization, and training programs within the private sector in Kuwait. This recognition of KFH as the top institution for manpower nationalization in Kuwait underscores their ongoing efforts to support and enhance the skills of young graduates and experienced professionals. KFH has a comprehensive strategy in place to attract, develop, and nurture Kuwaiti talent, ensuring that individuals have the necessary skills and experience to excel in leadership roles and contribute effectively to KFH’s success. He mentioned that KFH won 13 distinguished global awards in the field of Human Resources for 2024 from the renowned Brandon Hall Group.

Rankings & awards

Al-Rushood highlighted the fact that KFH continues to receive esteemed international ratings and awards, solidifying its position as a top financial institution in the region. He specifically commended KFH Group for their recent achievements, such as being awarded Kuwait’s Best Bank, Kuwait’s Best Digital Bank – tam digital bank, Kuwait’s Best Bank for ESG by Euromoney. Additionally, KFH was recognized as the top listed company in Kuwait and ranked tenth in the Middle East by Forbes Middle East in their 2024 ranking of the top 100 listed companies. KFH has ranked first in the Kuwaiti banking sector in terms of growth and return on risk for this year’s Top 100 Arab Banks Rankings from The Banker. These accomplishments, along with numerous other international awards, further establish KFH’s significant role in the Islamic finance industry.

Al-Rushood expressed gratitude to shareholders and customers for their trust and to the Board for their unwavering support. He also thanked the Central Bank of Kuwait and regulatory authorities for their support to the banking system. He also expressed appreciation for the executive management and all employees for their dedication and hard work.