EPS 15.64 fils, an increase of 13%: Al-Marzouq
KUWAIT: Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al-Marzouq said that KFH has, by the grace of Allah, reported net profits of KD 107.7 million for the first half of 2019 for KFH shareholders compared to KD 95.2 million for the same period last year i.e. an increase of 13.1 percent.
Total finance income for H1 this year reached KD 460.5 million an increase of 8.6 percent; and net operating income reached KD 240.7 million i.e. a growth of 2.1 percent compared to the same period last year. Cost to income ratio dropped to reach 38.7 percent for H1 2019, compared to 39.5 percent for the same period last year. Earnings per share for H1 of 2019 reached 15.64 fils, compared to 13.84 fils for the same period last year i.e. an increase of 13 percent.
Total assets increased by 5.5 percent compared to the end of last year to reach KD 18.747 billion, i.e. an increase of KD 976.8 million at the end of H1 this year. Finance receivables reached KD 9.237 i.e. an increase of 0.5 percent compared to end of last year.
Investment in Sukuk reached KD 2.145 billion an increase of KD 582 million i.e. a growth of 37 percent compared to end of last year and the majority of the balance represents investments in Sovereign Sukuk. Depositors' accounts reached KD 12.837 billion i.e. an increase of KD 1.057 billion or 9 percent compared to the end of last year.
Al-Marzouq said that the positive financial results stemmed from the focus on the core banking activities. They were in line with the set plans and a reflection of the stable and sustained growth of profitability, encompassing all indicators. This testifies to the success of KFH strategy and its solid financial position of the bank, despite the tough adverse economic and political developments.
Al-Marzouq pointed out that over the last five years KFH has succeeded in increasing the overall assets value, while maintaining their highest possible standard of quality and diversity to limit risks, and also explained that the continued rise in net profit attributable to shareholders of the bank is due to the increase in total operating income and continuous decrease in the operating expenses, as well as the steady growth rate of the total assets. He asserted that efforts are focused on maintaining the profit rate growth, the credit facilities return and other financial indicators as well as implementing the best banking practices, full compliance with supervisory and sharia rules and directives and the best operational parameters. This will be accompanied by continuous improvement in the cost-income ratio, taking advantage of technology and administrative and organizational plans. These plans include raising employee efficiency, innovation, operational quality and customer care, ensuring the interests of the shareholders and depositors and increasing the return on their investments.
Kuwait Vision 2035
Al-Marzouq confirmed that several initiatives were launched in the first half of the current year reflecting great interest in strengthening KFH's position, value and name in the local market with a view to expanding market share, enhancing the national economy and realizing the "Kuwait Vision 2035".
He called for launching more initiatives and executive plans that translate Kuwait's future vision into concrete steps and real projects leading to comprehensive development and reestablishing Kuwait as one of the best and most vital commercial regional and international hubs.
Al-Marzouq stressed the necessity of having a strong market for projects capable of absorbing banks liquidity and employing Kuwait's ideal potential and many abilities whereby the private sector has the largest part. This will expand its role and achieve comprehensive economic returns through energizing the market, solidifying the economic structure, boosting competition with the subsequent social returns of developing national strengths and expertise and creating job opportunities outside the public sector. He pointed that toward this goal, "KFH Auto" Showroom was opened in Shuwaikh. Being the largest and newest Showroom in the Middle East, it includes more than 30 brands of cars, motorcycles and boats. As an integrated city, customers can also sell and purchase new and used cars at "KFH Auto". Car rental, valuation, traffic and insurance services are also offered at the showroom. In line with intelligent building systems, "KFH Auto" includes charging station for electric vehicles and special section for ladies. This achievement strengthens KFH's role in serving the national economy and the retail market as well as boosting traders and agents sales in a context of cooperation and partnership.
As for the customers segments, he added that KFH introduced quality services for several segments with the aim of developing relationships with them and meeting their requirements. KFH was the first Kuwaiti bank to launch the exclusive Infinite Credit Card for the private banking customers, in addition to introducing the "Car financing service outside Kuwait", making Turkey the fourth country in the service that includes Jordan, the USA and Egypt. It also introduced money transfer service in Egyptian pound to Egypt. The service is available online or through branches. KFH also offered prizes and benefits to its customers. He pointed out that the bank is striving to make its services the best and most efficient to its customers, thereby boosting its competitive edge and market leadership.
Project financing
In line with its vital role in the local economy, Al-Marzouq stressed on KFH continuing pursuit to be a leader in the major infrastructure projects in terms of finance and support. As per the regulations and instructions, KFH provided funding to several companies that implement major economic and development projects. In addition, KFH is strengthening its position as a leader in financing small and medium-sized enterprises (SMEs).
Al-Marzouq said that the FinTech current trends in the banking industry are the most important and critical developments in the banks' history. These trends pose challenges that would change the traditional banking industry model. "As a strategy, KFH uses state of the art technology in the digital banking realm, considering customers' expectations as well as innovating the appropriate products and services. With Technology development, KFH is enhancing the products and services, creating new innovative dimensions while reducing expenses", He explained.
Al-Marzouq added that Blockchain helps to overcome the traditional bottlenecks and administrative requirements in the payment systems and achieve flexibility, reliability and financial inclusion. As it successfully enables people to access several banking services around the world, the accessible "smart phone" has become a key and active component in KFH banking services.
"A full package of KFH's digital services is becoming more integrated and is supported by the use of robotics and artificial intelligence in the operations for the first time in Kuwait and the launch of the smart e-branch (KFH-Go). Through KFH-Go branches in Ishbiliya and Jabriya, customers can do 90 percent of their traditional banking transactions. KFH also added new services to KFH-Online smartphone app and introduced the first ever Mobile Deposit of Cheques in Kuwait, through KFH Online app," he explained.
Global role
He noted that KFH has a regional and global leading role in Sukuk issuances and Islamic finance services. KFH Group has succeeded in consolidating its position in Sukuk market, indicating that Sukuk is one of the most important Islamic financial products. Since the beginning of the year, the bank has arranged issuances worth more than USD 5 billion for companies and governments. KFH Capital, the investment arm of KFH Group, has recently succeeded in arranging Sukuk issuances for Turkey, the Emirate of Sharjah and Saudi Telecom Company, in addition to launching a new index to follow and analyze dollar- denominated Sukuk issuances in the global markets.
By strengthening coordination at the Group level, KFH succeeded in achieving high results. Moreover, KFH focuses on human resources, especially Kuwaiti youth and national expertise and provides them with opportunities to develop their capabilities and skills to assume responsibility and lead the Group in terms of development and growth.
Al-Marzouq noted that KFH's continuous holding of the international rating agencies positive ratings, as well as receiving eight top-level awards by renowned world entities concerned with monitoring the performance of banks and financial institutions are positive indicators of sound performance by the Group's banks.
He added that winning the Euromoney Award for Excellence 2019 - "Best Bank in Kuwait" is a confirmation of KFH's success, solid performance and its global leadership as an Islamic financial institution and reflects the customer confidence in the bank. This award is a culmination of KFH's efforts in providing the highest level of Islamic financial services locally, regionally and globally. The Euromoney award for excellence is based on several criteria including bank's achievements, innovations, performance, banking services, size, profitability, ability to demonstrate growth, relative outperformance compared with peers and the ability to adapt to changing market conditions and client needs. Al-Marzouq extended his thanks to stakeholders and customers for their support and trust in KFH's operations and activities and to the regulatory authorities. He commended the executive management and staff for their outstanding efforts.