Net profit grew by 15.1% in first quarter of 2019, total assets reach KD 27.4bn

KUWAIT: The National Bank of Kuwait ("NBK", the "Bank" or the "Group") has announced its financial results for the first quarter of 2019. NBK reported a net profit of KD 107.7 million ($354.1 million), which increased by 15.1 percent in the first quarter of 2018, with total assets increasing by 2.4 percent year on year to reach KD 27.4 billion ($90.1 billion).

Commenting on the results, NBK Group Chairman, Nasser Al-Sayer, said: "NBK's strong results in the first quarter of 2019 are a continuation of the Bank's robust performance, which reflects the success of the Group's strategy to consolidate our leading position in the domestic market while continuing to expand the scope of our international operations to further diversify the Group's profit streams and ensure continued future growth.

NBK's performance in the first quarter of 2019 confirms the solid financial fundamentals of the Group and its ability to generate revenues from core banking activities. Net operating income increased by 5.7 percent year-on-year to KD 225.6 million ($741.5 million), with growth recorded across almost all business lines.

The domestic operating environment is promising as the government continues with its development plan, thus increased capital spending. Kuwait's fiscal position is better than peers given the substantial buffers and strong sovereign ratings; creating room for acceleration in spending despite volatile oil prices and the expected slower growth rates globally.

Furthermore, NBK remains committed to support and finance development projects under Kuwait's 2035 vision. We aspire to remain the leaders for mega projects financing and play our role in supporting the prosperity of the national economy."

NBK Group CEO, Isam Al-Sager, commented: "We are very proud of the strong financial results reported for the first three months of 2019 as it reflects the success of our diversification strategy and leadership of the Kuwaiti banking sector. Our strategy was further bolstered through the Bank's Islamic banking arm, Boubyan Bank, which continues to contribute positively to the Group's bottom line and supports the maintenance of a dominant share in the local market.

The strong growth in financial results coincides with NBK's strategy of maintaining asset quality and maximizing the value to shareholders. This is clearly reflected by the improvement in our profitability indicators; where the return on average assets reached 1.59 percent compared to 1.44 percent in the first quarter of 2018, while the return on average equity reached 14.5 percent against 13.2 percent in the first quarter of 2018. Moreover, the Bank continued to maintain high levels of capital, with capital adequacy ratio reaching 16.9 percent as of end of March 2019; exceeding the minimum regulatory requirements.

We aim to better utilize our international operations with an aspiration to further increase its contribution to the Group's profits. In the first quarter of 2019, our international operations contribution to total Group's profits reached 25 percent. In Egypt, we continue to focus on increasing our market share in the retail sector, relying on the transfer of our expertise in providing leading technological solutions to the region's largest market in terms of population; while in KSA, we will seek to grow the client-base and AuMs of our recently launched NBK Wealth Management Company.

In France, NBK's Paris office was converted into a full subsidiary as a conservative and long-term positioning no matter how Brexit ends up. This will guarantee the Bank's ability to continue serving clients with business ties within Europe and MENA.

Our diversification strategy is not only limited to our geographical presence, it focuses also on diversifying our products and services offered to our clients. The Bank is investing in implementing the digital transformation strategy via various initiatives that includes all the activities and markets in which we operate. This has already helped us achieve our long-term goals, ensuring that we maintain our leadership and provide the best banking services," Al-Sager concluded.

Performance highlights - Q1 2019

• Net profit attributable grew by 15.1 percent y-o-y to KD 107.7 million ($354.1 million)
• Net operating income reached KD 225.6 million ($741.5 million), growing 5.7 percent on the first quarter of 2018
• Customer loans and advances increased by 8.1 percent y-o-y to KD 16.0 billion ($52.7 billion)
• Customer deposits reached KD 14.7 billion ($ 48.2 billion) increasing by 2.8 percent y-o-y
• Strong capitalization with Capital Adequacy Ratio of 16.9 percent, in excess of regulatory requirements
• Consistent long-term credit ratings a reflection of conservative approach to risk
• Robust asset quality metrics with the NPL/gross loans ratio at 1.51 percent and an NPL coverage ratio of 206.8 percent.