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NBK net profit increases 12.8pc to $541m

KUWAIT, July 14, 2015

National Bank of Kuwait (NBK) has reported net profits of $541 million (KD163.4 million) for the first half of the year, compared with $479.4 million for the same period last year,  up 12.8 per cent year-on-year.

The NBK Group’s first quarter net profits included the gain from the sale of NBK’s 30 per cent stake in IBQ with a net impact of $75 million, said the statement.

The net profits for the second quarter reached $221.4 million, a year-on-year increase of 9.9 per cent, it said.

The total assets as of end-June reached $76 billion up 14.6 per cent compared to June last year, while total shareholders equity increased six per cent to $8.8 billion.

Customer loans and advances reached $42.1 billion as of end-June, growing 12.9 per cent year-on-year, while customer deposits grew by 10.1 per cent in the same period to reach $39.8 billion.

The bank maintained a low NPL/gross loans ratio of 1.55 per cent as of end-June down from 1.81 per ent a year ago, and NPL coverage ratio increased to 277 per cent, up from 230 per cent a year ago.

Nasser Al-Sayer, chairman, said “NBK continued to deliver solid growth and healthy performance with net profits growing at 12.8 per cent year-on-year during H1. This reflects NBK’s strong financial position, conservative management practices and the bank’s successful strategy.”

The solid H1 results reflect strong growth in the group’s core banking businesses. During the period, net operating income grew by 12.5 per cent year-on-year to $1.2 billion confirming NBK’s strong domestic and regional market positions.

The growth in net operating income is mainly attributed to solid growth in the bank’s net interest income and fees and commissions income with year-on-year growth rates reaching 12.6 per cent and 8.7 per cent, respectively.

“The overall operating environment in Kuwait continues to witness improvements. We see acceleration in the process of tendering, award and execution of the large infrastructure projects, which has reflected positively on NBK’s operational income and loan growth. As the leading bank in Kuwait, NBK continues to play a main role in the financing of these mega infrastructure projects.” Al-Sayer said.

Al-Sayer also highlighted that ‘the outlook for Kuwait and the GCC remains very positive despite the sharp drop in oil prices and the turbulence in Europe mainly due to the huge reserves and solid financial positions of these GCC economies. This allows for continuation of capital expenditure plans and spending on the development projects that Kuwait and the GCC have embarked upon.”

Isam Al-Sager, NBK’s group chief executive officer, said: “In Kuwait, the bank continued to strengthen its market position, maintaining its leading market share and growing across all business lines. Additionally, the acquisition of controlling stake in Boubyan Bank in 2012 continues to position NBK ahead of competition in Kuwait as Boubyan remains to offer strong growth outlook for the Group.

“On the regional front, NBK’s main focus remains on GCC markets as they continue to benefit from their strong sovereign positions and offer strong growth potential on the back of ongoing Government spending plans. Other than the GCC, the Egyptian market positive outlook presents growth potential for the Group. NBK seeks to strengthen its position in the Egyptian market on the back of positive developments in terms of security level and political environment,” he said.

Al-Sager also highlighted that during H1, NBK successfully concluded the issuance of $700 million additional Tier 1 securities at a rate of 5.75 per cent which is considered among the lowest for global institutions considering the current environment.

The issuance of the securities attracted significant interest from fixed income investors around the world as the issuance saw two times coverage in a record timing of six days. The securities issuance was the first in the Middle East and North Africa (Mena) region that is rated and carries an investment grade rating from an international rating agency.

The additional Tier 1 securities boosted NBK’s capitalisation levels with its Capital Adequacy Ratio reaching 16.1 per cent as of end-June  under the Basel III regime, which is comfortably higher than regulatory requirements. - TradeArabia News Service




Tags: NBK | increase | profit |

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