KUWAIT: National Bank of Kuwait (NBK) reported net profits of KD 282.2 million ( $ 929.7 million) for the year 2015 compared with KD 261.8 million ( $ 862.6 million) in 2014, growing 7.8 percent year-on-year.
Total assets as of year-end 2015 reached KD 23.6 billion ( $ 77.8 billion) up 8.3 percent compared to year-end 2014, while total shareholders’ equity increased by 3.8 percent to KD 2.6 billion ( $ 8.6 billion). Customer loans and advances reached KD 13.6 billion ( $ 44.6 billion) as of year-end 2015, growing by 13.8 percent year-on-year, while customer deposits grew by 7.1 percent during the same period to reach KD 12.1 billion ( $ 39.7 billion) as of year-end 2015.
NBK continued to improve its asset quality ratios with NPL/Gross Loans ratio dropping to 1.34 percent as of year-end 2015 down from 1.50 percent a year earlier, and NPL coverage ratio increasing to 322 percent, up from 276 percent at year-end 2014.
NBK Board of Directors has proposed the distribution of 30 fils per share cash dividend, representing 30 percent of the nominal share value. The board has also proposed the distribution of a 5 percent bonus shares (5 shares for every 100 shares) for the year 2015.
Nasser Al-Sayer, NBK’s Chairman, said “NBK continued delivering solid growth and healthy performance in 2015. Net profits in 2015 reached KD 282.2 million, 7.8 percent year-on-year growth. This is a testimony to NBK’s strong financial position, its market leadership and successful conservative strategy that the Bank has adopted since its founding in 1952”.
Al-Sayer added that the solid results in 2015 reflect the Group’s focus on core banking businesses. During 2015, net operating income grew by 10.2 percent year-on-year to KD 728.8 million confirming NBK’s strong domestic and regional market positions.
“2015 was a year of deliverables for NBK, where we saw a confirmation of our earlier view that Kuwait is moving into a new era of economic development. Activity is picking up as the Government continues to deliver on the awarding and execution of mega projects. This has reflected positively on the growth trends of NBK’s operating income. During the year, several multi-billion dollar development projects have been awarded where NBK played a major role in their financing. With the size of our balance sheet, regional & international presence and relationships, we proved to be the largest beneficiary of the growing government expenditure, leveraging the high growth opportunity in the project finance business,” Al-Sayer highlighted.
Al-Sayer also added that “Despite the large drop in oil prices over the past year, our outlook for the Kuwaiti economy remains positive. Kuwait has ample liquidity and substantial buffers making the impact of lower oil prices relatively less compared to other regional economies. The government has affirmed in several occasions its commitment to continue with its capital expenditure plan mainly on infrastructure projects which we believe will relatively contain the impact of a period of lower oil prices on the operating environment in Kuwait.”
Isam Al-Sager, NBK’s Group Chief Executive Officer said; the solid results of NBK confirm the Bank’s resilience and its ability to continue to grow and progress. “We continue to emphasize on the Group’s strategy focusing on market leadership domestically and strong positioning regionally, all serving our efforts for better diversification and balancing of sources of income”.
“Domestically, NBK continues to defend its market share, achieving growth in all business lines. The acquisition of a 58.4 percent stake in Boubyan Bank in 2012 was a long term strategic move by NBK to strengthen its domestic market position. Boubyan Bank continues to acquire market share and its contribution to NBK Group profits is becoming more material.”
Al-Sager also added that regional and international operations remained very lucrative supporting the bank’s income diversification strategy. NBK Group generated 27 percent of the year’s profits from its branches, associates and subsidiaries outside Kuwait affirming the banks’ successful strategy of regional and international diversification.
Earlier during the year NBK concluded its exit from International Bank of Qatar (IBQ) selling its 30 percent stake when attempts to raise it to a controlling stake were not successful. We have achieved good returns on our investment in IBQ over the years and this exit will strengthen our position to seize better opportunities when present in Qatar as the Qatari market remains important for us.” Al-Sager added.
Al-Sager also highlighted that the Egyptian market remains a key market for the growth of NBK on the back of improving business sentiment and political stability. “Egypt continues to offer an exceptional growth opportunity and we generally target strengthening our position in the Egyptian market in the coming period. In an effort to achieve unification and integration at the Group level, we recently rebranded our Egyptian subsidiary NBK-Egypt”.
During 2015, NBK boosted its capital base through issuing $ 700 million Additional Tier-1 (AT-1) securities and KD 125 million of Tier 2 subordinated bonds. The issuances are used to improve NBK’s capital as per Basel III requirements and the directives of the Central Bank of Kuwait and both issuances were highly received by investors attracting two times subscription in both instances. As of end-December 2015, NBK’s capital adequacy ratio (CAR) reached 16.8 percent exceeding regulatory requirements.
NBK continues to enjoy collectively the highest ratings among all banks in the Middle East from the three international rating agencies Moody’s, Fitch Ratings and Standard and Poor’s. The Bank’s ratings are supported by its high capitalization, prudent lending policies, and its disciplined approach to risk management, in addition to its highly recognized and very stable management team. NBK was also named among Global Finance’s list of the 50 safest banks in the world for the tenth consecutive time.
NBK enjoys the widest banking presence with a local and international network reaching 4 continents. NBK’s international presence spans many of the world’s leading financial centers including New York, Europe, GCC, Middle East, Singapore as well as China (Shanghai).