02/02/2025
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02/02/2025
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KUWAIT CITY, Feb 02: Mr. Isam Al-Sager, Vice Chairman and Group Chief Executive Officer of National Bank of Kuwait (NBK), stated that despite the continuing challenges arising from macroeconomic and geopolitical tensions; NBK demonstrated its strength and adaptability in navigating a dynamic global landscape towards achieving robust financial performance in 2024.
On the sidelines of the 2024 Analyst Conference, Al-Sager revealed that NBK reported net profits of KD 600.1 million for the year 2024; growing by 7% on an annual basis. As for the three-months ended December 2024, net profits grew by 10.5% year-on-year.
He highlighted that net operating income grew by 7.2% year-on-year to reach KD 1.3 billion; mainly underpinned by the growth recorded in net interest income, higher fees & commission and FX income.
Al-Sager further emphasized that NBK continued excelling with its successful diversification strategies and harnessing technological innovation to further seize emerging opportunities across different segments and geographies while demonstrating agility, resilience, excellence in creating long-term value for all stakeholders. Return on average assets for the period reached 1.55% while our return on average equity reached 15.1%.
“We remain committed to delivering exceptional value to our clients by introducing innovative products and services tailored to their diverse needs. As such, we will continue to prioritize innovation and leverage technology to preserve our leadership, foster sustainability while capitalizing on emerging opportunities and our unique access to Islamic banking,” Al-Sager emphasized.
“Beyond Kuwait, our international business continued to expand its offerings in key markets further diversifying our income streams, mitigating risks and optimizing costs. Likewise, our wealth management business continued broadening its presence and offerings to enrich our client experience,” he continued.
Al-Sager also highlighted that in 2024, NBK distinguished itself through its unwavering commitment to sustainability, demonstrating a strong dedication to environmental stewardship.
“During the year, we became the first bank in Kuwait to join the Partnership for Carbon Accounting Financials (PCAF) and the lead issuer of the first green bond out of Kuwait. This testifies to the Group’s progress towards a more sustainable future and its commitment to play a pivotal role in shaping the future by mobilizing the necessary capital to drive the transition,” he confirmed.
When asked about whether the bank currently has acquisition plans, Al-Sager responded, “We continue executing against our current strategy and monitoring the market for opportunities. However, with any potential plans it must be of added value to our shareholders and stakeholders.”
Kuwait’s Economic Landscape
Discussing Kuwait's economy, Al-Sager noted that in Kuwait, although headline activity was relatively subdued in 2024, the near-term outlook implies a strong rebound in 2025. With an expected unwinding of voluntary production cuts by OPEC+, a modest recovery in consumer spending, credit growth, projects awards and a possible rise in public investment.
He explained that GDP growth in Kuwait should recover to reach 3.0% in 2025. On the other hand, inflation continued to trend lower to average 3.0% in 2024 and is expected to continue the same stance with headline rate averaging 2.5% in 2025.
As for domestic project activity, Al-Sager noted that Kuwait witnessed a strong rise in the awards of each quarter throughout 2024 that boosted the yearly total to KD 2.74 billion, exceeding the value of awards in 2023 by 45%. The momentum foreseen is expected to carry in 2025 as the government continues to push with the execution of its development agenda. Moreover, an estimate value of KD 7.8 billion worth of awards is in the pipeline for the year.
Public Debt & Real Estate Financing Laws
Responding to a question about Kuwait's potential return to the global bond markets, Al-Sager pointed to the government's recent confirmation that it is targeting to develop the domestic economic landscape via various financial instruments, with a particular focus on the debt law. He affirmed that while the debt law is expected to go through, the government issuances will depend on the market conditions.
As for the real estate financing law and its mechanism, Al-Sager noted that discussions are ongoing between various stakeholders including banks indicating good progress in finalizing the initial draft very soon, confirming that other than the mentioned, there are no material updates on the law, but serious steps are in place to passing the law with some adjustments under discussions that may allow its implementation soon.
GCC & Global Economy
Al-Sager remarked that GCC economies fared relatively well to recent economic shocks while poised for accelerated growth this year on the back of the roll-out of reforms and diversification efforts that are supporting business activity. On the contrary, significant geopolitical developments could disrupt supply chains in the global oil and gas sector and increase its volatility on the demand and pricing side.
Regarding the global economic outlook, Al-Sager noted that it continues to be characterized by moderate growth projections as performance and monetary policy diverged across regions. Additionally, potential inflation pressures, heightened regional conflicts and uncertain policy direction continued to dominate the scene.
Stable Economic Environment
Meanwhile, Mr. Sujit Ronghe, Group CFO of NBK, stated that although, global and regional geopolitical situation remained unstable in 2024, an overall stable operating environment in Kuwait and the higher interest rate regime for a significant part of the year, have generally benefitted the Bank.
He highlighted that the strong bottom-line performance was driven by a combination of business volume growth, a relatively high-interest rate environment, and solid fee and foreign exchange income, all contributing to a robust operating performance. Investment securities also recorded a year-on-year growth of 10.8% compared to December 2023.
Ronghe stated that profit before provisions and taxes for 2024 stood at KD783.2m, a growth of KD42.9m, +5.8% over 2023. Net operating income increased by KD84.4m, while net interest income stood at KD980.1m for 2024, a growth of 8.3% over 2023.
Robust Financial Position
Ronghe emphasized that the Group’s Balance Sheet remains strong with stable credit quality. NBK’s capital base, along with the ability to generate healthy operating profits, provides a strong credit loss-absorption capacity. He also confirmed that NBK Group continues to benefit from its unique position amongst Kuwaiti banks in terms of geographical spread through International Banking and the ability to conduct business in both Conventional and Islamic Banking.
Moreover, he emphasized that NBK’s diversified business segments serve as key pillars of strength, offering a competitive edge and reinforcing the Group’s earnings resilience. Consumer Banking accounted for 21% of net operating income and 17% of profit, while Corporate Banking contributed 13% and 19%, respectively. Meanwhile, International Banking delivered 24% of net operating income and 23% of profit, reflecting a solid operating performance.
He further added that the Group’s Islamic banking subsidiary Boubyan Bank delivered a net profit of KD96.8m, up 20.3% on 2023, contributing 44% and 23% respectively to Group’s total assets enforcing the diversification agenda of the Group. In the meantime, NBK Wealth contributed 9% and 11% of the Group operating income and profit respectively.
When asked about his forecasts for 2025, Ronghe stated: “Given the ongoing regional and global geopolitical landscape, we remain cautiously optimistic that while challenges persist, the overall operating environment will remain broadly stable in 2025.”
