Kuwait City, July 23: Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al Marzouq announced that KFH achieved a net profit of KD 341.2 million for the first half of 2024 for the Bank shareholders, representing an increase of 2.3% compared to the same period last year. The comparative period included non-recurring revenues and profits from investments amounted to nearly KD 70.0 million.

Earnings per share for the first half of 2024 reached 20.73 fils; an increase of 2.6% compared to the same period last year.

Net financing income for the first half of the year reached KD 558.8 million; an increase of 21.9% compared to the same period last year.

Total operating income for the first half of the year increased, supported by the increase in all core activities to reach KD 823.4 million; an increase of 12.1% compared to the same period last year.

Financing receivables for the first half of 2024 reached KD 19.0 billion, affected by the sale of Kuwait Finance House - Bahrain, as well as the impact of foreign currency fluctuations during the current period.

Total assets as at the end of the first half of the year amounted to KD 36.4 billion, Shareholders’ equity amounted to about KD 5.3 billion as at the end of the first half of 2024.

Depositors’ accounts as at the end of the first half of 2024 amounted to KD 19.5 billion.

In addition, the capital adequacy ratio reached 17.15% which is above the limit required by regulators. This ratio confirms the solid capital base of KFH.

The Board of Directors has agreed to distribute a semi-annual cash dividend of 10% to KFH shareholders.

Exceptional financial performance

Al Marzouq said that the profits reflect KFH's effective strategy, resulting in exceptional financial performance, noting that KFH has implemented various qualitative initiatives and accomplishments, strengthening KFH's leadership both locally and globally, while reinforcing its reputation as a benchmark in the banking sector.

He stated that the financial statements demonstrated a solid capital base, high liquidity ratios and robust operating performance which drove growth in all key financial indicators.

Largest market cap

Al Marzouq added that KFH succeeded in attaining the key goals of its strategy, overcoming the challenges of the operational environment. He noted that KFH maintained its long-term credit rating at (A) by Fitch with stable outlook and at A2 by Moody’s with stable outlook.

He pointed out that KFH ranked first among the largest listed companies and banks on Boursa Kuwait in terms of a market capitalization which currently exceeded KD 12 billion. Additionally, KFH claimed third place among the top 20 Middle East and Africa Banks by market cap according to the latest S&P Global Intelligence analysis.

Strategic plans

Al Marzouq explained that KFH currently operates in 12 countries around the world, notably Kuwait, Bahrain, Türkiye, Egypt, UK and Germany through a large international network of 618 branches. He noted that KFH holds the distinction of being the first Islamic bank in Germany and the first licensed under Malaysia's Banking Act.  Furthermore, KFH is the second largest Islamic financier in Türkiye. Today, KFH demonstrates a stronger local, regional and global footprint.

He went on to say that KFH implemented strategic steps to strengthen its expansion and solvency, develop its operations, and keep pace with technology and digital banking updates. He mentioned that the most significant initiatives include KFH's acquisition of Ahli United Bank Group -Bahrain, its conversion to a Sharia-compliant bank along with its subsidiaries, and the completion of the merger with Ahli United Bank-Kuwait (AUBK). Additionally, KFH Group completed the agreement with Al Salam Bank to acquire, in return for cash consolidation, the entire share of KFH Group in KFH – Bahrain. Furthermore, the launch of TAM Digital Bank marks another key milestone as the first Sharia-compliant digital bank in Kuwait.

Financing development projects

Al Marzouq said that KFH is the first strategic partner for major development plans. KFH is also one of the most preferred and trusted institutions in the Kuwaiti banking sector for corporate finance thanks to its innovative, flexible and efficient Sharia-compliant financing solutions. The Bank also offers comprehensive financing solutions across various project sectors, with a particular focus on petrochemicals, oil and gas, water and energy, renewable energy, and infrastructure as well as SMEs.

Strategic social initiatives

Al Marzouq highlighted KFH's prominent role in strategic social initiatives with significant added value. These initiatives include contributing KD 8 million to the reconstruction of Al Mubarakiya. KFH further demonstrated its commitment by participating in the national campaign to help defaulting debtors.  The contribution consisted of additional funds amounting to KD 7 million, bringing the total amount aimed to debtors to nearly KD 38 million since 2019. Additionally, KFH partnered with the Kuwait Food Bank, pledging KD 1 million to support underprivileged families in Kuwait, in addition to the many strategic social initiatives.

Strong financial position

KFH's Acting Group Chief Executive Officer, Abdulwahab Iesa Al Rushood, highlighted KFH's strong H1 2024 profits as a confirmation of the bank's continued leadership in the Kuwaiti banking sector. He further emphasized that all financial indicators for the first half point to the success of KFH's strategy. This strategy prioritizes achieving sustainable profits, solidifying the bank's financial position, maintaining high asset quality, achieving a favorable cost-to-income ratio, maintaining a healthy coverage ratio for non-performing debts, growing operating income, and strengthening both liquidity and capital adequacy ratios.

Digital financial solutions

Al Rushood stated that KFH is committed to providing top-notch digital financial services and solutions in addition to investing in technological infrastructure and expanding its capabilities in areas such as Artificial Intelligence, cloud computing, Data Engineering, FinTech, Digital Product Design, and cybersecurity controls. Additionally, KFH has successfully transitioned numerous processes and functions from manual systems to automated systems through the use of Robotic Process Automation (RPA). This has led to improved production efficiency, reduced service times for customers and increased their satisfaction levels.

FTSE Index

Al Rushood emphasized KFH’s exceptional dedication towards investing in green finance products and integrating Sustainable Development Goals (SDGs) and ESG principles across all its operations. He expressed his pleasure in KFH's recent inclusion in the FTSE4Good Index Series. Created by the global index and data provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. Al Rushood indicated that FTSE4Good index includes prestigious companies such as Google and Microsoft.

He highlighted KFH's release of the carbon footprint report and sustainability report, the first-of-its-kind in the Kuwaiti banking sector, as well as the ongoing (Keep it Green) campaign, which encompasses numerous sustainability initiatives.

He also added that KFH signed the Global Takaful Alliance agreement with the United Nations Development Programme (UNDP). This alliance aims to provide Takaful insurance to 100 million farmers worldwide. Al Rushood noted that KFH’s efforts and outstanding performance in the filed have earned the bank several awards, including Kuwait's Best Bank for Sustainable Finance by Global Finance magazine and Kuwait's Best Bank for ESG by Euromoney.

Investing in human capital

Al Rushood pointed out that KFH remains committed to investing in its human capital and supporting employees in honing their skills and enriching their experiences. He highlighted the launch of Business Leadership Excellence program in partnership with IE Business School, Forssah program, in addition to many programs with Harvard University and other esteemed international universities. These programs focus on empowering KFH's talents and leaders to qualify them as well-rounded professionals and sustain KFH’s successful journey.

Global recognition

Al Rushood underlined the many local and global awards KFH has scooped. The awards confirm its reputation, diverse capabilities in the Islamic finance sector, brand excellence, and robust operating performance. These include winning Kuwait's Best Bank, Best Digital Bank in Kuwait for Tam Digital Bank and Kuwait's Best Bank for ESG awards by Euromoney, in addition to Kuwait's Best Bank for Sustainable Finance by Global Finance magazine. KFH also received the His Highness Sheikh Salem Al-Ali Al-Sabah Informatics Award under the patronage and presence of His Highness the Amir Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah for the category of excellence in digital transformation in technical financial solutions, in addition to winning several awards in different areas.

Appreciation

Al Rushood thanked shareholders, customers, and the Board of Directors for their trust and support. He acknowledged the role of the Central Bank of Kuwait and regulatory authorities, and praised the efforts of the Executive Management, employees, partners, and all stakeholders. Al Rushood emphasized KFH's commitment in exerting the efforts to strengthen and maintain its position as a leading Islamic bank globally.