Kuwait City, July 16: National Bank of Kuwait (NBK) has announced its financial results for the six-month period ended 30 June 2024. The Bank reported a net profit of KD 292.4 million (USD 953.6 million), compared to KD 275.3 million (USD 897.9 million) for the corresponding period in 2023, improving by 6.2% year-on-year.

Total assets as of the end of June 2024 grew by 4.4% year-on-year to reach KD 37.7 billion (USD 122.9 billion), whereas total loans and advances increased by 5.4% year-on-year to reach KD 22.7 billion (USD 74.1 billion), while shareholders’ equity reached KD 3.8 billion (USD 12.5 billion), growing by 6.5% year-on-year.

Based on these results, the Board of Directors has resolved to distribute semi-annual cash dividends of 10 fils per share for the period ended 30 June 2024, representing 10% of the nominal value of the shares.

Impressive Financial Performance

Commenting on NBK’s 1H2024 financial results, Mr. Hamad Al-Bahar, NBK Group Chairman, said: “In the first half of 2024, NBK maintained its growth momentum with strong financial results, highlighting the resilience of its diversified and resilient business model amidst evolving operational landscapes.”

“Despite regional and international geopolitical tensions impacting the global economy, the Bank has continued to leverage strategic diversification in its products and services across diverse regions. This success was supported by a strong balance sheet, solid capital base, high asset quality, ample liquidity, targeted investments, and prudent risk management,” Al-Bahar added.

He also indicated that in the first half of this year, NBK continued to strengthen its operations across its markets, adopting the highest standards of sustainability and adhering to the best ESG practices. This commitment underscores the Bank's dedication to seizing optimal and sustainable opportunities while serving as a key partner for its customers in their efforts to secure sustainable financing.

Social Responsibility

On the social responsibility front, Al-Bahar stated that, as part of NBK's commitment to supporting the sustainable development of Kuwait’s economy and leveraging its position as the leading contributor to social responsibility in Kuwait, the Bank signed an agreement in 2Q2024 to develop Sharq area. This collaboration with Kuwait Municipality and Al-Shaab National Real Estate Company involves the establishment of a new public park and parking facilities, with an estimated investment of KD 8 million. The execution of this initiative is projected to take approximately two and a half years.

Sustainable Growth

Meanwhile, Mr. Isam J. Al-Sager, NBK Group Vice Chairman and CEO, said: “NBK’s robust financial results for the first half of 2024 highlight the successful implementation of our strategy for sustainable growth. This achievement reflects our commitment to delivering long-term value to our shareholders, customers, the communities we serve, and all stakeholders”.

Al-Sager explained that NBK’s ability to sustain profit growth across various economic cycles clearly reflects its resilient business model and prudent approach to risk management. He noted that the group's net operating income increased by 8.2% year-on-year in 1H2024, reaching KD 612.4 million (USD 2.0 billion).

“Through its strategic investments in technology and innovation, as well as its commitment to investing in its employees as its most valuable asset, NBK has succeeded in delivering a banking experience that meets the evolving needs of its customers with a range of carefully designed digital services and products. The Bank remains dedicated to investing in these areas, recognizing innovation as a key driver of future growth,” Al-Sager added.

Al-Sager highlighted that NBK Group continued to strengthen its leading banking brand across all business sectors, emphasizing strong performance in key areas in 1H2024. This includes notable growth in international operations which continues to support the Bank’s diversification strategy and contributing positively to both the Group’s operating income and net profits.

He explained that the strong contribution attributed to the international operations to the Bank’s profits, reflects the soundness of the Group’s vision and the proved success of its diversification strides. He also stressed that the Group will continue with its endeavor in strengthening its global banking operations, with an eye on key growth markets.

In parallel with the Bank’s vision to increase international operations’ contribution to profits, expanding its global banking services, its commitment to providing exceptional mortgage solutions and tailored service that meet the investment needs of its clients in international real estate; NBK opened during the second quarter of this year the first international mortgage loan center of its kind in Kuwait at the Bank's headquarters; dedicated to serving clients intending to buy or finance real estate in the United Kingdom, France and the UAE.

“The Group is also witnessing a significant expansion in the area of wealth management, particularly following the recent launch of “NBK Wealth", positioning it as the largest local wealth management firm and a major player in the region,” Al-Sager added.

Economic reform

Al-Sager expressed confidence in the government's ability to tackle significant economic challenges and execute a pragmatic reform agenda, uplifted by the backing of His Highness the Amir, Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah.

He emphasized that upon the implementation of these reforms and the initiation of significant development projects, alongside increased investment expenditure and alignment with policies that attract investments and bolster the role of the private sector in project operation and management, it will revitalize the local business environment. He highlighted NBK's commitment to solidifying its role as the primary partner of the government sector in funding major strategic initiatives.

On the prospects of domestic credit growth for the year 2024, Al-Sager said: “We are optimistic that credit growth will further improve for the remainder of the year for both business sector and household credit, compared to a decline in growth levels last year.” He attributed this to the positive momentum of project awards during 2Q2024, and anticipates an acceleration in its pace throughout the remainder of the year. Additionally, he cited expectations of lower interest rates in the second half of the year and an influx of Kuwaitis entering the labor market as contributing factors.

Driving Sustainable Leadership

In 1H2024, NBK maintained its leadership in sustainability by successfully issuing its first green bonds totaling USD 500 million. This issuance, oversubscribed by more than 3 times (USD 1.5 billion), marks the first green bond from a Kuwaiti financial institution and the first by a bank in the region this year. It stands as one of the largest green issuances by a conventional financial institution in the region.

In another milestone in sustainability, Al-Sager announced that NBK has joined the Partnership for Carbon Accounting Financials (PCAF) initiative. This move positions NBK as the first bank in Kuwait and one of only six banks in the MENA region to join leading global financial institutions in measuring and disclosing greenhouse gas (GHG) emissions related to its lending and investment activities. He emphasized that this significant step strengthens the Bank's commitment to achieving carbon neutrality by 2060.

He further elaborated that in 1H2024, NBK has entered a strategic partnership with DHL to use the “DHL GoGreen Plus” service. Through its participation in GoGreen Plus, NBK ensures that all its international shipments are transported using Sustainable Aviation Fuel (SAF) rather than traditional jet fuel. This transition leads to a substantial reduction in carbon emissions that are linked to transportation.

Prestigious Awards

Al-Sager highlighted that during the first half of 2024, NBK reinforced its leadership in Kuwait and the region by earning prestigious awards, further enhancing its global recognition.

He explained that NBK has received several prestigious awards from MEED international magazine as part of its MENA Banking Excellence Awards for 2024. The accolades include Best Retail Bank in Kuwait (NBK), Best Innovation Program in MENA, and Excellence in Sustainable Investment in MENA. Additionally, Weyay was recognized as the Best Digital Bank in Kuwait, and NBK Wealth was honored as the MENA Fund Manager of the Year.

Key financial indicators for 1H2024

• Net operating income of KD 612.4 million (USD 2.0 billion), up 8.2% year-on-year

• Total assets increased by 4.4% year-on-year, at KD 37.7 billion (USD 122.9 billion)

• Total loans and advances grew by 5.4% year-on-year to KD 22.7 billion (USD 74.1 billion)

• Customer deposits increased by 7.6% year-on-year to KD 21.8 billion (USD 71.1 billion)

• Shareholders’ equity amounted to KD 3.8 billion (USD 12.5 billion), registering an annual growth of 6.5%.

• Strong asset quality metrics, with NPL/gross loans ratio at 1.52% and an NPL coverage ratio of 248%.

• Robust Capital Adequacy Ratio of 16.8%, comfortably in excess of regulatory requirements.