Kuwait Finance House (KFH) CEO Mohammed Al-Omar stated in an interview with Najwa Asran on CNBC Arabia Channel, that the continuous increase in profit over five consecutive quarters, underlines the success of the restructuring process and the management’s wise decision to focus on main operations to achieve sustainable profit, offer better returns to shareholders and depositors, and easing burden off the institution. This allows the bank to handle global and regional economic developments positively.
Al-Omar said that the exits performed by KFH in the real estate field are not new, since the acquisition and selling of real estate is KFH’s core business. He explained that that what is occurring is a rearrangement of the real estate portfolio, and benefitting from current developments in the real estate market, in terms of rates and shifting to certain kinds of real estate and land. He mentioned that such an approach seeks to achieve best profit rates and uses resulting liquidity in KFH operations, or in acquiring and developing real estate. He added that the real estate business remains KFH’s core business, and revealed that KFH portfolio has profitable real estate. He also asserted that KFH will continue to shoulder its responsibility, based on the readings of the market and its developments.
Moreover, Al-Omar stressed that profit and growth indices in the third quarter budget were strong, and forecast the high potential of achieving good profit by the end of the year. He noted that total profits up until the third quarter of this year reached KD 225.3 million. KD 89.1 million of these profits were net profits for shareholders with a KD 13.3 million (17%) increase over the same period last year. Profits of investment depositors reached KD 134.1 million, while profit per share increased by 2.65 fils (12%) to reach 25.54 fils.
Al-Omar revealed that revenues increased by KD 100 million, where total revenues reached KD 711.6 million with a 16%. Volume of assets increased to KD 15.5 billion with a KD 1.4 billion (10%) increase. Deposits climbed to reach KD 9.9 billion with a KD 940 million increase (11%), while shareholders’ equity reached KD 1.7 billion with a KD 403 million (31%) increase. Capital adequacy ratio increased to 16.52% compared to 13.5% for the same period last year.
Regarding bad loans, Al-Omar explained that there is complete professionalism and transparency in dealing with this subject. He stressed that the bank is keen to solve this issue in parallel with business development at KFH.
Furthermore, Al-Omar noted that the strategy that KFH adopted regarding its overseas banks, has played a role in cementing their roles and making them more profitable, despite fierce competition, through the optimum usage of resources, and taking full advantage of available opportunities their markets. He added that overseas revenues increased to reach 49% of total revenues, compared to 42% for the same period last year. There is a growth in overseas banks’ revenues by 18%, and an increase in assets by the same rate, in addition to an increase in deposits by 25%; thus reflecting the trust in KFH Group on the one hand, and the significant development in quality of service and client service on the other.
Al-Omar mentioned that the Turkish and Malaysian markets are an example of robust markets that grow well and have great potential for Islamic banking. He explained that KFH enjoys many privileges in those markets, since it began operating in them a long time ago. He revealed that KFH-Turkey is one of the oldest Islamic banks in Turkey, not to mention that KFH-Malaysia is the first non-Malaysian bank to be fully owned. Such accomplishments allowed KFH to operate in over 355 branches worldwide.
He concluded by applauding the positive and supportive role shouldered by His Highness the Amir Sheikh Sabah Al-Ahmad Al-Sabah, who is keen to boost economic development, and constantly calls for cooperation between the government and the National Assembly, in order to boost the economy and improve the lives of citizens.