Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al-Marzouq said that KFH has, by the grace of Allah, reported net profit of KD 102.2 Million for the first half of 2021 for KFH shareholders; an increase of 79.5% compared to the same period last year.

Earnings per share for the first half of 2021 reached 12.21 fils; an increase of 79.3% compared to the same period last year.

Net financing income for the first half of the year reached KD 291.8 Million; a decrease of 1.3% compared to the same period last year.

Total operating expenses for the first half of the year stabilized to reach 152.1 Million at the same level for the comparative period.

Net operating income reached KD 248.0 Million; a decrease of 7.3% compared to the same period last year, affected by the decrease in investment income compared to the same period last year.

Financing receivables as of the end of the first half of 2021 reached KD 11.1 Billion, i.e. an increase of KD 338.8 million or 3.2% compared to end of year 2020.

Investment in Sukuk as of the end of the first half of 2021 reached KD 2.7 Billion; an increase of 0.2% compared to end of year 2020.

Total assets as of the end of the first half of 2021 reached KD 21.5 Billion i.e., increase of KD 44.5 million or 0.2% compared to end of year 2020.

Depositors’ accounts reached KD 15.8 Billion i.e., increase of KD 459 million or 3.0% compared to end of year 2020.

Shareholders’ equity as of the end of the first half of 2021 reached KD 1.9 Billion i.e., decrease of KD 65 million or 3.3% compared to end of year 2020.

In addition, the capital adequacy ratio reached 18.58% which is above the minimum limit required by regulators.  This ratio confirms the solid financial position of KFH.

Positive financial indicators

Al-Marzouq explained that the H1 positive results, including the growth of profitability and financing receivables reflect the financial strength and creditworthiness of KFH. The figures also confirm the efficiency of KFH`s operational performance and its business model as well as the tangible improvements achieved by the bank in digital transformation and various strategic initiatives.

He said that KFH`s liquidity ratios remained higher than the regulatory requirements, whilst non-performing financings (NPFs) decreased with higher coverage ratios, adding that the asset quality and capital efficiency improved. These improvements confirm the strength of KFH’s capital base, its great experience in risk management and its high ability to deal with exceptional circumstances and market fluctuations.

Historical Issuance

Al-Marzouq noted the successful issuance of $ 750 million AT1 Mudaraba Sukuk by KFH, saying that the historic Sukuk- the largest issuance in Kuwait in terms of size- received subscription orders exceeding $ 2 billion, close to 3 times the targeted issue size.

He explained that Mudaraba Sukuk aims to support KFH`s Tier 1 capital, diversify its financing resources, increase its financial and investment capabilities, support the infrastructure projects and the local productive economic sectors as well as help customers with their expansion plans regionally and globally. 

Sustainable development

Al-Marzouq said that as part of its sustainable development strategy, KFH has successfully contributing to different strategic societal initiatives which reflected positively on society and the national economy, such as the KD 20 Mn initiative to pay the debts of defaulting debtors, in addition to its excellence in various aspects of social responsibility.

He added that KFH has launched a project to develop the sustainability strategy to integrate with business strategy of KFH, paying attention to the efficiency of risk management, developing human resources, enhancing the transparency and credit rating through the 7th sustainability report according to the latest global principles and criteria.

Al-Marzouq stressed the role of KFH in sustainability through “Green Sukuk” that aims to raise funding for different sustainability projects.

Development plans

Al-Marzouq said that KFH plays its role as a main pillar in supporting the national economy and the development plans in Kuwait and the region by participating in project financing and providing a wide range of banking and financing solutions, including trade finance, contracts, SMEs, and business banking, in addition to large companies and development projects.  He noted the coordination and harmony in the performance of the Group's subsidiaries in Turkey, Bahrain, Germany, Malaysia and Saudi Arabia.

Al-Marzouq said that KFH has a diversified financing portfolio that covers various vital sectors, including energy, water, electricity, infrastructure and construction. He stressed KFH`s capability to continue financing government development projects as part of Kuwait Vision 2035.

Excellence and leadership

Meanwhile, Acting Group CEO at (KFH), Abdulwahab Essa Al-Roshood said that H1 financial results were positive and in line with the set plans and the bank’s strategy, indicating the growth in profits is attributed to the decline in the level of provisions as a result of the decrease in the cost of risks and non-performing financings (NPFs), in addition to the improvement of the operating environment as a whole.

Al-Roshood added that KFH's achievements have been recognized worldwide with KFH ranking first locally in the S&P list of top 20 MEA banks, and in the "MEED" list of the 100 largest listed companies in the Middle East and Africa in terms of market value.

He pointed out that KFH won prestigious awards from international magazines and institutions such as the "World's Best Islamic Bank 2021" Award and “Best Treasury and Cash Management Bank in Kuwait” Award 2021 from Global Finance Magazine. Along with other illustrious awards won by KFH based on specific professional standards,  the bank won "Best Islamic Bank in Middle East" and "Best Islamic Bank in Kuwait" 2021 Awards from the prestigious "The Banker Magazine", and “Best Islamic Bank in the Middle East” Award and "Best Bank in Kuwait" Awards from EMEA Finance Magazine.  

Digitization and innovation

Al-Roshood explained that KFH achieved qualitative leaps in innovation and digital transformation strategy which met customer`s aspirations and provided added value to their experience and industry.

He noted that the digitization of banking operations contributes to raising the efficiency of performance, enhancing financial inclusion, increasing productivity and reducing costs, and thus enhancing profitability. Al-Marzouq highlighted the move forward in investing in emerging technologies and FinTech companies, to maintain the lead on competitors and achieve customer`s aspirations, especially the youth, in such a rapidly changing and evolving environment.

Youth support and strategic initiatives

Al-Roshood stressed the role of KFH in supporting Kuwaiti youth as they are a driving force for the local economy and a main pillar for moving ahead in the development journey by relying on highly qualified creative youth.

He pointed out KFH`s support of various initiatives that serve society, including the “Kafa’a” initiative to develop specialized national capabilities in  banking and financial sector, as well as the banking awrenaess “Diraya” initiative. These two initiatives were launched by the Central Bank of Kuwait(CBK) in cooperation with the Kuwait Banking Association (KBA) and Institute of Banking Studies (IBS).

Al-Roshood concluded: “As we affirm the continuation of the ideal approach to the bank’s vision and strategy in promoting digital innovation in distinguished products, services and campaigns, and leading the global development of the Islamic finance industry, we cherish the trust and support of the Board of Directors, shareholders and customers, and we value the role of the regulatorty authorities. Whilst commending the efforts of the employees and all partners and stakeholders, we affirm our endeavor to continue enhancing  customer experience and maintaining leadership in the Islamic financial services industry.”