Al-Rushood: Approximate levels of KFH profits before Covid19

Kuwait Finance House (KFH) group acting CEO Abdulwahab Essa Al-Rushood said the group’s performance increased significantly in 2021. Profits were approaching 2019 levels before the spread of the Covid19 pandemic. Net profit in 2021 increased by 64% to KD 243 million compared to 2020.

Al-Rushood said the subsidiaries’ contributions to total operating profit amounted to around 49.7%, mainly from KFH-Turkey which performed remarkably well despite fluctuations in the Turkish lira. He pointed out that KFH-Turkey’s financial portfolio is well balanced between Turkish Lira and major foreign currencies.

He indicated that KFH has a strong capital base and tops Kuwaiti banks with an MC of KD 7.6 billion.

He added that KFH benefits from high quality assets. The Group’s NPF decreased to 1.6% at the end of 2021 according to the CBK accounting basis, which is a favorable ratio given the economic conditions resulting from the Covid19 pandemic. Provisions for debt coverage amounted to approximately 319% for KFH Kuwait and 326% for the Group at the end of 2021. Provisions charged to the Group’s income statement decreased by 52%, reaching KD 135 million, including including provisions for financing, investment and other additional precautionary provisions.

Regarding the divestment, Al-Rushood said that KFH continues to focus on core banking activities and exit non-strategic assets and investments that consume capital and are not compatible with the sustainability policy in the company. profit making. He pointed out that due to the conditions of the Covid19 pandemic and its negative impacts on the local and global economy, the outflows at the end of 2021 amounted to around 49.7 million KD. He expects more releases to occur in the current year as health and economic conditions improve.

Regarding the financing trend and trend, Al-Rushood said, “Despite the enormous pressures in the retail market which is a very significant and important sector, KFH has continued to focus on the retail financing market and company and on government projects while the group’s financial portfolio increased by 5.7% to reach KD 11.4 billion”.

Al-Rushood appreciated the step taken by the CBK to open the door to licensing digital banks and formulating a digital banking framework. He asserted that this process will increase inter-bank competition and enhance innovation to provide quality digital banking services to customers in the banking sector and the Kuwaiti market in general.

Al-Rushood reported that KFH has a highly developed technological infrastructure which has enabled it to take proactive and leading steps in adopting digitalization. He added that this fact was clear during the Covid19 crisis, as KFH continued to provide its digital banking services to customers despite full and partial shutdowns.

He noted that KFH customers made, via (KFHonline), almost 160 million digital banking transactions in 2021, a growth of 25% compared to last year. He said that this huge interest in KFH’s online services confirms the efficiency of the services and the fulfillment of customers’ needs and aspirations. It also confirms KFH’s pioneering position in providing banking solutions through mobile and alternative channels.

Regarding KFH’s position in the sukuk market, Al-Rushood pointed out that KFH is a pioneer in the sukuk market as a major trader and market maker regionally and globally. KFH completed more than US$16 billion in sukuk market transactions in 2021. He pointed out that these transactions improve liquidity and support Islamic financial markets, in line with the nature of KFH’s role in activating the sukuk market and the global Islamic finance industry.

He added that KFH has succeeded in becoming the number one major dealer for 2021 in the ranking of the primary market as well as the secondary market regarding the IILM Sukuk program. This is the first time that an institution has won first place in both lists in IILM’s Sukuk program, beating all banks on both lists.

In a question on sustainability aspects of finance and financial inclusiveness, Al-Rushood said that sustainability includes several elements, for example, social, environment, human resources, women empowerment, governance and other elements. He added that KFH applies these items in accordance with global standards. The sustainability trend is not new to KFH as it has several contributions related to social, environmental, responsible investment and other aspects long before sustainability standards gained interest and current attention of organizations and countries.

To achieve sustainability in financial inclusion, Al-Rushood pointed out that KFH achieves this through several aspects, namely: KFH Group has provided banking services to approximately 7.5 million customers in the GCC, Asia and in Europe, KFH published periodic reports highlighting earnings growth and high liquidity ratios. and the strong capital base that supports business growth and complies with regulatory requirements, KFH has increased its investments in green Sukuk in the total financing portfolio, namely projects related to carbon mitigation and risks related to climate change. He said KFH has issued Green Sukuk worth US$350 million to KFH-Turkey with issuance coverage reaching 12 times, proving the global interest in this type of investment.

KFH offers financial and technical advantages to projects that take into account environmental dimensions and carbon emissions mitigation. KFH has made it possible for people with special needs to benefit from banking services and products by assigning them a special branch in each governorate, highly qualified sign language employees, special parking, wheelchairs and other necessary means. KFH facilitated banking services to customers around the clock, anywhere through digital solutions as part of its efforts to improve financial inclusion and achieve sustainability.

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