Kuwait International Bank (KIB) Financial Results– First Half 2019

Kuwait International Bank (KIB) announced results of its operations for the first half of the current year, which indicate that the bank achieved net profits (after tax deductions) at KD 9.74 million, decreasing by KD 2.28 million or by 19% compared with KD 12.02 million for the same period in 2018. This decrease in net profits is due to the rise in total operating income by a lower value than the rise in total operating expenses. Therefore, the bank’s operating profit declined by KD 1.08 million or by 6.1%, reaching KD 16.74 million versus KD 17.82 million.

In details, the bank’s total operating income rose by KD 522 thousand or by 1.5%, and scored KD 35.06 million compared with KD 34.54 million for the same period in 2018. This resulted from the rise in the item of investment income by KD 1.01 million, reaching KD 2.53 million versus KD 1.52 million. Whereas item of net financing income decreased by KD 767 thousand or by 2.8%, scoring KD 26.37 million compared with KD 27.14 million.

On the other hand, total operating expenses rose by a greater value than the rise in the total operating income. In which, total operating expense increased by KD 1.60 million or by 9.6%, and scored KD 18.32 million compared with KD 16.72 million in the same period of 2018, due to the rise in all items of the operating expenses. Total provisions and impairment losses increased by KD 1.32 million or by 25.2%, reaching KD 6.56 million compared with KD 5.24 million. This justifies the drop in the net profit margin, that reached 27.8% compared with 34.8% in the same period of last year.   

The bank’s financial statements indicate that the bank’s total assets increased by KD 179 million or by 8.3%, and scored KD 2.348 billion compared with KD 2.169 billion in the end of 2018. It also increased by KD 266.4 million or by 12.8% if compared with the same period of 2018 when it scored KD 2.081 billion. Item of financing receivables rose by KD 115.1 million or by 7.2%, and scored KD 1.721 billion (73.3% of total assets) versus KD 1.606 billion (74% of total assets) in the end of 2018. It rose by 13.1% or by KD 199.8 million compared with KD 1.521 billion (73.1% of total assets) in the same period of 2018. Percentage of financing receivables to total deposits scored 89.2% compared with 86.2%. Moreover, item of due from banks increased by KD 79.5 million or by 25.2%, and scored KD 395.1 million (16.8% of total assets) versus KD 315.7 million (14.6% of total assets) in the end of 2018, and rising by 12.9% or by KD 45.1 million when compared with the same period in 2018, when it was at KD 350.1 million (16.8% of total assets).   

Figures indicate that the bank’s liabilities (excluding total equity) increased by KD 87.5 million or by 4.6%, and scored KD 1.980 billion versus KD 1.892 billion in the end of 2018. It rose by KD 165.7 million or by 9.1%, when compared with the total in the first half of last year when total liabilities scored KD 1.814 billion. Percentage of total liabilities to total assets scored 84.3% compared with 87.2%. 

Results of analyzing the bank’s financial statements calculated on annual basis indicate that all of the bank’s profitability indexes declined compared with the same period of 2018. Average return on equities relevant to bank shareholders (ROE) decreased to 7% compared with 9.1%. Likewise, the average return on capital (ROC) decreased to 18.4% compared with 23.2%. Average return on assets (ROA) also decreased to 0.9% compared with 1.2%. Earnings per share (EPS) decreased to 9.89 Fils versus 12.32 Fils. (P/E) scored 13.9 times versus 9.1 times, as a result of the increased market price share by 21.8% versus a decline in the EPS below its level in the end of June 2018 by 19.7%. (P/B) scored about 0.8 time compared with 0.9 times in the same period last year.