National Bank of Kuwait Financial Results – 30 September 2019

NBK announced the results of its operations for the first nine months of 2019, which indicated that the bank’s net profits (after tax deductions) scored KD 320 million, an increase by KD 30.4 million or by 10.5%, versus KD 289.6 million in the same period of 2018. This was achieved due to the decrease in total provisions by KD 40.8 million or by 28%, despite the rise in net operating income by a lower than the rise in total operating expenses. Therefore, the bank’s operating profit decreased by KD 8.7 million or by 1.9%, reaching KD 451 million versus KD 459.7 million in the same period of 2018. The bank achieved net profit attributed to its shareholders in the amount of KD 302.2 million compared with KD 272.4 million, indicating an increase by KD 29.8 million or by 10.9% compared to the same period of 2018.

Net operating income increased by KD 11 million or by 1.7% and scored KD 672.8 million versus KD 661.8 million in the same period last year. This resulted from rise in net interest income and net income from Islamic financing to a total of KD 517 million versus KD 515 million, i.e. a rise by KD 2 million or by 0.4%. In details, the bank’s net interest income (Islamic financing income excluded) rose by KD 83.1 million and interests expense (Murabaha Finance cost excluded) also rose by KD 79.2 million and thus, the net interest income rose by KD 3.9 million. The bank achieved net income from Islamic Financing by KD 91.1 million versus KD 93.1 million in the same period last year. Also, item of net fees and commissions rose by KD 2.4 million and reached KD 116.8 versus KD 114.4 million. Also, item of net investment income increased by KD 5.5 million scoring KD 6.9 million compared with KD 1.4 million.

On the other hand, total operating expenses increased by a higher value than the increase in the net operating income by KD 19.7 million or by 9.8%, scoring KD 221.8 million compared with KD 202.1 million at the end of September 2018. This was achieved due to the rise in all item of the operating expenses. According to AlShall estimates, assuming the exclusion of the impact of consolidating Boubyan Bank’s results on the operating expenses, it increased from KD 160.6 million to KD 177.6 million, i.e. an increase by 10.6%. Total provisions was at KD 104.6 million, decreasing by KD 40.8 million or by 28% as mentioned previously, from KD 145.4 million.

Financial figures of the bank indicate total assets increased by KD 1.481 billion or by 5.4%, reaching KD 28.909 billion compared with KD 27.428 million at the end of 2018. Also, total assets rose by KD 1.784 million or by 6.6% if compared with the total in the end of September 2018. If we exclude the impact of consolidating Boubyan Bank, the growth rate would become 4.4%. Portfolio of loans, advances including Islamic financing for customers, the largest component of the bank’s assets, increased by 5.5% or by KD 855.9 million, raising the total portfolio value to KD 16.359 billion (56.6% of total assets) versus KD 15.503 billion (56.5% of total assets) by the end of 2018. It increased by KD 952.2 million or by 6.2%, if compared with the same period of 2018 when the portfolio totaled to KD 15.407 million (56.8% of total assets). If we exclude the impact of aggregating Boubyan Bank in its Islamic finance, growth rate would be 4.2%. 

Figures indicate that the bank liabilities (excluding total equities) increased by KD 1.266 billion or by 5.3%, and scored KD 24.993 billion compared with the end of 2018. Total liabilities increased by KD 1.507 billion or by 6.4%, if compared with the total in the same period of last year. Excluding the impact of aggregating Boubyan Bank, growth rate will score nearly 4.6%. Percentage of total liabilities to total assets scored 86.5% versus 86.6% in the same period of last year.

Results of analyzing financial statements calculated on annual basis indicate that all bank’s profitability indexes increased compared with the same period of 2018. The return on average assets (ROA) increased to 1.51% versus 1.45%. The return on average equities relevant to the bank shareholders (ROE) increased to 12.4% versus 11.8%. The return on average capital (ROC) increased to 67% versus 63.7%. Earnings per share (EPS) increased to 46 Fils compared with 41 Fils for the same period in 2018. (P/E) scored 15.4 times versus 15.2 times, as a result of the increase in the EPS by a lower percentage than the increase in the market stock price. (P/B) scored 1.6 times versus 1.4 times.