Al Ahli Bank of Kuwait (ABK) Financial Results 2019

Al Ahli Bank of Kuwait announced results of its operations for the year ending December 31st 2019, which showed that the bank’s net profits (after tax deductions) scored KD 28.8 million, declining by KD 13.4 million or by 31.7% compared with KD 42.2 million in 2018. This drop in the net profit was due to the rise in total provisions by a higher value than the rise in total operating profit, in which provisions rose by KD 15.4 million or by 27.5% while the operating profit rose by KD 1.8 million. The following graph displays the development in profits level relevant to the bank’s shareholders during 2008-2019:

In details, total operating income rose to KD 172.5 million compared with KD 168.8 million, a rise by KD 3.7 million or by 2.2%. This resulted from item of net interest income by KD 5.8 million, reaching KD 127.6 million compared with KD 121.8 million for 2018. While the item of net gain on investment securities dropped by KD 1.8 million, and scored KD 2.1 million compared with KD 3.9 million.

Total operating expenses increased by a lesser value than the increase in operating income, by KD 1.9 million or by 2.9% reaching KD 67 million compared with KD 65.1 million in 2018. This resulted from the rise in all items of operating expenses except item of other operating expenses that decreased by KD 2.3 million. Total provisions increased by KD 15.4 million or by 27.5% as mentioned previously, reaching KD 71.6 million compared with KD 56.2 million. Therefore, the net profit margin dropped to 16.7% compared with 25% for 2018. 

The bank assets scored KD 4.883 billion, a 7.4% increase or by KD 334.7 million compared with KD 4.548 billion in the end of 2018. Item of cash and balances with banks rose by KD 180.9 million or by 25.8%, reaching KD 883.1 million (18.1% of total assets) versus KD 702.2 million (15.4% of total assets) in the end of 2018. Also, item of loans and advances increased by KD 189.7 million or by 6.3%, and scored KD 3.216 billion (65.9% of total assets) versus KD 3.026 billion (66.5% of total assets) in 2018. Percentage of loans and advances to costumers’ deposits declined to 82% down from 83.7%. 

Figures indicate that the bank’s liabilities (excluding total equity) rose by KD 320.1 million or by 8.3%, scoring KD 4.192 billion compared with KD 3.872 billion in the end of 2018. Percentage of total liabilities to total assets scored 85.8% compared with 85.1% in 2018.

The analysis of the bank’s financial statements indicates that all bank profitability ratios declined compared with the end of 2018. Average return on equities relevant to the bank shareholder (ROE) dropped to 4.8% from 7.3%. Likewise, the average return on the bank’s capital (ROC) decreased to 17.8% compared with 26.1%. The average return on the bank’s assets (ROA) decreased to 0.6% versus 0.9%. Earnings per share (EPS) declined to 14 Fils compared with 26 Fils. (P/E) scored 18.3 times compared with 11.3 times, due to the decline in the EPS by 46.2% versus a lower decline in the share market price by 13.2%. (P/B) scored 0.7 times versus 0.8 times in 2018.

The bank announced that it would distribute cash dividends by 7% of the nominal share value or 7 Fils per share. This means the share achieved 2.7% cash yield on the closing price at 256 Fils per share in the end of 2019. The cash dividends were 14% in 2018, therefore the bank decreased its distribution.