Al-Ahli Bank of Kuwait (ABK) Financial Results – 30 September 2019

Al-Ahli Bank of Kuwait (ABK) announced results of its operations for the nine months of the current year, which showed that the bank’s net profits, after tax deductions, scored about KD 15.6 million, decline by KD 11.6 million, or by 42.7%, compared with KD 27.1 million. This decrease in net profits is due to increase in provisions by a higher value as compared to the increase in operational income. Provisions reached KD 60.6 million, a rise by KD 12.2 compared to KD 48.4 million or by 25.1%.

In detail, total operational income increased by KD 2.9 million, or by 2.3%, and scored KD 129.7 million compared with KD 126.8 million. This resulted from a rise in bank’s net interest income by KD 5.2 million or by 5.8% scoring KD 95.3 million, compared to KD 90.1 million in the same period of 2018. While item of net gain on investment securities decreased by KD 2.1 million or by 51.3% and scored KD 1.9 million versus KD 4 million in the same period of 2018.On the other hand, total operational expenses increased by KD 2.4 million, or by 5%, and scored KD 50.5 million, compared with 48.1 million for the same period of 2018, as a result of a rise in all items of operational expenses, except item of other operating expenses which decreased by KD 91 thousand. Percentage of total operational expenses to total operational incomes also increased scoring 38.9% versus 37.9%. Total provisions increased by KD 12.2 million, or by 25.1%, as we mentioned. As a result, net profit margin dropped to 8.4% compared with 16.8% for the same period of 2018. Total bank’s assets scored KD 4.824 billion, an increase by KD 276 million or by 6.1%, compared with KD 4.548 billion 

In detail, total operational income increased by KD 2.9 million, or by 2.3%, and scored KD 129.7 million compared with KD 126.8 million. This resulted from a rise in bank’s net interest income by KD 5.2 million or by 5.8% scoring KD 95.3 million, compared to KD 90.1 million in the same period of 2018. While item of net gain on investment securities decreased by KD 2.1 million or by 51.3% and scored KD 1.9 million versus KD 4 million in the same period of 2018.On the other hand, total operational expenses increased by KD 2.4 million, or by 5%, and scored KD 50.5 million, in the end of 2018. It increased by KD 197.8 million or 4.3%, if compared with the total assets in the same period of 2018, when they scored KD 4.627 billion. Item of loans and advances, the largest contributor of the bank’s assets, increased by about KD 171.4 million, or by 5.7%, and scored KD 3.197 billion (66.3% of total assets) versus KD 3.026 billion (66.5% of total assets) in the end of December 2018. It increased by KD 74.9 million, or by 2.4%, if compared with the same period of 2018, when it scored KD 3.122 billion (67.5% of total assets). Percentage of total loans and advances to total deposits scored 82.6% compared with 84.3% for the same period 2018. This drop was caused by the increase in deposits by a higher value than the increase in loans. Item of cashand balances with banks increased by KD 162 million or by 23.1% and scored KD 864.2 million (17.9% of total assets) versus KD 702.2 million (15.4% of total assets) in the end of last year. It increased by KD 81.1 million or by 10.4% from the end of the same period of 2018, when it scored KD 783.1 million (16.9% of total assets).

Figures indicate that the bank’s liabilities (without calculating total equity) increased by KD 278.1 million, or by 7.2%, and scored KD 4.150 billion compared with KD 3.872 billion in the end of 2018, and increased by KD 190.5 million or by 4.8%, compared with the total in the end of the same period of last year when it reached KD 3.960 billion. Percentage of total liabilities to total assets scored 86% compared with 85.6%.

Results of analyzing the bank’s financial statements calculated on annual basis indicates that all bank profitability indexes decreased compared with the same period of 2018. Average return on equities relevant to bank shareholders (ROE) dropped to 3.5% compared with 6.3%. Likewise, the average return on the bank’s capital (ROC) dropped to 12.8% versus 22.3%. The average return on the bank’s assets (ROA) decreased to 0.4% compared with 0.8%. (EPS) decreased to 5 Fils compared with 17 Fils. (P/E) scored 45.8 times compared with 13 times, due to the decrease in the (EPS) by 70.6% versus an increase in market share price by 3.4% compared with its price on 30 September 2018. (P/B) scored 0.85 time compared with 0.83 time in the same period last year.