Al Ahli Bank of Kuwait Financial Results (ABK) – First Half 2019

Al-Ahli Bank of Kuwait announced results of its operations for the first half of the current year which showed that the bank’s net profits (after tax deduction) scored KD 22.65 million, a rise by KD 3.50 million or by 18.3% compared with KD  19.15  million.  This rise in net profits is due to the rise in total operating income by a higher value than the rise in total operating expenses, alongside the decrease in total provisions by KD 2.02 million. Therefore, the bank’s operating profit (before provisions deduction) increased by KD 1.99 million or by 3.9%, and reached KD 53.66 million versus KD 51.67 million in the same period of last year.

In details, total operating income rose by KD 3.20 million or by 3.82%, to KD 87.05 million versus KD 83.85 million. This resulted from the rise in the item of net interest income by KD 5.27 million or by 9%, reaching KD 63.98 million compared with KD 58.71 million for the same period of 2018. Item of net fees and commission income increased by KD 1.60 million or by 10.6%, while item of net gain on investment securities decreased by KD 2.75 million or by 73.1%. 

On the other hand, total operating expenses rose by a lower value than the rise in total operating income by KD 1.21 million or by 3.77%, and scored KD 33.39 million versus KD 32.18 million for the same period of 2018. This is due to the increase in the items of staff expenses and depreciation & amortization by KD 1.35 million, while item of other operating expenses decreased by KD 135 thousand. Percentage of total operating expenses to total operating income scored 38.36% compared with 38.38%. Total provisions decreased by KD 2.02 million or by 6.6%, and scored KD 28.49 million versus KD 30.51 million. Therefore, the net profit margin rose to 18.7% versus 18.4% for the same period of 2018.

Total bank assets scored KD 4.734 billion, an increase by 4.1% or by KD 186 million compared with KD 4.548 billion in the end of 2018. Total assets rose by 5.7% or by KD 255.2 million if compared with total assets in the first half of 2018 when total assets scored KD 4.479 billion. Loans and advances portfolio, the largest contributor to the bank’s assets, increased by KD 123.3 million or by 4.1%, raising the total portfolio to KD 3.149 billion (66.5% of total assets) versus KD 3.026 billion (66.5% of total assets) in the end of 2018. Total portfolio rose by KD 49.4 million or by 1.6%, if compared with the same period of 2018 when it scored then KD 3.100 billion (69.2% of total assets). Percentage of total loans and advances to total deposits scored 83.3% versus 84.9%. Item of cash and balances with banks increased by KD 67 million or by 9.5%, and scored KD 769.3 million (16.2% of total assets) compared to KD 702.2 million (15.4% of total assets) in the end of last year. It rose by KD 129.8 million or by 20.3%, from its amount in the end of the same period of 2018 when it reached KD 639.5 million (14.3% of total assets). 

Figures indicate that the bank’s liabilities (excluding total equity) increased by KD 179.5 million or by 4.6%, and scored KD 4.052 billion compared with KD 3.872 billion in the end of 2018. Total liabilities increased by KD 141.9 million or by 3.6%, when compared with its value in the first half of 2018. Percentage of total liabilities to total assets scored 85.6% versus 87.3%.

Analysis of the bank’s financial statements calculated on annual basis indicates that most bank profitability ratios increased compared with the same period of 2018. Return on average equities (ROE) rose to 7.7% from 6.7%. Likewise, the return on average capital (ROC) also increased to 28% versus 23.7%. The return on average assets (ROA) increased to 1% versus 0.9%. Earnings per share (EPS) remained at 12 Fils for the two periods. (P/E) scored 13 times (improved) compared with 13.9 times due to the unchanged EPS, against a decline in the market share price by 6.6%, compared with its price on June 30th 2018.  (P/B) scored 0.85 times compared with 0.95 times in the same period of last year.