Gulf Bank Financial Results 2019

The Gulf Bank announced its results for the fiscal year ending December 31 2019, which indicate that the bank achieved profits (after tax deduction) by KD 63.6 million, rising by KD 6.9 million or by 12.2% compared with KD 56.7 million for 2018. This rise in bank profits is due to the absolute rise in total operating income by a higher value than the rise in total operating expenses. Therefore, the operating profit rose by 1.7% or by KD 2.2 million, reaching KD 129.6 million compared with KD 127.4 million in 2018. The following graph displays the development in the bank’s profits during the period (2008-2019).

n details, total operating income of the bank increased by KD 13.2 million or by 6.8%, to reach KD 207.6 million compared with KD 194.4 million in 2018. This increase is due to the rise in the item of net interest income by KD 11.8 million or by 7.7%, scoring KD 164.4 million versus KD 152.6 million. In addition, item of other income increased by KD 1.1 million or by 69.3%.

Total operating expenses of the bank rose by a lesser value than the rise in total operating income, by KD 11 million or by 16.4%, reaching KD 78 million compared with KD 67 million in 2018, due to the rise in all items of the operating expenses except item of occupancy costs the declined by KD 1.8 million. Percentage of total operating expenses to total operating income scored 37.6% compared with 34.5%. Total provision decreased by KD 5 million or by 7.4%, scoring KD 62.9 million compared with KD 67.9 million. Therefore, the bank’s net profit margin decreased to 23.1% compared with 23.4% in 2018.  

The financial statements show that the bank’s total assets increased by KD 229.1 million or by 3.8%, and scored KD 6.245 billion versus KD 6.016 billion in 2018. Item of loans and advances to customers rose by KD 274.6 million or by 7%, and scored KD 4.225 billion (67.6% of total assets) versus KD 3.950 billion (65.7% of total assets) in 2018. Also, item cash & cash equivalents increased by KD 105.8 million or by 14.3%, scoring KD 847.9 million (13.6% of total assets) compared with KD 742.1 million (12.3% of total assets). While item of Kuwait Government treasury bonds dropped by KD 163.7 million or by 41.4%, and scored KD 232 million (3.7% of total assets) versus KD 395.7 million (6.6% of total assets) in 2018.

Figures indicate that the bank’s liabilities (excluding total equity) rose by KD 193.4 million or by 3.6%, scoring KD 5.581 billion versus KD 5.388 billion in 2018. Percentage of total loans and advances to customers, to total deposits and other balances was at 78.7% compared with 76.6% in 2018. Percentage of total liabilities to total assets scored 89.4% compared with 89.6% in 2018.

Results of analyzing financial statements indicate that all bank’s profitability ratios increased compared with the end of 2018. Average return on capital (ROC) increased to 20.9% versus 18.6%. Average return on equities (ROE) rose to 9.8% compared with 9.2%. Average return on assets (ROA) rose slightly to 1.04% versus 0.97%. Earnings per share (EPS) rose to 22 Fils compared with 20 Fils in the end of 2018. (P/E) scored 13.8 times compared with 12.6 time, as a result of increased EPS by 10% against a greater increase in the share market price by 20.2%. P/B scored 1.4 times versus 1.2 times in the end of 2018.

The bank announced that it would distribute 11% in cash dividends, i.e. 11 Fils per share which means that the share achieved a dividend yield of 3.6% on the closing price at 303 Fils in the end of December 2019. Cash dividends were at 10 Fils per share in 2018, which means that the bank increased its distributions in 2019.