Gulf Bank Financial Results – 30 September 2019

The Gulf Bank announced its results for the first 9 months of the current year which indicate that it achieved profits (after tax deductions) by KD 37.13 million, declining by KD 5.55 million or by 13% compared with KD 42.68 million in September 2018. That decrease in bank profits was heavily caused by the decline in total operating income against the rise in total operating expenses. Accordingly, the operating profit decreased by KD 14 million or by 14.4%, reaching KD 83.42 million versus KD 97.42 million for the same period of last year.

In details, total operating income was at KD 141.85 million, decreasing by KD 3.88 million or by 2.7% compared to KD 145.73 million. This was due to the decline in the item of net interest income by KD 4.76 million, scoring KD 110.62 million versus KD 115.38 million in September 2018. While item of other income increased by KD 1.46 million, and scored KD 2.23 million compared to KD 769 thousand.Total operating expenses of the bank rose by KD 10.12 million or by 20.9%, reaching KD 58.44 million compared with KD 48.32 million in the same period of 2018. This rise was caused by the rise in all items of operating expenses, except for the item of occupancy costs that decreased by KD 1.32 million. Percentage of total operating expenses to total operating income scored 41.2% versus 33.2%. Total provisions declined by KD 8.20 million or by 15.5%, to reach KD 44.54 million compared to KD 52.74 million. Therefore, the bank achieved a net profit margin by 19.2%, versus 23.7% compared with the same of period of last year.

Financial statements of the bank show that total assets increased by KD 138.8 million or by 2.3%, to KD 6.155 billion compared with KD 6.016 billion in the end of 2018. Total assets increased by KD 206 million or by 3.5%, compared with the same period in 2018 when total assets scored KD 5.949 billion. Item of loans and advances to customers rose by KD 42.2 million or by 1.1%, and scored KD 3.992 billion (64.9% of total assets) compared with KD 3.950 billion (65.7% of total assets), and it increased by KD 171.1 million or by 4.5% compared with KD 3.821 billion (64.2% of total assets) in September 2018. Percentage of loans and advances to customers to total deposits and other balance scored 75.6% against 74.4% in September 2018. Likewise, item of cash and cash equivalents rose by 42.1% or by KD 312.8 million, and scored KD 1.055 billion (17.1% of total assets) versus KD 742.1 million (12.3% of total assets). It also rose by KD 249.5 million or by 31%, when it achieved KD 805.4 million (13.5% of total assets) in the same period of 2018.

Figures indicate that the Bank’s liabilities (excluding total equity) increased by KD 129.4 million or by 2.4%, reaching KD 5.517 billion compared with the end of 2018. Total liabilities increased by KD 181.6 million or by 3.4%, when compared with September 2018. Percentage of total liabilities to total assets was at 89.6% versus 89.7% in the of the same period of 2018.

Results of analyzing financial statements calculated on annual basis indicate that all bank profitability indexes decreased compared with the same period of 2018. Average return on assets (ROA) declined to 0.8% compared with 1%. Average return on capital (ROC) decreased to 16.2% compared with 18.7%. Average return on equities (ROE) also decreased to 7.8% compared with 9.4%. Earnings Per Share (EPS) declined to 13 Fils compared to 15 Fils. (P/E) scored 16 times compared with 12.7 times, as a result of the decreased EPS by 13.3% against an increase in share market price by 9.4% compared with its price in the end of September 2018. (P/B) scored 1.33 times versus 1.26 times.