KFH announced results of its operations for the year ending December 31st 2019, which indicate it achieved net profit (after tax deductions) at KD 261.8 million, declining by KD 1.7 million or by 0.6% compared with KD 263.5 million in 2018. The drop in the net profit resulted from the rise in total provisions by KD 34.4 million, in addition to the rise in taxes by KD 23.5 million compared with 2018, indicating that the major impact was caused by the rise in total provisions and taxes despite the increase in the bank’s operating profit.
And by looking at the net profit attributed to the bank’s shareholders we notice a KD 23.6 million or 10.4% increase, reaching KD 251 million versus KD 227.4 million in 2018, due to the decrease on non-controlling interests by KD 25.3 million or by 70.1%. The following graph displays the development in shareholders’ profits during 2008-2019:
n details, the bank’s total operating income rose by KD 68.4 million or by 9.2%, scoring KD 814.4 million compared to KD 746 million. This resulted from the rise in the item of investment income by KD 66.9 million or by 105.7%, reaching KD 130.2 million compared to KD 63.3 million in the end of 2018. Item of net financing income rose by KD 3 million or by 0.6%, reaching KD 530.3 million compared with KD 527.3 million in 2018.
Total operating expenses increased by a lesser value than the increase in total operating income, i.e. by KD 11.8 million or by 4%, and scored KD 304.3 million compared to KD 292.5 million, due to the rise in items of staff costs and depreciation & amortization by a total of KD 14.4 million, while item of general & administrative expenses decreased by KD 2.6 million. Total allocations also rose by KD 34.4 million or by 21.2% as mentioned previously, reaching KD 196.9 million compared with KD 162.5 million. This explains the drop in the net profit margin to 32.1% versus 35.3%.
KFH’s total assets rose by KD 1.621 billion or by 9.1%, to be at KD 19.391 billion compared with KD 17.770 billion in the end of 2018. Item of investment in Sukuk rose by KD 713.1 million or by 45.6%, scoring KD 2.276 billion (11.7% of total assets) versus KD 1.563 billion (8.8% of total assets). Also, Item of due from banks rose by KD 534.4 million or by 16.5%, and scored KD 3.783 billion (19.5% of total assets) versus KD 3.248 billion in the end of 2018 (18.3% of total assets). While item of financing receivables declined by KD 48.9 million or by 0.5%, reaching KD 9.336 billion (48.1% of total assets) versus KD 9.385 billion in the end of 2018 (52.8% of total assets). Ratio of total financing receivables to total deposits was at 57.3% versus 62.7%
Figures indicate that the bank’s liabilities (excluding equity rights) rose by KD 1.451 billion or by 9.2%, and scored KD 17.147 billion compared with KD 15.696 billion in the end of 2018. Total liabilities to total assets percentage registered at 88.4% versus 88.3% in 2018.
Analyzing the bank’s financial statements, the profitability ratios have showed mixed performances compared with the same period of 2018. Return on capital (ROC) dropped to 39.3% from 43.5%. likewise, return on assets (ROA) dropped to 1.4% from 1.5%. Return on equity (ROE) rose to 12.7% compared to 12.1%. Earnings per share (EPS) rose to 36.45 Fils compared to 33.06 Fils. Price to EPS (P/E) scored about 22.2 times compared to 18.5 times, as a result of the rise in the EPS by 10.3%, against a greater rise in the market share price by 32.7%. (P/B) scored about 2.5 times versus 1.9 times.
The bank announced that it would distribute cash dividends by 20% of the share’s nominal value, i.e. 20 Fils per share and 10% in bonus shares. This means the share achieved cash yield by 2.5% on the closing price in the end of 2019 which was 811 Fils. Cash distributions in 2018 were 20% and 10% as bonus shares, suggesting that the bank maintained its distributions level.