Kuwait Finance House (KFH) Financial Results – 30 September 2019

Kuwait Finance House (KFH) achieved profits attributed for its shareholders during the first nine months of the current year of an amount of KD 190.5 million, a rise by KD 21.4 million or by 12.7% compared with KD 169.1 million in the same period of last year. The bank achieved an operating profit in the amount of KD 393.03 million, increasing by KD 25.6 million or by 7%, compared with KD 367.47 million, due to the rise in total operating income by a higher value than the rise in total operating expenses. Therefore, the bank achieved net profit from continuing and discontinuing operations by KD 1.3 million or by 0.6%, scoring KD 202.8 million compared with KD 201.5 million for the same period 2018.

In details, total operating income increased by KD 25.6 million or by 4.3%, reaching KD 615.2 million versus KD 589.6 million in the same period of last year. This was achieved due to the rise in the item of investment income by KD 43.1 million, to score KD 96 million versus KD 52.9 million. While item of net financing income dropped by KD 9.2 million, and scored KD 395.6 million compared to KD 404.8 million.

On the other hand, total operating expenses rose very slightly by no more than KD 6 thousand to become KD 222.1 million. Due to the rise in the item of depreciation & amortization by KD 6.67 million, while items of general & administrative expenses and staff costs dropped by a total of KD 6.66 million. Percentage of total operating expenses to total operating income scored 36.1%, compared with 37.7% in the same period of 2018. Total provisions increased by KD 13.8 million or by 10.6%, scoring KD 145 million compared with KD 131.2 million. The net profit margin from continuing and discontinuing operations declined to 33% versus 34.2% in the same period of last year. KFH’s total assets increased by KD 1.228 billion or by 6.9%, and scored KD 18.999 billion, versus KD 17.770 billion in the end of 2018. If total assets were compared with its amount in the same period of 2018, it would also increase by KD 1.692 billion or by 9.8%, when it scored KD 17.307 billion. Item of investment in Sukuk rose by KD 568.6 million or by 36.4%, scoring KD 2.132 billion (11.2% of total assets) compared with KD 1.563 billion (8.8% of total assets) in the end of 2018. It also increased by KD 656 million or by 44.5%, when it scored KD 1.476 billion (8.5% of total assets) in the same period of last year. Also, item of due from banks rose by KD 469.7 million or by 14.5%, reaching KD 3.718 billion (19.6% of total assets) compared with KD 3.248 billion (18.3% of total assets) in the end of 2018. It also increased by KD 525.1 million or by 16.4%, when it scored KD 3.193 billion (18.4% of total assets) in the same period of last year. While item of financing receivables decreased by KD 29.1 million or by 0.3%, and scored KD 9.356 billion (49.2% of total assets) compared with KD 9.385 billion (52.8% of total assets) in the end of 2018. Meanwhile it increased by KD 243 million or by 2.7%, compared with the same period of last year when it scored KD 9.113 billion (52.7% of total assets). Percentage of financing receivables to depositors’ accounts scored about 70.6% compared with 79.7%.

The bank’s total liabilities (excluding total equity) rose by KD 1.118 billion or by 7.1%, and scored KD 16.814 billion compared with KD 15.696 billion in the end of 2018. If we compare total liabilities with the same period of last year, it would rise by KD 1.483 billion or by 9.7%, when it scored KD 15.331 billion. Percentage of total liabilities to total assets scored 88.5% compared with 88.3% in 2018.Results of analyzing the profitability ratios calculated on annual basis indicate that all of the bank’s profitability ratios have increased, compared to their levels in the same period of last year. The average return on bank’s assets (ROA) increased to 1.4% compared with 1.3%. The average return on shareholders’ equities (ROE) rose to 13.4% compared with 12.2%. Likewise, the average return on bank’s capital (ROC) rose to 38.1% versus 37.2%. Earnings per share (EPS) rose to 27.67 Fils compared with 27.04 Fils. (P/E) scored 18.4 times versus 16.6 times, due to the rise in EPS by 2.3% against a greater rise in the market share price by 13.9% compared to their level on September 30, 2018. (P/B) scored 2.2 times compared with 1.9 times.