Kuwait International Bank (KIB) Financial Results 2019

Kuwait International Bank (KIB) announced results of its operations for 2019, which indicate that the bank’s net profit (after tax deductions) was at KD 17.3 million, decreasing by KD 3.7 million or by 17.7% compared with KD 21 million for 2018. This drop in net profit is due to the rise in total operating income by a value lower than the rise in total operating expenses, therefore the operating profit declined by KD 1.7 million or by 5.7%. The following graph displays development in profit level relevant to the bank shareholders during the period (2008-2019):

In details, total operating income increased by KD 1.9 million or by 2.8%, reaching KD 68.5 million compared with KD 66.6 million for 2018. This was caused by the rise in item of investment income by KD 2.5 million, reaching KD 4.1 million versus KD 1.6 million in the end of 2018. While the item of net financing income dropped by KD 972 thousand or by 1.8%, scoring KD 52.7 million compared with KD 53.7 million in 2018.

On the other hand, operating expenses rose by a higher value than the rise in total operating income, i.e. by KD 3.6 million or by 10.1%, reaching KD 39.5 million compared with KD 35.9 million, as a result of the rise in all items of operating expenses. Percentage of total operating expenses to total operating income scored 57.7% versus 53.9% in 2018. Item of provisions and impairment losses rose by KD 2.1 million or by 25.7%, and scored KD 10.3 million compared with KD 8.2 million. Therefore, the net profit margin decreased to 25.3% compared with 31.6% in 2018.

The bank’s financial statements indicate that the bank’s total assets rose by KD 519 million or by 23.9%, and scored KD 2.688 billion versus KD 2.169 billion in the end of 2018. Item of financing receivables rose by KD 259.8 million or by 16.2%, and scored KD 1.866 billion (69.4% of total assets) versus KD 1.606 billion (74% of total assets). Percentage of total financing receivables to total deposits scored 82.4% compared with 87.5%. Also, item of due from banks rose by KD 123.7 million or by 39.2%, and scored KD 439.4 million (16.3% of total assets) versus KD 315.8 million (14.6% of total assets) in the end of 2018.

Figures indicate that the bank’s liabilities (excluding total equity) increased by KD 420.2 million or by 22.2%, and scored KD 2.312 billion versus KD 1.892 billion in the end of 2018. Percentage of total liabilities to total assets scored 86% compared with 87.2% in 2018.

Analysis of the bank’s financial statements indicates that all bank profitability ratios declined compared with the end of 2018. Average return on equities relevant to the bank’s shareholders (ROE) dropped to 6.2% from 7.8%. The average return on the bank’s assets (ROA) dropped to 0.7% compared with 1%. Likewise, the average return on the bank’s capital (ROC) declined to 16.4% versus 20.3%. Earnings per share (EPS) dropped to 15.01 Fils compared with 21.52 Fils. (P/E) scored 18.3 times compared with 12.3 times, due to the declined in the EPS by 30.3% against a rise in the share market price by 3.8%. (P/B) scored 0.8 times versus 1.0 times in 2018.

The bank announced that it would distribute cash dividends by 7% of the nominal share value and 5% bonus shares, which is equivalent to 7 Fils per share. This means the share achieved 2.6% cash yield on the closing price in the end of 2019 at 274 Fils. The bank’s distributions in 2018 were at 11 Fils per share and 4% bonus shares.