Kuwait International Bank (KIB) Financial Results – 30 September 2019

Kuwait International Bank (KIB) announced results of its operations for the first nine months of the current year, which indicate that the bank achieved net profits (after tax deductions) by KD 12.92 million, decreasing by KD 2.64 million or by  17%  versus  KD  15.56 million for the same period in 2018. This resulted from the increase in total operating income by a lower value than the increase in the operating expenses, accompanied by the increase in total provisions by KD 2.54 million or by 45.1%. Therefore, the bank’s operating profit (before provisions deductions) declined by KD 244 thousand or by 1.1%, reaching KD 22.18 million compared with KD 22.42 million.

In details, total operating income increased by KD 2.16 million or by 4.4%, and scored KD 51.79 million compared with KD 49.63 million for the same period in 2018, due to the rise in the item of net financing income by KD 680 thousand that scored KD 39.93 million versus KD 39.25 million. Also, item of investment income rose by KD 1.14 million, scoring KD 3.06 million compared with KD 1.92 million.Total operating expenses rose by a higher value than the rise in total operating income, i.e. by KD 2.41 million or by 8.9%, reaching KD 29.62 million compared with KD 27.21 million in the same period of 2018 due to the rise in all items of the operating expenses. Total provisions rose by KD 2.54 million or by 41.5% as mentioned previously, and scored KD 8.68 million compared with KD 6.14 million. This explains the decline in net profit margin to 24.9% compared with 31.4% in the same period of 2018.The bank’s financial statements indicate that the total assets increased by KD 262.7 million or by 12.1%, reaching KD 2.431 billion versus KD 2.169 billion in the end of 2018. It increased by KD 353.4 million or by 17%, when compared with the same period of 2018 when it scored KD 2.078 billion. Item of financing receivables rose by KD 142.4 million or by 8.9%, and scored KD 1.748 billion (84.1% of total assets) versus KD 1.606 billion (83.8% of total assets) in the end of 2018. It also rose by KD 205.2 million or by 13.3%, compared with the same period of 2018 when it scored KD 1.543 billion (74.3% of total assets). Percentage of total financing receivables to total deposits scored 86.7% versus 88.1%. Moreover, item of cash & balances with banks increased by KD 95.6 million or by 229.9%, and scored KD 137.2 million (6.6% of total assets) versus KD 41.6 million (2.2% of total assets) in the end of 2018. It also rose by 142.9% or by KD 80.7 million, compared with KD 56.5 million (2.7% of total assets) in the same period of 2018. Figures indicate that the bank’s liabilities (excluding total equity) increased by KD 167.6 million or by 8.9%, reaching KD 2.060 billion versus KD 1.892 billion in the end of 2018. It rose by KD 252.7 million or by 14%, compared with KD 1.807 billion in same period of 2018. Percentage of total liabilities to total assets scored 84.7% versus 87%.

Results of analyzing the financial statement calculated on annual basis indicate that all profitability ratios decreased compared with the same period of 2018. Average return on equities relevant to bank’s shareholders (ROE) dropped to 6.2% compared with 7.8%. Likewise, the average return on assets (ROA) decreased to 0.7% versus 1%. Also, the average return on capital (ROC) decreased to 16.3% compared with 20%. Earnings Per Share (EPS) declined to 13.18 Fils compared with 15.94 Fils. (P/E) scored 15.4 times versus 11.2 times, as a result of the decline in the EPS by 17.3% against a rise in the market share price by 13.9% compared to their level in the end of September 2018. (P/B) scored about 0.8 times compared with 0.9 times in the same period of last year.