KUWAIT: Al-Ahli Bank held its ordinary and extraordinary General Assembly meetings at its head office yesterday amid optimistic atmosphere in the light of the record financial gains achieved by the bank during 2005. The General Assembly approved a cash dividend of 30% (30 fils per share) and 5% bonus shares for the shareholders who have been registered in ABK records on the date of the General Assembly, for the financial year ended December 31, 2005.
In his comments on this exceptional performance, Ahmed Yousuf Behbehani, the Chairman of ABK stated that: "ABK has made outstanding achievements during the year and set a new record of net profits of KD 47 million, with a growth of 73% compared to 2004. The earning per share has increased from 30 fils in 2004 to 51 fils in 2005 with a growth rate of 70%. The ROA has increased by 49% to 2.53% and the ROE increased by 46% to19.38%. The profit margin has largely increased compared with other banks."
Major achievements
These achievements include the following: Highest rate of net profit growth, complete implementation of Basel II as per the instructions of the Central Bank of Kuwait, participation in funding various infra-structure projects in the State of Kuwait, expansion of the branches network and ATMs, use of advanced technology for retail banking through internet banking, SMS services and Techno Branch, and successful implementation of Kuwaitisation policy.
Successful Plan
These exceptional results reflect the successful implementation of the Strategic Plan set by the Bank and prove the importance of teamwork and contribution of all departments that has led to such performance, which exceeded all expectations and set new standards for success. The Bank has achieved outstanding growth through the year, while complying with all ratios regulated by the Central Bank of Kuwait.
Upgraded Credit Ratings
The world's leading credit rating agencies for financial institutions praised the strong performance of ABK and raised its ratings: Standard & Poor's raised the Bank's rating for long term to (BBB+), for short term to (A2) and financial position to (A2), while Capital Intelligence raised the Bank's ratings for long term to (A2), financial position to (A-) and short term to (A2), with a stable outlook for the Bank's long-term foreign currency deposit, indicating good credit quality. These successes portray the intrinsic strength of the Bank's financial position, well-planned strategy and good liquidity. The rating agencies also praised the capital adequacy, asset quality and lower cost. They expect the continued improvement and growth of the Bank.
Corporate Achievements
The Corporate Banking Group exploited the investment opportunities in the local market. It has succeeded in making some major deals in various economic sectors such as oil, gas, power stations and services. The Bank adopts the strategy of diversifying the sectors to mitigate risk and diversity the sources of income.
Major Developments
When asked about the major developments witnessed by the Bank, Mr. Behbehani stated: "ABK continued to invest significantly in technology and in increasing the range of retail banking services offered to customers throughout the year. By introducing the eAhli online banking service, SMS banking, the Ahlan Ahli Customer Service Center, and in expanding and upgrading the ATM network, the Bank is better positioned to meet the evolving needs of customers. The Bank also enhanced the concept of self- service by the establishment of "Techno Branch", which is the first of its kind in the banking industry. Several internal procedures were also automated which has improved response times and streamlined administrative processes. The Bank will continue to increase the range of services offered through our online channels to meet the needs of the corporate sector, continuing to expand both the branch and ATM networks and in rolling out the techno branch self-service banking concept.
Strategic Initiatives
Regarding the strategic initiatives made, Behbehani indicated that ABK has been taking measures to obtain the necessary approvals from the competent authorities in order to establish a new subsidiary Ahli Capital with a paid-up capital of KD15 million. Ahli Capital will act as a specialised investment arm of the Bank, conducting all investment activities, business and services under independent management.
Basel II
In preparation for compliance with the new Basel II framework, Mr. Behbehani stated that ABK has implemented a number of risk management policies and procedures throughout the Bank's operations, fulfilling all requirements in accordance with directives from the Central Bank of Kuwait. The Bank is honored that it was selected to chair the Implementation Committee of Risk Managers.
HRD Investment
ABK is careful to invest in human resources. It has continued to increase the number of talented Kuwaiti nationals employed and has achieved the percentage of national manpower required as per Central Bank of Kuwait regulations. The Bank will continue to enhance training, compensation and benefits schemes in order to attract and retain the most qualified personnel.
Non-Performing Loans
Behbehani, when asked about ABK's achievement in the non-performing loans and credit risks, said: "The Bank has applied conservative and effective set of policies and measures to strengthen and enhance prudent risk management practices. It uses effective techniques to manage credit risks and capital adequacy ratios that accord with Basel II requirements to identify and assess the credit risk optimally. The bank uses the most advanced model to measure the risk rating of ABK retail and corporate customers. On the other hand, the Bank strengthens and enhances its efforts to improve the quality of loan portfolio and control any non-performing loans. The bank has been successful in reducing the ratio of non-performing loans to a large extent. These prudent measures contributed to the improvement of credit portfolio quality, with no new irregular cases in major accounts despite the high growth of the asset portfolio. The world rating agencies praised the quality of ABK risk management".
Promotional Activities
As for promotional activities, ABK continued to enhance its name and logo supported by integrated marketing communication campaigns utilising radio, outdoor and television mediums, as well as local and foreign newspapers, to further raise its profile in the banking industry.
Further marketing initiatives have included a sustained program of sponsoring cultural events and exhibitions in the community, as well as ongoing commitments to a number of charitable and philanthropic institutions.
The Bank has benefited from a number of strategic alliances formed with major retailers and partner companies to provide special benefits and rewards to the Bank's customers when they use ABK-Emirates credit cards and when they obtain Ahli loans. The Bank succeeded in attracting a large portion of new businesses.
Community Service
In the community, ABK has played a major role in supporting many social institutions, contributing donations to various educational, health, social, sporting, cultural and environmental activities. The Bank will continue to support such activities as a part of its mission and role to serve the Kuwaiti society.
Outlook
About the future outlook of ABK, Behbehani stated that the expectations for the Kuwaiti economy over the next years are promising with large investment opportunities and government projects, which can be financed by the national banks.
Behbehani concluded his statement saying that he is optimistic and proud of the outstanding performance and record results of the Bank and the exceptional profits over the last six years. The Bank will continue to exert more efforts and continue to achieve its strategic plan and provide the best banking services. It will concentrate on quality of service, investment in local branch network, effective control over the expenditure, improvement in performance in general and employment of qualified staff, to cope with the new challenges and to elevate the Bank's performance to a leading position amongst the peer banks in the region.
© Kuwait Times 2006
