vKIB reports KD 6.9mln operating profit for Q1 2021

• 27% Growth in operating profit
• 4% Growth in total assets
• 4% Growth in financing portfolio
• 13% Growth in investment securities portfolio
• 11% Growth in depositors' accounts
• High Capital Adequacy Ratio of 22.19%
• Fitch Ratings affirmed A+ (negative) ratings
• Profits were credited to depositors’ accounts upon announcement of the financial results

Kuwait: Despite the current economic situation and the lingering repercussions of the COVID-19 crisis, Kuwait International Bank (KIB) achieved KD 6.9 million of operating profit before provision during the first three months of 2021, compared to KD 5.4 million recorded at the end of the same period last year, an increase of KD 1.5 million and a growth of 27%. During the first three months of the year, KIB reported a net profit of KD 1 million compared to KD 2.7 million in the first three months of 2020. The lower net profit could be attributed to the prudent build up of provisions.

Commenting on the Bank’s financial results, the Bank's Chairman, Sheikh Mohammed Jarrah Al Sabah, noted that KIB's financial statements have shown that the Bank's assets grew by 4% to reach KD 2.81 billion, comparable to KD 2.7 billion at the end of March 2020. This growth was the result of an increase in the size of the financing portfolio by KD 73 million to reach nearly KD 2 billion, compared to KD 1.92 billion at 31 March 2020, achieving a growth of 4%. In addition, KIB’s investment securities portfolio grew (mainly high quality Sukuk) by about KD 22 million. Depositors’ accounts grew by KD 165 million, a growth of 11% to reach KD 1.73 billion  compared to KD 1.56 billion at the end of March last year, while the shareholders’ equity reach to KD 260 million.

In his statement, Al-Jarrah pointed out that KIB always seeks to maintain growth across his key financial indicators whilst preserving the stability of its financial returns, as well as strengthening its financial position as a key player in the regional debt capital markets. He added: “KIB continues to be committed to developing and expanding its financing footprint on the local, regional and international level.

Al-Jarrah noted that KIB acted as a Joint Lead Manager and Bookrunner in the Additional Tier 1 (AT1) perpetual NC6Y Sukuk issuance by Boubyan Bank, for USD 500 million. Additionally, KIB participated as Co-Manager in the first-of-its-kind issuance of ‘Sustainability Sukuk’ by the Islamic Development Bank (IsDB) in 2021. The Bank has raised US $2.5 billion via the Sustainability Sukuk, and the proceeds were allocated to funding/refunding sustainable development (10%) and social impact projects (90%). Moreover, Al-Jarrah emphasized that KIB’s drive to continuously participate in successful financial deals demonstrates a high level of confidence and expertise, which contributes greatly towards fortifying the Bank’s position in the local, regional and international investment market.

He further mentioned that, Fitch Ratings, vide report issued on 29 April 2021 has affirmed KIB’s Long-term Issuer Default Rating (IDR) at 'A+' and viability rating (VR) at “bb-”, with a negative outlook.

On his part, Vice Chairman and Chief Executive Officer at KIB, Raed Jawad Bukhamseen, said: “KIB achieved growth in its financial position during the first quarter of 2021, with total assets rising by 4% compared to March 2020, reaching KD 2.81 billion at the end of the first quarter of this year. Operating income for the first quarter of 2021 also increased by 13% compared to the same period last year. Furthermore, distribution ratios on depositors' accounts recorded good annual returns by the end of the first quarter of this year reflecting the Bank’s success in achieving its profitability and diversification objectives. Profits were credited to depositors’ accounts upon announcement of the financial results."

He further added: "By pushing ahead with its strategy for continuous growth and development, KIB strives to maintain its position as a key player in the banking sector by providing services and products with exclusive features tailored to fit customers’ unique requirements, including the launch of the new KIB Black segment in the first quarter of 2021, which offers exclusive lifestyle benefits to KIB customers. The launch of this campaign came as part of the Bank’s commitment to providing its customers with exclusive privileges that fit right into customers’ contemporary lifestyle and meet their expectations."

Bukhamseen also stressed that KIB was able to support its growth strategy in order to maintain its financial position in the regional debt capital markets. That being said, the Bank successfully concluded a series of successful financial transactions last year, including the issuance $300 million Tier 2 Basel III compliant 10-Year non-call 5-year Sukuk. These first-of-its-kind instruments were at a profit rate of 2.375% per annum, with a total participation reaching approximately US$2.7 billion, which is about 9 times the volume of Sukuk issuances. The Tier 2 Capital Sukuk are the highest rated T2 in Kuwait and the GCC, in addition to being the first USD T2 Sukuk from Kuwait to be listed on London Stock Exchange (LSE). This issuance enhanced the bank long term funding base and increased KIB’s capital ratios in accordance with Basel III; this was reflected on the Bank’s capital adequacy ratio, which reached 22.19% as of December 31, 2020, thus exceeding the minimum required levels of the Centra; Bank of Kuwait’s (CBK) regulatory bodies. During 2020, the Bank made significant progress in terms of enhancing its capital, as highlighted by Fitch assigning KIB’s AT1 Sukuk  ‘A-’ rating and a final A+'/'F1' long- and short-term ratings respectively to the Bank's Sukuk program.

Concluding his statement, Bukhamseen lauded the sincere efforts of KIB’s employees and praised their great performance in dealing with customers professionally while delivering the best-in-class banking services, stressing that these efforts contributed to maintaining the confidence of shareholders and customers in the Bank’s ability to achieve excellent financial results and perform its role effectively, adding: “Our vision is to achieve further growth in shareholder returns and expand our customer base by continuing to follow prudent risk management policies.”

-Ends-

About KIB

Kuwait International Bank (KIB) is a bank that operates according to the Islamic Shari’ah, based in the State of Kuwait. Incorporated in 1973, and originally known as Kuwait Real Estate Bank, KIB made the transition to its current Islamic operating model in 2007. In 2018, KIB embarked on a new phase of its journey full of innovation and development. As part of its new strategic direction, the Bank focuses on offering a next-level customer experience under the slogan: “Bank for Life”. 

Through a network of branches spread across the State of Kuwait, KIB offers a broad range of banking products and services, as well as innovative digital banking solutions in line with international best standards. As part of its duty towards the community, the Bank also encompasses a leading social responsibility program that aims at positively impacting all members of the community through a wide range of impactful initiatives and activities.

Today, KIB has taken concrete steps in implementing its new strategic objectives. The Bank has cemented its role as a key player in the local banking industry and has continued to maintain its strong financial performance; enabling it to be globally recognized for its strong credit rating and financial position.

Mouna Roumie
Senior Editor, Content
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© Press Release 2021