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Shares in Commercial Bank of Kuwait (CBK) rose sharply on Tuesday after the bank announced a surge in fourth quarter (Q4) earnings for 2018.
The bank’s Q4 net profit attributable to shareholders amounted to 48.5 million Kuwaiti dinars ($159.4 million), compared to 41 million Kuwaiti dinars for Q4 2017, translating into an 18.3 percent increase.
“Earnings for the nine (Kuwaiti) banks, that announced results for FY-18 (full year 2018), increased by 18.2 percent backed by a strong balance sheet as lending continues to increase y-o-y,” Faisal Hassan, head of investment research at Kuwait's KAMCO Investment Company told Zawya by email.
Hassan added that “all the Kuwaiti banks witnessed decent earnings growth during the year”.
A Thomson Reuters index of Kuwaiti banks shows that the sector’s shares have gained 4.09 percent in value so far in 2019.
“We expect that Kuwaiti banks would continue to attract investors’ attention against the backdrop talks of MSCI upgrade decision during the first half of 2019,” Hassan ended.
Index compiler MSCI will decide in mid-2019 whether to upgrade Kuwait to emerging market status. The market joined the FTSE Russell Emerging Market Index in two phases starting in the last week of September 2018, with the second phase occurring in December.
CBK announced that the Central Bank of Kuwait has approved the bank’s board of directors’ recommendation to distribute a cash dividend of 200 Kuwaiti fils per share and a bonus shares of 10 percent (10 shares for each 100 shares held).
CBK’s shares rose 6 percent on Tuesday to close the session at 530 Kuwaiti fils, pushing Kuwait’s All-Share Index to end the day 0.76 percent higher. The bank’s shares have now added 6 percent since the start of the year 2019.
According to data from Eikon, one analyst has a ‘hold' rating on CBK’s stock and one analyst has a ‘sell’ rating.
On November 15th, 2018 ratings agency, Moody’s Investors Service, affirmed the bank’s long-term deposit ratings at A3 with a stable outlook.
Elsewhere in the region, Dubai’s index dropped 0.46 percent on Tuesday, Abu Dhabi’s index fell 0.44 percent, Saudi Arabia’s index edged 0.67 percent higher, Qatar’s index dropped 1.33 percent, while Oman’s index fell 0.4 percent and Bahrain’s index dropped 0.66 percent.
(Reporting by Gerard Aoun; Editing by Michael Fahy)
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