- We are well-prepared and positioned for different recovery scenarios, thanks to the flexible operational model and strong financial position
- The Bank has delivered good performance in 2020; a testimony to our dynamic business model and strategy, as well as our ability to adapt to the adverse operating conditions
- The Group is moving rapidly to diversify its income streams, stringently monitor cost and to grow organically in key markets, mainly Egypt and KSA
- We have good reason to be confident in our future as result of the strategic investments in our employees, operations and digital platforms supported by strong and healthy balance sheet
Kuwait: National Bank of Kuwait (NBK) posted a net profit of KD 246.3 million (USD 812.3 million) for the year ended 31 December 2020, compared to KD 401.3 million (USD 1.3 billion) for the same period last year; dropping by 38.6% year-on-year.
As of end of December 2020, NBK’s total assets grew by 1.5% on annual basis, to reach KD 29.7 billion (USD 98.0 billion), while customer loans and advances grew by 5.7% compared to the same period last year, to reach KD 17.5 billion (USD 57.7 billion) while customers’ deposits grew by 7.4% to reach KD 17.1 billion (USD 56.4 billion).
NBK’s Board of Directors has proposed the distribution of a cash dividend of 20 fils per share, representing 55.6% of net profit, in addition to 5% bonus shares (5 shares for every 100 shares). The cash dividend and bonus shares, if approved by the shareholders’ general assembly, shall be payable to the shareholders after obtaining the necessary regulatory approvals. Earnings per share (EPS) stood at 32 fils, as compared to 57 fils in 2019, while shareholders’ equity stood at KD 3.2 billion (USD 10.5 billion)
Commenting on the Bank’s results, Mr. Nasser Al-Sayer, The Chairman of the Board of Directors of National Bank of Kuwait, said: “In a profoundly challenging year, NBK performed well and we are pleased with the results achieved by the Group in light of exceptionally challenging operating conditions. This demonstrates the strength and resilience of our business model, the positive impact of our digital strategy and the dedication of our employees in performing their duties in such critical times.”
“The year 2020 was characterized by unprecedented challenges combined with a high level of uncertainty. NBK held up well in the face of extraordinary market conditions and clearly demonstrated its governance and prudent risk management. Furthermore, NBK reaffirmed its solid financial position alongside its commitment to supporting clients and the communities in which it operates.”
“Besides the growth in Islamic banking through our subsidiary, Boubyan Bank, remaining an important driver for earnings diversification, our international operations proved to play a vital role in mitigating risks and further diversifying our income streams.”
Al Sayer added: “The solid profits of the Bank and its strong capital base provided enough flexibility allowing for a sustained dividend policy despite the operational challenges. Throughout the year 2020, NBK boosted its capital levels by issuing KD subordinated Tier 2 bonds along with USD Tier 2 notes. The issuances being oversubscribed by 1.5x and 3.6x respectively were a testament to NBK’s strong credit profile.”
“Today, our main focus is to strength our operations in our international markets, leveraging the loyalty of our customers, while building a digitally driven culture to be fully prepared for the future.”
“Looking ahead, and although uncertainty continues to dominate the global macro scene, NBK is very well-prepared and positioned for different recovery scenarios, thanks to our flexible operational model and strong financial position.”
Al-Sayer concluded by extending his sincere appreciation to NBK employees for their devotion and commitment in supporting the bank’s customers with all their financial needs during these challenging times.
On his part, Mr. Isam Al-Sager, NBK Group CEO said: “Our 2020 profits is testimony to our dynamic business model and strategy, as well as our ability to adapt promptly to the adverse operating conditions that the pandemic imposed on us.”
Al-Sager highlighted that “the Bank has delivered good performance in 2020 considering the unprecedented operating environment that prevailed following the outbreak of COVID 19, along with the drop in oil prices and low interest rates.”
“The partial and full lockdown of activities that was introduced to limit the spread of the virus weighed heavily on businesses leading to a drop in transaction volumes. Our profitability was also negatively impacted by an increase in provisions that is mostly precautionary in nature as we maintain a conservative approach to risk”, Al-Sager pointed.
Al-Sager also highlighted that looking ahead, “The Group is moving rapidly to enhance fees and commission income streams and will stringently monitor costs, and this discipline has already enabled us to maintain operating expenses at an appropriate level. Moreover, NBK’s regional focus will be to grow organically in key markets, in particular Egypt and Saudi Arabia, where in the case of the former both the retail and wholesale markets offer compelling opportunities, while in KSA the Group’s wealth management proposition has strong momentum.”
Concluding his statements, Al-Sager said: “As we turn our attention to 2021, we have good reason to be confident in our future. We have created a strong position for ourselves through the strategic investments in our employees, operations and digital platforms”. In parallel, supported by a strong balance sheet, healthy asset quality and comfortable liquidity levels, we will be able to withstand the current crisis, and continue to deliver on our commitment towards all our stakeholders and returning to profitable growth”.
Performance and operating highlights: ·
. Net operating income of KD 842.5 million (USD 2.8 billion) for the year ended 31 December 2020, decreasing by 5.9% compared to the same period in 2019
· Total assets grew by 1.5% year-on-year as of end of December 2020, to KD 29.7 billion (USD 98.0 billion).
· Total loans and advances grew by 5.7% year-on-year to KD 17.5 billion (USD 57.7 billion).
· Customer deposits increased by 7.4% year-on-year to KD 17.1 billion (USD 56.4 billion),
· Strong asset quality metrics, with NPL/gross loans ratio at 1.72% and an NPL coverage ratio of 220.0%
· Robust Capital Adequacy Ratio of 18.4%, comfortably in excess of regulatory requirements
About National Bank of Kuwait (NBK):
NBK was founded in 1952 as the first home-grown bank and the first joint stock company in Kuwait and the Gulf Region. NBK reported net profits of USD 812.3 million (KD 246.3 million) for 2020. NBK's total assets were USD 98.0 billion (KD 29.7 billion) at the end of 2020, while shareholder equity stood at USD 10.5 billion (KD 3.2 billion).
NBK is the largest financial institution in Kuwait with effective market dominance in the commercial banking market and has been consistently awarded high credit rating of all banks in the region from Moody's, Standard & Poor's, and Fitch Ratings. NBK also stands out in terms of its local and international network, which includes branches, associates and subsidiaries in China, Geneva, London, Paris, New York, and Singapore alongside its regional presence in Lebanon, Jordan, Egypt, Bahrain, Saudi Arabia, Iraq, Turkey, and the UAE.
Long-term credit ratings:
- Moody’s A1
- Fitch Ratings AA-
- Standard & Poor’s A
© Press Release 2021