In an interview with CNBC Arabiya

NPLs shrank to 1.98%

Kuwait, January 31st 2016

"KFH's policy focuses on increasing sustainable profitability and the core banking business. This has been translated in the 2015 financial results where KFH posted a net profit of KD 145.8 mln, an increase by 15.3 % over last year. The finance portfolio increased by 8.1% to KD 8.127 Bln, which is a healthy rate. KFH continues its efforts in expanding its banking business at the level of the Group while reducing the profits related to market volatility", said Kuwait Finance House -CEO Mazin Saad Al-Nahedh.  

He added in an interview with CNBC Arabiya conducted at KFH headquarters, that KFH's exposure to stocks is minor, indicating that 92% of guarantees on offered financing are against monetary or real estate guarantees.

Al-Nahedh explained that KFH's provisions in 2015 reached KD 147 mln, noting that the total provisions of the Group as of the end of 2015 reached KD 668 mln, an increase by 1.83% over the same period last year. These provisions are distributed as KD 492 mln as financing provisions, and KD 176 mln as investment provisions. 

He clarified that the non-performing loans NPLs dropped to 1.98% as of end 2015 from 2.46% in 2014. They dropped to 3% from 3.9% for the Group. The coverage of NPLs reached 114%. These numbers puts KFH on the right track. KFH is continuing its prudent policy in setting aside provisions against NPLs, noting that the bank had already set aside provisions against all its NPLs.

Furthermore, capital adequacy ratio (CAR) reached 16.67% after the distribution of profits to shareholders as 17% cash distributions and 10% bonus shares. KFH shrank its share in Alafco Aviation Lease and Finance Company to 47% from 53%, not to mention that the Gulf Investment Corporation entered as a major shareholder in the said company.

Al-Nahedh stated that the fluctuations in oil prices and viewing this commodity as the main source of the economy affect the budget, indicating that the government has taken several steps that contribute in boosting the economy. He calls on further government projects that are considered vital and energize the market. Al-Nahedh voiced hope for the government to issue sukuk or bonds especially that banks enjoy high levels of liquidity which is a chance for them to participate in bridging the budget deficit.

-Ends-

Kuwait Finance House (KFH)
KFH was established in Kuwait in 1977 and is enlisted in the Kuwait Stock Exchange. KFH Group is a global pioneer in the field of Islamic banking services, where it offers a wide array of Islamic products and services, not to mention a high standard of innovation and client service.

KFH manages its operations in the GCC, Asia, and Europe through over 446 branches, including KFH-Turkey, in order to offer services for the bank's clients in Turkey, Malaysia, Saudi Arabia, Bahrain, Germany, Jordan, and Dubai.

KFH's mission is to achieve highest levels of excellence and innovation in the field of client service, while developing common interest for all those concerned with the financial institution. KFH's vision is to spearhead the global development in Islamic financial services, and to upgrade the bank into the level of becoming the most sustainable profitable Islamic bank in the world.

KFH's values include cementing leadership through all its businesses, including leadership in the Islamic banking services worldwide, through innovation and in client service and the development of its employees. In addition, KFH is committed to all its procedures, and to setting up long-life partnerships with the concerned authorities.

For more information, please visit: www.kfh.com

© Press Release 2016