Al Tijari declared Net Profit of KD 19.1 million for half year 2021

Nature

Commercial Bank of Kuwait announced operating profit of KD 44.8 million and net profit of KD 19.1 million for the six months ended 30 June 2021 compared to KD 42.3 million and KD 1.2 million respectively for the same period last year. Significant increase in net profit by KD 17.9 million was mainly because of lower specific provision during current period.
 
Commenting on overall performance of the Bank, Sheikh Ahmad Duaij Al Sabah, the Bank’s Chairman, said that even in the on-going pandemic turbulence and aftermath of wave 2 impact, the Bank has not only noted positive recovery in its performance but also managed to hold its ground firmly which depicts the Bank’s deep-rooted fundamental core strengths to face any uncertainty which future might bring. Sheikh Ahmad further added the Bank will continue to embrace conservative approach of building provision cushion for any unexpected losses. As a precautionary measure, Al Tijari has allocated KD 25.8 million additional precautionary provision during the current period, total precautionary provision buffer as of 30 June 2021 is now KD 131.4 million representing 5.9% of the total loan portfolio.  This puts the Bank in a strong position to absorb any shocks resulting from any future economic or geopolitical crisis.


Quoting the macroeconomic factors, Sheikh Ahmad expressed that world-wide drop in GDP by 3.4%, in particular, growth in many Emerging Markets Economies lags behind, even as some witness more persistent inflation. Kuwait observed ease in movement/lockdowns, rigorous inoculation by the Government and improvement in oil price outlook that contributed optimism in Kuwaiti markets recovery for all sectors including the banking sector. Consequently, we are cautiously optimistic that Al Tijari is on positive track for the current year and improving scenarios will further strengthen our financial position in near term. However, there is still uncertainty ahead because the entire world entered the crisis suddenly; countries will “pandexit” at their own speed and in their own way thus Kuwait is no exception.


With regard to updates on the Bank’s initiatives, Mr. Al Ali stated that Al Tijari has always prioritized digitisation among all its strategic business plans.  In these challenging times, the exponential growth in users of the Bank’s digital products/services approaching  10,000 users over the year  opening new accounts with the Bank through CBK Mobile App. Furthermore, the banking transactions processed by the customers through CBK Mobile App. and online are evidence that our strategy has successfully paid off and that the digital banking services have already become the future of the banking industry. With that success, the Bank’s focus will be to continue upgrading systems and implementing innovative solutions and many initiatives on Retail, Corporate and Back-End services, to revolutionise banking services and products including treasury which are just examples of the same.

 Financial highlights

 Half year 2021  

 Half year 2020 

 Change %  

 Net profits (KD Million)

 19.1  1.2  1491.7%

 Operating profits (KD Million)

 44.8  42.3  5.9%

 Fee and Commission Income (KD Million)

 18.7  17.1  9.4%

 Foreign Exchange Income (KD Million)

 3.1  2.5  24.0%

 Customer Loans and advances (KD Billion)

 2.2  2.3  -4.3%

 Total Assets (KD Billion)

 4.1  4.4  -6.8%

 Cost to Income Ratio (%)

 30.1  31.3  -1.20%


Robust regulatory ratios comfortably exceeded the Central Bank’s statutory requirement, Capital Adequacy Ratio 18.7% against regulatory requirement of 11.0%. The available capital buffer is the core strength of the Bank and will be utilized responsibly to expand our loan portfolio in line with our growth strategy. Similarly, Liquidity Coverage Ratio 173.4%, Net Stable Funding Ratio of 105.6%, Leverage ratio of 12.2%, all are well above the statutory minimum requirements which would be deploy for quality assets expansion.

Apart from regular health and safety measures, as it has become the new norm, the Bank has conducted successful vaccine drive in its premises to inoculate the employees. Furthermore, our Human Resources Department is constantly encouraging all employees to get vaccinated and keeping track of any hindrances there on.

As part of our Corporate Social Responsibility, the Bank welcomed ‘The Be Aware Campaign’ “Diraya” launched by Central Bank of Kuwait and Kuwait Banking Association. Bank has been spreading awareness messages among its employees, customers’, citizens, and residents.

Sheikh Ahmad concluded his remarks by appreciating all the efforts by Kuwaiti Governmental organisation and its front-line workers to combat this pandemic, the regulatory authorities represented by the Central Bank of Kuwait for its continuous support to the banking sector, the Bank’s Executive Management and all staff for their dedication and rigorous efforts for customer service.  He highly wish Kuwait’s smooth “Pandexit” process in near-term.