Al-Tijari declares Operating Profit before Provisions KD 108.5 Million for 2019
Commercial Bank of Kuwait announced an operating profit, before provisions, of KD 108.5 million for the year 2019 (2018: KD 106.0 million). In line with Bank’s prudent policy of proactive recognition of problems, the operating profit was mainly allocated to specific provisions against certain loans where the management has some concerns. The specific provision was used to transfer those loans to the memorandum account. The resultant net profit attributable to the shareholders of the bank is zero for the year 2019 (2018: KD 63.8 million). As at the end of the year, total provisions held with the bank amounted to KD 127.3 million. The Bank will continue to pursue its right to recover loans transferred to the memorandum account by taking appropriate measures required in this regard. The operating profit before provision was higher by KD 2.4 million (2.3%) compared to last year. The Bank witnessed a healthy growth in the key areas of business and revenue. Total assets increased by 9.0% to reach KD 4.9 billion. Operating income grew by 5.1%, interest income by 3.6% and fee income by 4.2%.
Sheikh Ahmad Duaij Al Sabah, the Bank’s Chairman, commented that the Bank continues to focus on asset quality, digitalization, operational efficiency and customer service. The prudent policy of maintaining a portfolio of quality assets, and early recognition of any expected delinquency will continue to protect the interests of all stakeholders. This policy is extremely important to meet the challenges of the volatile economic and geopolitical situation in the region.
Sheikh Ahmad continued that the Bank’s capital adequacy ratio at the end of December 2019 stood at 18.1%, leverage ratio at 11.0%, net stable funding ratio 113.5% and liquidity coverage ratio 171.0% comfortably exceeds the regulatory requirement set by the Central Bank of Kuwait. He emphasized that the Bank’s strong financial indicators are due to its consistent policy of cleaning its loan portfolio by writing off irregular loans, while taking all the necessary steps to protect the interests of the Bank. The NPL ratio at zero is a clear demonstration of this strategy.
Sheikh Ahmad further added that our digitalization initiatives continue at a rapid pace across the Bank, introduction of innovative products and delivery channels, optimization of operational efficiency to create a pleasant and seamless customer experience. Investment in technology and human capital will continue to meet the challenges currently faced by the banking industry. New initiatives were taken during the fourth quarter of the year with features like, but not limited to, Electronic Dividends subscription via CBK Mobile, display foreign currency transaction and its KD equivalent for accounts & prepaid cards and enhanced notifications via CBK mobile by enabling/disabling all accounts/cards alerts in a single OTP request. Moreover, in a continuous effort towards nationalisation, we initiated the Al-Tijari Graduate Program, that's exclusive to Kuwaiti graduates, re-enforcing the bank's commitment to enable and invest in our national graduates, with industry-leading remuneration packages and benefits. The Kuwaitization ratio reached 74.0% by December 2019.
Sheikh Ahmad emphasized that supporting green projects is the key to meet our social responsibility goals towards our community. Some of such initiatives include, the Bank lead the consortium of six banks and signed a US $650 million 26-year project loan to finance the construction and operation of the Umm AL Hayman Waste Water Plant. This is a critical infrastructure project that will set the new worldwide benchmark for sustainable water treatment and reuse. The Bank will continue to fund such projects of national and environmental importance. A memorandum of understanding (MoU) was also signed with Zain to get latest cloud solutions, data centre services, and the most advanced security solutions to drive the bank’s digital transformation efforts. Storing digital assets securely and efficiently is becoming a key differentiator and it is important to have a robust systems in place to store, access, retrieve and restore data without straining the environment.
Sheikh Ahmad took the opportunity to thank the Bank’s shareholders, valued customers, staff and regulatory authorities, emphasizing and reassuring that the Bank’s Management will continue to implement all the required policies for safeguarding the interests of all stakeholders.