Al-Tijari declares Operating Profit before Provisions KD 91.5 Million for 2020
Commercial Bank of Kuwait announced an operating profit before provisions of KD 91.5 million for the year 2020 (2019: KD 108.5 million). In line with Bank’s consistent prudent provision policy and proactive assessment of COVID crisis impact, the operating profit was allocated to provisions. The resultant net profit attributable to the shareholders of the bank is zero for the year 2020 (2019: zero). As at the end of the year, total provisions held with the bank amounted to KD 135.7 million (2019: KD 127.3 million) and the bank’s total non-performing loan is zero (2019: zero).
Board of Director has proposed distribution of 3% bonus shares for the year 2020 from the treasury shares held by the bank. The distributions of treasury shares are subject to the approval of shareholders’ general assembly.
Sheikh Ahmad highlighted that according to the World Bank, growth in Kuwait has been tapering since 2019, with performance in 2020 suffering from the twin shocks of COVID-19 and the oil price slump. Adding to the inevitable increase in the fiscal deficit (currently estimating around KD 10 Billion) which is mainly from the decline of oil revenue and spending on mitigating the COVID-19 crisis. Moreover, funding needed for the Future Generations Fund is exacerbating pressure on fiscal buffers (in the absence of a debt law).
Sheikh Ahmad reaffirmed “Al Tijari has always stood strong with Kuwait Government in every step of the relief measures such as a six-month moratorium on individual loans without charging any additional interest or other fees for the deferral period. Similar relief was extended to all corporate customers, with deferred interest and instalments for a period of 4 months, without any additional charges thereon. In benevolent spirit, Al Tijari has further extended the support to ‘the impacted customers’ identified on case to case basis. Al Tijari also contributed to the establishment of a KD 10 million CBK fund to support the State’s efforts to combat the virus”.
Sheikh Ahmad added that during the current pandemic our utmost priority is to ensure well-being of our employees and customers. Bank has deployed all internationally benchmarked protective measures and is rigorously monitoring any breaches. Bank has adopted several health and safety measures, to name a few, enabling employees with protective kits, flexible employee work arrangement, seamless unmanned digital banking etc to reduce crowd at branches.
Sheikh Ahmad pointed out that Bank strived to achieve operational excellence during these difficult times wherein Bank was able to deliver the customer demands through its digital initiatives detailed as follows:
1) Implementation of Smart Teller and Deposit Machines equipped with NFC Card verification etc. transformed the traditional branches into unmanned digital 24/7 functioning branches. It enabled customer to self-serve during these COVID-19 period and consequently helped to reduce crowd at the branch.
2) Enhancement of mobile banking such as mobile onboarding of new customers, loan applications, cheque deposit, KYC update etc.
3) Touchless payment initiatives such as mobile digitalized wallet, payment via wearables like FitBit and Garmin.
4) Digitalization of back-end process to empower paper-less and minimal human interaction environment to ensure safety of employee and our customers. This includes but not limited to virtualization of customer database for online access, digitizing documents and processes, QR Code based employee attendance etc.
The consequences of COVID-19 have impacted adversely on Bank’s performance. Financial highlights of year ended 31 December 2020 are as follows:
- Operating income of KD 131.6 million and operating profit KD 91.5 million, decreased by 17.1% and 15.7% against year ended 31 December 2019 respectively. However cost to income ratio is efficiently maintained at 30.5% as compared to 31.6% of December 2019.
- Customer loans and advances at KD 2,279.1 million, increased by 0.5%, however total assets at KD 4,388.8 million decreased by 9.9%, on year to year basis.
- Robust regulatory ratios, comfortably exceeded the Central Bank’s statutory requirement, Capital Adequacy Ratio 18.4%, Liquidity Coverage Ratio 162.6%, Net Stable Funding Ratio of 107.3% and Leverage ratio of 11.7%
Sheikh Ahmad concludes by thanking all the front-line workers from across all governmental organizations for their exceptional efforts in combating the pandemic, and all the management and staff of the Bank for their dedication and untiring efforts to serve the customers in such an unusual circumstances. Further Sheikh Ahmad wishes health and prosperity to Kuwait and its people.