Chairman Mahmoud Yousef Al-Fulaij’s message
KUWAIT: By the Grace of Allah, the Almighty, Boubyan Bank has successfully achieved a commendable performance and remarkable financial results during 2017 in line with the business plans and the strategic vision of the Bank, along with maintaining the leadership position in innovative technology banking products and services in the Kuwaiti market.
On behalf of the Board of Directors and the Executive Management of the Bank, I am pleased to present the Annual Report of 2017, which includes the financial statements and a summary of the Bank’s activities during the year, including achievements and successes at various levels.
Boubyan Bank maintained the growth momentum in earnings, with a net profit growth at a rate of 16 percent in 2017. The net profit of the Bank amounted to KD 47.6 million compared to KD 41.1 million in 2016, with earnings per share of 18.71 fils compared to 16.94 fils for the previous year.
It is worth mentioning that the growth in profitability of the Bank is mainly attributed to the success bestowed by Allah, the Almighty, upon us as well as the confidence of the shareholders and customers in the Bank, and the efforts exerted by the employees and their unwavering dedication and keenness on delivering the highest service levels to customers. This success is driven as well by the innovation and creativity, which have been adopted by the Bank since launching the first 5-year strategy in 2010, and continuing the same strategy as a part of the second 5-year strategy of 2020.
Most of the Bank’s indicators witnessed a remarkable growth during 2017 where the total assets increased to approximately KD 4 billion at a growth rate of 14 percent while the operational revenues increased to reach KD 125.6 million with a growth rate of 22 percent in addition to the increase in deposits of customers by 15 percent to reach KD 3.4 billion.
Furthermore, the total equity of the Bank increased to KD 375 million from KD 345 million last year; and there was an increase in the financing portfolio to reach KD 2.9 billion at a growth rate of 14 percent in line with the steady growth of the customer base of the Bank.
Based on the financial performance of the year ended December 31, 2017, the Board of Directors proposed the distribution of cash dividends of 7 percent per nominal share value (7 fils per share) and 5 percent in bonus shares (5 shares for each 100 shares). Furthermore, the Board of Directors proposed a board remuneration of KD 360 thousands for 2017 similar to the previous year.
With regard to the market share, our share in local finance increased to reach approximately 7.9 percent compared to 7.2 percent for the previous year, while the share of the retail finance increased to reach more than 10.5 percent.
Innovative Technology Services and Products
Since creativity and innovation are primary pillars in Boubyan’s business model, we focused in 2017 on banking innovation by providing the customers with new and unique digital banking services to facilitate their life and offering them with alternative channels that are available 24/7 to meet their banking needs.
Accordingly, Boubyan Bank introduced in 2017 a set of innovative digital and electronic products and services for the first time in the Kuwaiti market, such as UTap service, ATM card issuing service, and Murabaha Digital service.
As a leading initiative, Boubyan Bank established a Digital Innovation Center to support the implementation of agile methodology to provide innovative leading technology services. The Center augments transforming the vivid innovative concepts in the pipeline into reality and success stories.
This strategy has crowned the Bank with many achievements such as being “The Global Winner” of the “World’s Best Islamic Digital Bank” Award for the third year in a row in the field of e-banking “digital” services from Global Finance for the year 2017.
Best Customer Experience Retail Banking
In addition to leading innovative banking products and services in the local market, Boubyan Bank focused on the customer experience and customer centric by continuously upgrading the level of services offered to the customers and unifying all the communication with the customers through all the channels.
Hence, we managed to stay as the best bank in Kuwait Banking Industry in the field of customer services. This is evidenced by the recent accomplishments, whereby the Bank won from the Service Hero the award for the “Best Islamic Bank in Service Level Across Kuwait” for 7 years in a row and the award for the “Best Service Level in Kuwait Among All the Business Segments” in 2017. Such awards reiterate our Bank’s superb competitive abilities to provide customers with the highest level of services and the best products in the Kuwaiti market.
Furthermore, Boubyan Bank was keen to launch new products such as the “Graduation Account” designed especially to encourage customers to save money for their children education in an innovative and unique way in cooperation with Boubyan Takaful. We targeted as well the salary mass segment by developing a special package offering the customers with customized benefits and features, which suit their various needs and life styles.
Boubyan Bank successfully achieved a milestone of its geographical expansion by having 40 branches, where we opened three new branches during 2017. In conjunction, the Bank expanded the network of Boubyan Direct by having 23 machines spread all over Kuwait.
Distinguished Corporate Banking Services
Boubyan Bank is aspiring to be “the First Choice and the Preferred Bank for Corporate Banking”. Hence, we succeeded in launching remarkable and innovative e-products and services, which we introduced for the first time to the local corporate sector in response to the Bank’s aspiration to meet all the banking needs and requirements in line with the principles of the Noble Islamic Sharia. We have accelerated the technological developments in this regard in 2017, as reflected in the Corporate Online Banking and Corporate Mobile Application.
The Corporate Banking Group enjoys strong relationships with a number of active national companies while targeting performing businesses in various productive economic sectors in order to provide the best banking services. The corporate structured finance team had splendidly succeeded during the year as Initial Mandate Lead Arranger and Book Runner on several high profile Islamic deals in the region.
The Corporate Banking Group managed to achieve remarkable growth in its credit portfolio, with a growth rate of 16.3 percent during 2017. We have achieved this growth by attracting a number of companies known for their financial and economic creditworthiness, without compromising the highest credit quality standards and at the same time reviewing and diversifying risks. It is worth mentioning that the growth achieved during 2017 was made through diversifying the financing to various economic sectors, while giving a preference to the aviation, oil, education, and other services; and maintaining the quality of assets as per the best banking risk management practices.
Young and Ambitious Human Resources
Boubyan Bank gives a special attention to its human resources as a part of the Bank’s strategy for being a modern bank, which keeps up with international and regional developments through our young management team. The Bank is differentiated for entrusting the youths with more leading roles, especially that all training and academic facilities and capabilities are available to provide them with a unique opportunity to gain professional and practical expertise, which would boost their experiences at a young age. Boubyan Bank has succeeded over the past years in creating many job opportunities for ambitious Kuwaiti youths by expanding its services and branches.
This made our Bank an attractive choice to the Kuwaiti youths who are interested in working for the private sector in general, and the banking industry in specific, due to the environment of creativity and innovation prevalent at the Bank, which unleashes the youths’ energy and ambitions.
Accordingly, the Bank managed to increase the ratio of national manpower to 77 percent. This percentage is not only considered as the highest amongst Kuwaiti banks, but also in the Kuwaiti private sector. The Bank continues to be a role model to follow in the field of recruiting domestic manpower and creating distinctive job opportunities in the region.
Effective Social Responsibility
The social responsibility is the cornerstone of the Bank’s dealings with all groups of the society in contribution to development, and to building a society which is able to keep pace with all regional and international changes. Therefore, the Bank took the lead in launching a variety of social initiatives and sponsoring many activities and events targeting various groups of the society.
The Bank’s social responsibility emanates from the fact that it is a bank operating in compliance with the principles of the Noble Islamic sharia, and based on the spirit of Islam that enjoins cooperation, selflessness and helping various groups of the society, especially those in need or not able to afford the basic needs of life.
The Bank continued its interaction with various segments of the society, especially the youth, who received support from the bank at various levels and in different domains. There were more than 100 events and activities organized or sponsored by the Bank’s departments in addition to the effective role played by the Bank’s branches in providing services to their neighborhoods and interacting with various sectors.
Boubyan Bank is committed to following a sound and effective governance framework by adopting the best sound governance and risk management standards. The Bank complies with these standards in concluding all transactions according to the principles and rulings of the Islamic sharia. Boubyan Bank continuously updates its governance structure in a manner that meets the requirements of the Central Bank of Kuwait, and the banking industry-specific governance procedures. This included compliance with the recent sharia governance requirements of the Central Bank of Kuwait.
Without doubt, the acquisition of the National Bank of Kuwait of a significant stake in the Bank’s in 2009, along with all its long-established expertise and deeply-rooted history, played a major role in supporting the Bank’s strategy and the entry and expansion in the Kuwaiti market without compromising the Bank’s crystal-clear Islamic identity. This is being achieved while maintaining full operational segregation between both banks in order to comply with the principles and rulings of the Noble Islamic Sharia and, thus, enhancing the sound governance environment at Boubyan Bank.
Finally, for myself and on behalf of all Boubyan Bank’s employees, I would like to take this opportunity to express deepest thanks, and appreciation to His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, may Allah protect him as well as to HH the Crown Prince, Sheikh Nawwaf Al-Ahmad Al-Jaber Al-Sabah, and HH the Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah, may Allah protect them all.
Moreover, I would like to express the deepest thanks to the executives of the Central Bank of Kuwait, headed by the Governor Dr Mohammed Al-Hashel, who spared no effort to take the actions deemed appropriate to develop and safeguard the Kuwaiti banking system.
I would also like to express deepest thanks to all the Bank’s esteemed shareholders and customers who have always been the key factor behind our success for their support to confront the challenges. My deepest thanks are also extended to all members of the Bank’s Fatwa and sharia supervisory Board, headed by Sheikh Dr Abdulaziz Khalifa Al-Qasar, for their great efforts in guiding the Bank’s Islamic activities, services and dealings.
Finally, I would like to extend deepest appreciation to all Boubyan Bank’s management and employees and thank them for their dedication as they spared no effort all through the past years, and I am pleased to express my appreciation of their constant adherence to the one-team spirit, to realize more success for our promising Bank. I hope that the coming years will be a new stage driving the Bank towards an unprecedented development leading it to more achievements and realization of objectives that place it among the leading Islamic banks in the region.
Peace be with you!
Mahmoud Yousef Al-Fulaij