Gulf Bank AGM approves distributing 7% in cash and 5% in bonus shares for 2021 | kuwaittimes

Jassim Mustafa Boodai

Jassim Mustafa Boodai: We have proven our ability to adapt to the challenges of the pandemic and continue to excel

Gulf Bank has returned to distributing 5% bonus shares to shareholders, for the first time since 2014

Future semi-annual distributions are subject to the approval of the General Assembly and the Central Bank of Kuwait

We have amended the Articles of Association and are awaiting the approval of the regulatory authorities to establish an investment arm

We have succeeded in placing the Bank on the right track and are actively moving forward with Gulf Bank's 2025 Strategy

The Bank enjoys prestigious ratings from international agencies, a tribute to its creditworthiness and financial strength

Tony Daher

Tony Daher: We have entered a new era of digital banking services, and our branch network is one of the largest in Kuwait

Total customer loans at Gulf Bank reached an all-time high last year

Non-performing loans decreased to 0.9% - one of the lowest rates in the banking sector

We distributed cash dividends in 2021 for the seventh year in a row, with dividends representing 50% of profits

Capital ratios have maintained their strength and exceeded the regulatory minimums required.

KUWAIT: Gulf Bank concluded its Ordinary Annual General Meeting (AGM) on Tuesday (March 22, 2022) with a 85.5 percent quorum. The Board of Directors recommended the distribution of 7 percent cash dividends and a 5 percent bonus for the financial year ending December 31, 2021, with the general assembly also approving to amend the bank's Articles of Association to allow it to distribute semi-annual profits in the future. In addition, the general assembly approved all of the AGM agenda items discussed.

In his speech to the General Assembly, Gulf Bank's Chairman, Jassim Mustafa Boodai, said, "Despite both global and local economic challenges wrought on by the pandemic, Gulf Bank was able to mark a new year of fantastic achievements. During 2021, we proved our ability to adapt to the challenges of the pandemic, and continued to excel in serving our clients, employees, and community."

Boodai pointed out that the Bank's net profits jumped by 46 percent to KD 42 million in 2021, as earnings per share rose by 40 percent to 14 fils, noting that the bank has also decided to distribute 5 percent bonus shares for the first time since 2014.

He noted that Gulf Bank was keen to comply with the decision enforced by the Central Bank of Kuwait, which allows banks with stable financial conditions to distribute semi-annual profits. Gulf Bank obtained the approval of the extraordinary general assembly to amend the Bank's Articles of Association to allow for semi-annual profit distributions in the future. These distributions require the Central Bank of Kuwait's approval, based on a technical study presented by the Bank on the impact of distributions on financial indicators, and requiring the Bank to pass the same procedures implemented for annual distributions - all with the recommendation of the Board of Directors and the approval of the General Assembly.

An investment company

According to Boodai, the extraordinary general assembly's approval to amend the Articles of Association will also allow the Bank to establish new companies, a necessary move for establishing an investment company to serve as the Bank's investment arm in managing clients' assets. The Bank is also awaiting approval from the regulatory authorities to launch the investment company.

He pointed out that the Board of Directors and the Executive Management succeeded in steering the Bank on the right track, achieving even more successes in implementing the Bank's strategy for the year 2025. Gulf Bank's successes have helped consolidate its leading position as the leading Kuwaiti Bank of the Future, strengthened by its continuous efforts to provide customers with modern, simple and innovative services.

Boodai continued, "In spite of the major changes taking place in the global and local economies, Gulf Bank still enjoys prestigious international ratings for its creditworthiness and financial strength, as it was ranked 'A' by all three major credit rating agencies."

Strength & stability

Following the opening remarks, Tony Daher, CEO of Gulf Bank, added: "Gulf Bank has maintained its strength and steadfastness in the face of multiple challenges, a tribute to the Bank's endurance and commitment to support shareholders, clients and stakeholders during the past few years."

He added: "Earnings per share increased by 40 percent to 14 fils, and a recommendation to distribute cash dividends of 7 fils per share represents a distribution of at least 50 percent for the seventh consecutive year and bonus shares of 5 percent. In addition, total customer loans reached an all-time high in 2021, reaching KD 4.8 billion, an increase of KD 454 million, or 10 percent, compared to the end of 2020. This growth came from the personal banking and corporate banking sectors."

He pointed out that the quality of assets in the Bank has maintained its strength, as the non-performing loans ratio reached 0.9 percent in 2021, an improvement from its decrease of 1.1 percent during the same time period last year. In addition, the Bank holds large provisions with a non-performing loan coverage ratio of 615 percent.

He noted that the minimum regulatory capital limits that were reduced in 2020 remained as they were as of December 31, 2021, which allowed the Bank to obtain additional buffers beyond those limits. Furthermore, the tier 1 capital ratio has a buffer of 5 percent and the capital adequacy ratio has a buffer of 5.2 percent, allowing the Bank to steadily grow its businesses in line with its strategy.

Competitive capabilities

Daher added: "During the year 2021, the bank focused on attracting new customers, a goal that encouraged major asset development as we continued to enhance our digital platforms and increase the Bank's competitive capabilities. We also developed and enhanced our products and services with a primary focus on digital technology."

He continued: "We are proud to have implemented various technological enhancements to our account opening process, as our customers from small and medium-sized enterprises can now open accounts and apply for a range of services, cards and financing solutions all online. What's more - our digital transformation strategy has helped equip companies with the tools needed to compete in a rapidly changing economy and keep pace with the latest technological developments."

Digital transformation

Regarding Gulf Bank's ongoing digital transformation plan, Daher noted, "During 2021, we announced the launch of our new treasury system in partnership with Murex, an initiative we spearheaded with the aim of developing and automating our treasury platforms and catering to today's financial markets. Implementing this platform has been a transformative step for developing and automating treasury and financial market management systems at the Bank, and has paved the way for mutual interaction in addressing legal developments, leading capital markets, and better serving our customers. In the long run, the new system will contribute to enhancing efficiency and control of all aspects of the business."

He added, "During 2021, we also launched three unique credit cards in partnership with MasterCard and as part of our strategy to provide quality products and services tailored to targeted customer segments. To enhance the lives of our female customers, we launched the Rose Gold credit card with special benefits, exclusive discounts and the highest rewards for women in Kuwait. For our Youth Red account, we launched the 'red plus' card, a free prepaid card with multiple benefits that enable youth to enjoy the highest cashback and discounts at multiple restaurants and shops in the country. In addition, we also launched the MOUJ credit card, the first prepaid card with a cashback feature in Kuwait."

A new era

Gulf Bank continues to invest heavily in providing clients with an exceptional customer experience. Daher noted that customers can now open bank accounts in less than a minute, marking the fastest and simplest process to open bank accounts in Kuwait, and ushering in a new era of digital banking services. The Bank also continues to invest in its digital capabilities to create exceptional engagement with its customer base across all means of communication - all while maintaining the strictest standards of security and privacy.

Daher pointed out that the Bank announced a significant change to the Al-Danah account's draw framework at the beginning of 2021. In addition to offering a grand prize of KD 1.5 million dinars, Gulf Bank also increased its semi-annual draw prize to KD 1 million, rendering the Al-Danah account one of the most profitable savings accounts of the year.

He noted that the Bank's branch network is also among the largest in Kuwait, now spanning 53 branches after its latest opening in Kuwait International Airport. Daher continued, "We will continue to work to achieve our goal of widening the Bank's network of branches in parallel with our digital transformation strategy, and in line with the Bank's 2025 strategy and the national development plan, Kuwait Vision 2035 'New Kuwait.'"

Prestigious ratings

Moody's maintained the Bank's long-term rating at "A3" with a "Stable" outlook. Capital Intelligence affirmed Gulf Bank's long-term foreign exchange rating at "A+" with a "Stable" outlook. In early 2022, Fitch revised the Bank's long-term issuer rating to "A" with a "Stable" outlook. Standard & Poor's global rating agency has revised the Bank's issuer rating from "A-" to "BBB+" and revised the outlook from "Negative" to "Stable." Both Fitch and Standard & Poor's revised ratings came as a result of Kuwait's downgraded sovereign rating, and were unrelated to Gulf Bank's position and credit quality.

Gulf Bank's 2025 Strategy: 3 Keys to Success

Jassim Mustafa Boodai continued, "To ensure the continued success of the 2025 strategy, Gulf Bank has laid the foundations that contribute to developing a culture based on quality performance, providing innovative and technical solutions, and adopting global practices for risk management - all through our core values that are based on the following:

The determination to provide the best services and simplest solutions to our clients

The encouragement of our employees to pursue excellence in customer service

The provision of an enjoyable banking experience through simple, effective and advanced solutions."

Thanks and appreciation

Boodai concluded, "On behalf of the Board of Directors, I would like to extend my sincere thanks and appreciation to His Highness the Amir, Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, and His Highness the Crown Prince, Sheikh Mishaal Al-Ahmad Al-Jaber Al-Sabah for their vision and wise leadership.

"I would also like to extend my thanks and appreciation to the Central Bank of Kuwait and the Capital Markets Authority for their efforts and continuous support of the Kuwaiti banking sector. I would also like to express my deepest appreciation to all our valued clients, partners and shareholders for their support throughout 2021, and to the members of the Board of Directors, senior management and employees for their valuable contributions as the Bank continues to pave its pathway to success."