5% growth in financing income, 7% growth in depositors’ accounts in 2017
KUWAIT: Sheikh Mohammed Jarrah Al-Sabah, Chairman of Kuwait International Bank (KIB) announced that the Bank reported a net profit of KD 17.7million for the year ended 31 December 2017.Al-Jarrahstated that the Bank’s improved performance reflected positively on reported core operating income, which increased to KD 64.3 million compared to KD 63.2 million in 2016. Total financing income increased by 5%, or by KD 3.6 million, reaching KD 74.6million compared to KD71 million during 2016. Revenue from fees and commissions increased by 6%, to reach KD 9.3million, as compared to KD 8.8 million in 2016. Investment income significantly increased by 68% to reach KD 4.5 million compared to KD 2.7 million in 2016.
As for dividends, Al-Jarrah stated that KIB’s Board of Directors proposed payment of cash dividends of 10% of the share nominal value (10 fils per share) for 2017, subject to the approval of the Bank’s AGM and regulatory authorities. KIB’s total assets increased by 4% reaching KD 1.9 billion compared to KD 1.8 billion of 2016. This increase is attributable to a growth in the financing portfolio by KD 36million reaching KD 1.3 billion compared to KD 1.27 billion last year achieving 3% growth compared to the previous year. Additionally, the investment portfolio increased by KD 18 million, ie by 14% reaching KD 145.7 million compared to KD 127.8 million in 2016.
Depositors’ accounts rose to KD 1.2 billion compared to KD 1.1 billion by the end of the previous year, an increase of KD 78 million representing a growth of 7%. KIB continued to maintain its excellent performance as the ratio for total provision and collateral coverage was at 193% for the year 2017, where capital adequacy ratio (CAR) reached to 19.05% within the framework of CBK regulations on Basel III, while the financial leverage ratio was 10.92% for the year 2017.
Distributions to depositors’ accounts registered a consistent growth during 2017 whereby the annualized return on Arzaaq Deposit in Kuwaiti Dinars progressively increased to 2.65%, 2.68%, 2.7% and 2.72% during Q1, Q2, Q3 and Q4 2017 respectively. Average annualized rate for 2017 stood at 2.687%. Meanwhile, Al Boushra three-year deposits in Kuwait Dinar were offered annualized return 3.3% in Q4 2017 with an average rate for 2nd half 2017 of 3.275%. Profits were credited to depositors’ accounts upon declaring the financial results.
Furthermore with regards to KIB’s deposit accounts, Al- Jarrah highlighted Al Ithmar Call Account, which combines the benefits of both current and savings accounts offered to corporate customers. Additionally, this unique product offers customers instant access to funds through unlimited withdrawals and provides a chance for businesses to earn profit on the account balance. With no minimum balance requirement and no restrictions on withdrawals and deposits, businesses are able to enjoy greater flexibility, better returns and unrestricted access to funds at the same time with a cheque book option. Overall, Ithmaar Call Account grew by 20% in 2017, with an average annual net return of 1.344% at the end of 2017.
On the other hand, the Saving Investment Account achieved remarkable success in 2017, yielding the highest return in the market, at 1.632% per annum for the fourth quarter of 2017. This account is designed specifically for individuals, and offers the benefits of savings and investment combined into one single account. It can be opened in Kuwaiti Dinar or in any other major foreign currency. Additionally, there is no minimum amount required to open the account and profit distribution takes place on a quarterly basis.
Al-Jarrah stated that KIB’s outstanding performance and robust financial position reflects its strong growth in a number of business areas, as the Bank remains committed to its long-term strategic goal of becoming the ‘Islamic Bank of Choice in Kuwait’. Accordingly, the Bank is set to bring about a number of improvements across its services and products and its digital banking platforms. KIB also aims at further enhancing its internal operations to deliver the best customer banking experience, while also offering more innovative banking solutions that are up to par with best practices and international standards.
Al-Jarrah added: “We at KIB have faced countless challenges in our pursuit of innovative banking products and services that meet the changing needs of our customers; there by ensuring our continued success. Still, we remain relentless, as we aim at increasing our efforts to provide an enhanced digital banking experience that is accessible at any place, whilst also being easy to use. By doing so, we hope to provide the best banking experience for our existing customers, as well as new ones.”
KIB also launched the market’s Visual Interactive Voice Response (VIVR), which enables retail customers to view their accounts and transactions directly on their smartphones, as well as engage with call center advisors providing live support. A new state of the art mobile application was also rolled out for smartphones delivering a significant upgrade in terms of customer experience.
As a testament to KIB’s achievements during 2017, the Bank received a number of prestigious local and international awards and recognitions from various agencies. One of the most notable achievements was receiving the ‘Best Strategic Vision in Banking’ award from the World Union of Arab Bankers (WUAB). KIB also garnered the “Best Change Management – Kuwait” award by The Banker Middle East and the “Best Islamic Bank in Kuwait” award from World Finance for the fourth consecutive year. This year also marked the second year that KIB received the ‘Fastest Growing Islamic Bank MENA 2017’ and the ‘Best Sharia-Compliant Bank MENA 2017’ for the third consecutive year from Capital Finance International (CFI.co). KIB also earned the ‘Excellence in Development of Islamic Banking Services’ award by the Union of Arab Banks (UAB), as well as the inaugural ‘Best Customer Acquisition in GCC’ 2017 award and the “Best Islamic Bank in GCC”2017 award for the second consecutive year, both from World Finance. Additionally, the Bank was recognized by Forbes Middle East as one of the top 50 listed companies in Kuwait in 2017.
In recognition of its achievements in the area of social responsibility, KIB also received the ‘Distinction in Social Responsibility in Islamic Banking 2017’ award by the Regional CSR Network, as well as the “Best CSR in Islamic Banking in Kuwait” award for the year 2017 by CPI Financial (CPI.co), marking the third consecutive time the Bank received this honor. Al-Jarrah concluded by expressing his gratitude towards the Central Bank of Kuwait for its continued support and guidance, as well as the Board of Directors, executive management, employees, and customers for their ongoing support of the Bank.