KUWAIT: Gulf Bank K.S.C.P. announced its financial results for the first nine months ending 30 September 2023. The bank reported a net profit of KD 53.8 million, an increase of KD 8.1 million or 18 percent compared to 2022 first nine months net profit of KD 45.7 million.

The increase in the bank’s net profit was mainly driven by a 7 percent or KD 7.3 million increase in net interest income for the first nine months of 2023. As a result, operating income grew by 6 percent or KD 7.8 million to reach KD 140.1 million and operating profit grew by 8 percent to reach KD 75.2 million for the same period.

Subsequently, the bank’s return on assets improved from 0.9 percent in the first nine months of 2022 to 1.0 percent for the same period of 2023 and return on equity grew from 9.0 percent to 10.0 percent. For the third quarter of 2023, the bank reported a net profit of KD 18.0 million, an increase of 17 percent over the third quarter of 2022. Operating income for the third quarter of 2023 was KD 47.9 million, an increase of 2 percent compared to the same period of last year and operating profit was KD 25.9 million, with an increase of 2 percent over the same period of last year.

As for asset quality, the non-performing loans (NPL) ratio stood at 1.2 percent as of 30 September 2023, similar to the prior year. Additionally, the Bank continues to have significant non-performing loans coverage ratio of 470 percent including total provisions and collaterals.

Total credit provisions as of 30 September 2023 reached KD 311 million whereas IFRS9 accounting requirements (i.e., ECL or expected credit losses) were KD 190 million. As a result, the bank has very healthy excess provision level of KD 120million, which is above what is required by the IFRS9 accounting requirements. As of 30 September 2023, total assets stood at KD 7.0 billion while net loans and advances reached KD 5.2 billion. Shareholders’ equity reached KD 740 million and total deposits stood at KD 5.1 billion for the same period.

The bank’s regulatory Tier 1 ratio as of 30 September 2023 was 13.6 percent which is above the regulatory minimum of 12 percent while the Capital Adequacy Ratio (CAR) was 15.8 percent, which is above the regulatory minimum of 14 percent.

Strong performance

Commenting on the first nine months of 2023 financial results, Gulf Bank’s Chairman Jassim Mustafa Boodai said: “We are very pleased with our third-quarter results, which showcase our continuous strong performance. These results demonstrate solid progress against our strategy and reinforce the bank position as one of the leading Kuwaiti financial institutions.”

Enhanced customer experience

One of Gulf Bank key milestones during the third quarter of 2023 was the launch of the newest version of the bank’s mobile application. The new version of the app incorporates advanced security features to safeguard customer data and financial transactions while providing a seamless user experience. It also includes many features and services, available through a smart user interface, which are designed to meet customer requirements. It is worth mentioning that currently 90 percent of Gulf Bank transactions take place through electronic channels in line with the overall digital transformation strategy of the bank.

Community support and youth programs

Gulf Bank continues its commitment to support community by launching data science and innovation programs aimed at empowering the youth. Internally, the Bank launched the ninth edition of its AJYAL program a dedicated development program to enhance employees’ skills and capabilities in accordance with the highest international banking standards. This program demonstrates Gulf Bank’s dedication to hosting a thriving work environment and supporting employees in reaching their full potential.

Recognition of credit worthiness

Gulf Bank’s creditworthiness and financial strength is recognized internationally. During the year 2023, Capital Intelligence affirmed the bank’s Long-Term Foreign Currency Rating at ‘A+’ with a Stable Outlook. In addition, Capital Intelligence has affirmed the bank’s KD 50 million Basel III-compliant Tier 2 Subordinated Bonds at “BBB+” with a “Stable” Outlook. Furthermore, Fitch Ratings has assigned Gulf Bank a Long-Term Issuer Default Rating of ‘A’ with a ‘Stable’ Outlook, and Moody’s Investor Services has assigned the Bank a Long-Term Deposits rating of ‘A3’ with a ‘Stable’ Outlook.

These ratings are a testament to Gulf Bank’s solid financial performance, experienced management, and ability to navigate the global and local banking landscape successfully.

Acknowledgements

Boodai concluded his remarks by stating: “Gulf Bank remains dedicated to its long-term vision of delivering sustainable growth, enhancing our competitive position and generating superior shareholder returns.” He added: “On behalf of the Board of Directors, I would like to thank our shareholders for their ongoing trust, and our employees for their commitment and dedication. I would also like to thank the Central Bank of Kuwait for their continuous support. Finally, I want to thank our clients for their loyalty, and reiterate our commitment to offering them the best banking experience.”

Key positive indicators

• Nine months 2023 net profit of KD 53.8 million, an increase of 18 percent compared to the same period of 2022.

• For the third quarter of 2023, the bank reported a net profit of KD 18.0 million, an increase of 17 percent over the third quarter of 2022.

• Return on assets improved in the first nine months 2023 to reach1.0 percent and return on equity grew to reach 10.0 percent.

• Non-performing loan ratio stood at 1.2 percent as of 30 September 2023, with a strong non-performing loan coverage ratio of 470 percent.

• Capital ratios as of 30 September 2023, Tier 1 ratio was 13.6 percent and Capital Adequacy Ratio was 15.8 percent.

Capital increase and future growth opportunities

During the third quarter, Gulf Bank obtained the Central Bank of Kuwait and Capital Market Authority approvals to increase the Bank’s issued and paid-up capital. Gulf Bank will have a public offering with rights issue of 260,869,565 new shares at a nominal value of 100 fils in addition to a share premium of 130 fils for each share. The total proceeds will result in an increase in the Bank’s capital base by about KD 60 million. The opening date of subscription period will start on 29th of October 2023 and ends on 12th of November 2023.

Boodai commented: “The rights issue will boost the Bank’s Capital Base and Regulatory Capital Adequacy Ratios, enhancing the bank’s ability to pursue future growth opportunities in line with its strategy, aiming to generate a strong and sustainable long-term value to all our stakeholders.”

Jassim Mustafa Boodai:

• The third-quarter results demonstrate solid progress against our strategy and strengthen the Bank’s position as one of the leading Kuwaiti financial institutions.

• For the third quarter of 2023, the bank reported a net profit of KD 18.0 million, an increase of 17 percent over the third quarter of 2022.

• The announced rights issue will boost Gulf Bank’s capital base and help pursue future growth opportunities in line with its strategy.

• Gulf Bank remains dedicated to its long-term vision of delivering sustainable growth, enhancing our competitive position, and generating superior shareholder returns.

• 90 percent of Gulf Bank transactions are through electronic channels, in line with the overall digital transformation strategy of the Bank.