Tijari declares net profit of KD 50.4m for 2016

Commercial Bank board recommends 15% cash dividend, 10% bonus shares

Elham Mahfouz

KUWAIT: Commercial Bank of Kuwait announced a net profit of KD 50.4 million a growth of 9.1 percent compared to last year with earnings per share of 33.8fils compared to 30.9 fils for the year 2015. The Board of Directors recommended to the General Assembly cash dividend distribution of 15 fils per share and a bonus issue of 10 shares for each hundred shares, compared to 13 percent cash dividend and 6 percent bonus issue last year.

Commenting on the bank’s financial results, Elham Mahfouz, the Banks’ Chief Executive Officer said Commercial Bank’s total assets reached KD 4,125.3 million at the end of December 2016 compared with KD 4,037.4 million for the year 2015 and operating income increased to KD 101.2 million compared with KD 99.2 million for 2015. Mahfouz added that the bank witnessed a growth in the fee income by 9.3 percent, foreign exchange income by 39.3 percent and in dividend income by 26.4 percent.

Mahfouz explained that the above indicators were underpinned by establishing a solid provisions base against the credit portfolio where such provisions amounted to KD 141.2 million as at the end of the 31st December 2016 and the provision coverage ratio was 1175.8  percent against NPLs. Mahfouz also referred to the other healthy financial indicators where the Banks’ capital adequacy ratio at the end of December 2016 stood at 17.94  percent, the leverage ratio stood at 11.24 percent, liquidity coverage ratio stood at 142 percent and Net Stable Funding Ratio stood at 108.7 percent comfortably exceeding the minimum requirement set by the Central Bank of Kuwait. The Bank continues to demonstrate its cost leadership with operational efficiency, a competitive advantage for the Bank which continues to maintain one of the lowest cost/income ratios among Kuwait banks at 27.9 percent for the year ended 31 December 2016.

Mahfouz hailed the tremendous efforts exerted by the Bank’s different departments and staff members for enhancing the credit & investment portfolio quality which was reflected in the gains generated from these portfolios with the Bank building strong bond portfolio and extending credit lines for projects of national importance. Apart from this, the Bank’s strong financial indicators are  due to its prudent policy to use a portion of the operating profits to build the provisions and aggressive policy on write offs adopted during 2011-2016 to clean the loan portfolio. Mahfouz went on saying that the NPL ratio dropped from 0.90 percent to 0.50  percent, it is much lower than the industry average emphasizing the Bank’s continuous  efforts to recover the previously written off loans where the Bank managed to recover KD 106 million during last four years. She, further, added that the Bank intends to continue its prudent and conservative policy of building the required provisions during 2017 and beyond, in order to meet the challenges of volatile economic and geopolitical situation in the region.

Strategic objectives
Mahfouz further commented that the bank’s strategic objectives to diversify its income sources and mitigation of risks, particularly those related to geographical and sector concentration are being pursued in letters and spirit, indicating that the Bank’s strategy and focus on available growth opportunities will be instrumental to analyze with a fine tooth comb the market conditions and emphasize on core business activities with efficient management of risks and associated returns. She also pointed out that this strategy bore its fruit during 2016 and it is forecast to continue yielding benefits for the Bank in the future.

On the other hand, Mahfouz pointed to the ratings the bank has obtained from the international rating agencies such as Moody’s, Standard & Poor’s and Fitch Ratings noting that the bank’s good performance was recognized by these rating agencies. She further said that the bank has a rich record of social responsibility activities and this was proven in its continued contributions to identify the needs of the community with its diverse segments and to satisfy such needs effectively by sponsoring several social activities and initiatives. These efforts were recognized with the bank receiving a certificate of recognition for the pioneering CSR projects at the level of GCC countries, where the Bank was honored at the sideline of the 33rd session of the Council of Ministers of Labor & Council of Social Affairs of Gulf Cooperation Council (GCC) for Arab States which was recently held in Riyadh.

Mahfouz concluded her statement by extending her appreciation and thanks to the Bank’s shareholders for their support to the Bank, valued customers for choosing Commercial Bank of Kuwait as a source of their banking services, staff members for their loyalty and dedication at work and the regulatory authorities represented in the Central Bank of Kuwait and Kuwait Capital Markets for their sincere efforts in safeguarding the banking sector and financial units, emphasizing that the bank’s management spares no efforts for maintaining and safeguarding the interests of the Bank and its stakeholders.

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