Group Chief Executive Officer at Kuwait Finance House (KFH), Mazin Saad Al-Nahedh said: “In terms of our strategy, we are focusing on the quality of assets and improving our competencies within the bank, and we have seen a remarkable improvement during the period. The focus moving forward will be with investment in technology and digital transformation of the bank. During the third Quarter, KFH uniquely provided several Artificial Intelligence services. We signed a partnership agreement with Ernst & Young (EY) to launch an ambitious Robotic Process Automation (RPA) program as the first Bank in Kuwait to integrate Artificial Intelligence into operation.

He added during Q3 2018 – KFH earnings webcast: “One of the most important aspects is to focus on human resources and customers by ensuring that our employees are highly committed to the organization, which is reflected in their performance in providing the best services to our customers.

KFH enjoys a leadership position in the Sukuk market and the Islamic financial services in general. The vast experience of KFH Group in the Sukuk issuance has positioned it as a trustworthy and highly recognized organization by major corporates and governments globally. 

He continued: “With regards to our strategy in supporting the national economy and achieving the comprehensive development, the most recent deal was a contract of credit facility with Kuwait Integrated Petroleum Industries Company (KIPIC) where KFH participated in financing the company’s $2.3 billion Liquefied Natural Gas (LNG) import. KFH was selected to lead the deal of the Islamic banks for their share in the $500 million. KFH is currently studying different other projects to finance. Also KFH pays great attention to the small and medium enterprises SMEs. The Bank enjoys great share in financing SMEs as they play a significant role in supporting the youth segment and improving the performance of the entrepreneurs. This contributes in diversifying income resources, creating new jobs while building national expertise in business.”

Shadi Zahran- Group Chief Financial Officer

Meanwhile, Group Chief Financial Officer at KFH, Shadi Zahran said: “The group Net Profit After Tax (NPAT) attributable to Shareholders for the period ended 30th Sep 2018 stood at KD 169.1mn and higher than same period of 2017 by 22.7%, that’s mainly from an increase in net finance income by KD 81.9mn, and partially offset by a decrease in investment income by KD (35.2) mn, and increase in both Operating Expenses and Provisions by KD 8.8 mn and KD 6.1mn respectively.  As we used to do before we will explain each part separately in the coming slides.”

He added KFH-Kuwait, C/I ratio is maintained at 31.1% which is below both the local Islamic Banks average of 38.8% and local conventional Banks average of 34.4% both calculated as per the published financials for H1-18. The average profit earning assets is up by 6.3%, although the total assets / total balance sheet declined by 0.3% illustrating an increase in yielding assets contribution trend. This is also an evidence of efficient balance sheet that focuses on sustainability of earnings and also reflected in the improved Net Financing Income

He explained that the operating profit from banking activities is maintained above 92% of total operating income of the Group and is being maintained as part of overall Group Strategy.

Fahad Al-Mukhaizeem, Group Chief Strategy Officer

Group Chief Strategy Officer at KFH- Fahad Al-Mukhaizeem said “KFH maintains its top position as the most trusted and safest Islamic Bank in the region. We are the first and largest Sharia compliant bank in Kuwait and second largest Islamic Bank in the world by assets.”

He added that most recently KFH won the prestigious award from Global Finance Magazine as the Safest Islamic financial Institution in the GCC -2018, which affirms customers’ confidence in the Bank and KFH’s leading role in the international development of Islamic banking and financial services industry at a global level.

For the key business highlights, Al-Mukhaizeem said “we've launched a variety of products and services especially targeting the Youth segment in Kuwait. Across the FinTech world, our Bank is continuing its efforts in providing a digital experience for our new generation customers, providing them with digital banking platform that is intuitive and simple to use. KFH continues its strong support and sponsorship for its CSR activities.”

On another front, he pointed out that Fitch Ratings recently affirmed Kuwait’s sovereign rating at AA with a stable Outlook as well as affirmed KFH rating at A+ with a stable outlook.

Q&As

Al-Nahedh answered a question about the merger saying “Regarding the topic of the potential Merger with AUB, we have disclosed to the regulatory authorities and the market the latest developments in this regard and there are no further updates at this time.  All these disclosures were published via the official website of Boursa Kuwait and any new development will be updated as and when it comes available.”

Shadi Zahran answered a question on KFH-Turkey saying “KFH-Turkey is ranked actually at very good position actually we are the 2nd lowest NPL there in Turkey and our NPL increased only by 20 bps during this quarter while other banks increased significantly, so at end it does not have a significant impact on the group cost of risk. So overall, yes it will remain at the current level and will may be improve at group level. As mentioned earlier, the net gain of FCY increased in the third quarter because of the situation increased the volume of trading in FCY. Actually that benefited the profitability of KFH-Turkey.”

The Q3 2018 earnings conference call concluded. It witnessed the participation of attendees from different investment companies, financial analysts, financial institutions, media representatives and others.