Gulf Bank K.S.C.P. (“Bank”) announced its financial results for the year ending 2021. The Bank reported a net profit of KD 42 million, an increase of 46% compared to the year 2020. Earnings per share were up 40% to 14 fils and the Board of Directors is recommending a distribution of a cash dividend of 7 fils per share, representing a 50% cash payout ratio, in addition to 5% bonus shares, for shareholders’ approval at the Annual General Meeting to be held in March 2022.

Gulf Bank recorded an operating income of KD 170.1 million for the year 2021, an increase of 7% compared to the year 2020.

The increase in the net profit was mainly driven by a 6% or 7.5 million increase in net interest income, a 13% or 4.2 million improvement in non-interest income, and a decline of 26% or 16.4 million in total provisions.

As for asset quality, the non-performing loans (NPL) ratio stood at 0.9% as of 31 December 2021, lower than the prior year level of 1.1%. Additionally, the Bank continues to have significant non-performing loans coverage ratio of 615% including total provisions and collaterals.

Total credit provisions ended 2021 at KD 300 million whereas IFRS 9 accounting requirements (i.e., ECL or expected credit losses) were KD 189 million. So, the Bank has very healthy excess provisioning level of KD 112 million, above and beyond what is required by the IFRS9 accounting requirements.

Compared to 2020, total assets increased by 7% to KD 6.6 billion, gross loans and advances to customers climbed by 10% to KD 4.8 billion, and shareholders’ equity increased by 5% to reach KD 666.5 million. Customer deposits reached KD 4.3 billion, an increase of 7% compared to the prior year.

The Bank’s regulatory capital ratios remained strong as the Tier 1 ratio of 14.5% was 5.0% above the regulatory minimum of 9.5% and the Capital Adequacy Ratio (CAR) of 16.7% was 5.2% above the regulatory minimum of 11.5%.

Gulf Bank continues to be well recognized in terms of its creditworthiness and financial strength internationally, rated “A” by three leading credit rating agencies.

• Moody’s Investors Service maintained the Long-Term Deposits Rating of “A3” with a “Stable” outlook.
• Fitch Ratings revised the Bank’s Long-term Issuer Default Rating to “A” with a “Stable” outlook.
• Capital Intelligence affirmed Gulf Bank’s Long-term Foreign Currency Rating of “A+” with a “Stable” outlook.

 

Commenting on the results, Mr. Jassim Mustafa Boodai, Gulf Bank’s Chairman said: “Despite a backdrop of a turbulent pandemic year, Gulf Bank weathered the challenges and achieved another year of strong performance and growth. In 2021, we showed an ability to adapt and excel in serving our customers, employees, and communities while positioning the Bank for future success and market leadership.”

Mr. Boodai added: “In addition, we continued to make significant headway and progress towards our 2025 strategy, to consolidate our position as the leading Kuwaiti Bank of the future. We aim to provide customers with simple and innovative services to enable sustainable growth for the Bank and have set the foundation by fostering a performance-driven culture, introducing new technology solutions, and adopting world-class risk management practices.”

Digital Transformation Journey

During these challenging and uncertain times, Gulf Bank remained resilient, reflecting its strength, stability, and its support towards stakeholders. Mr. Tony Daher, CEO of Gulf Bank, commented: “As part of our ongoing digital transformation journey, we are proud to announce that we have successfully accomplished several milestones during 2021. We launched the new MX.3 treasury platform in partnership with Murex for the development and automation of the Bank’s capital markets and treasury business. In addition, we have embedded digital elements into our corporate banking onboarding process, allowing our SME customers to digitally onboard and apply for a range of the Bank’s merchant services, cards and financing solutions.” Mr. Daher added: “We aim to create exceptional engagement across all touch-points throughout the customer journey while maintaining the highest standards of privacy and security. Our customers can now open bank accounts in just under a minute, marking a new era of digital banking services in Kuwait with the simplest and fastest digital onboarding process.”

Sustainability

Sustainability is an important and integral part of Gulf Bank’s strategy. Mr. Daher added: “We believe that integrating sustainability and ESG considerations into our practices and activities will enable us to further strengthen our customer experience, offering sustainable products and services for the market, and positioning us as a key leader of sustainability initiatives amongst local and regional financial institutions. We remain committed towards our stakeholders, community, and the overall Kuwaiti economy.”

Recognition

As a testament for its endeavors to be the leading Kuwaiti Bank of the Future, Gulf Bank was recognized by several prestigious organizations. During 2021, Gulf Bank was privileged to be awarded the ‘Best Innovation in Customer Experience’ award in recognition of its recent transformation journey that has embraced a multi-experience approach, strengthening its market differentiation with enhanced customer and employee experiences. The Bank was also recognized for its creativity and innovation across various fields, including: ‘Best Marketing Manager’, ‘Best Sustainability Initiative’ for the Gulf Bank 642 Marathon, ‘Best National Work’ award for the Bank’s National and Liberation Day advertisement, and ‘Best Direction’ award for Gulf Bank’s flagship product ‘Al Danah millionaire draw’.

Appreciation

Mr. Boodai concluded his remarks by stating: “I would like to thank everyone who contributed to these great results, specifically 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. Last but not least, I want to thank our clients for their loyalty, and reiterate our commitment to offering them the best banking experiences.”