an increase of 26% compared to prior year

Jassim Boodai:

• Our asset quality profile and solid balance sheet fundamentals positions us very well to achieve our strategic aspirations.
• The Bank enjoys a strong financial position that enables us to deliver sustainable returns for our shareholders while supporting the future growth of the Bank.

Tony Daher:

• Gulf Bank is well recognized in terms of its creditworthiness and financial strength internationally.
• We are delivering a strong financial performance while making significant progress towards our vision of becoming the Bank of the Future

Kuwait, 26 April 2022: Gulf Bank K.S.C.P. (“Bank”) announced its financial results for the first quarter ending 31 March 2022. The Bank reported a net profit of KD 15 million, an increase of KD 3.1 million or 26% compared to 2021 first quarter net profit of KD 12 million.

Subsequently, the Bank’s return on assets improved from 0.8% in the first quarter of 2021 to 0.9% in first quarter of 2022 and return on equity grew from 7.6% to 9.2%.

Gulf Bank recorded an operating income of KD 41.5 million for the first quarter 2022, and an operating profit before provisions of KD 21.7 million for the same period.

The increase in the net profit was mainly driven by a 4% or KD 0.4 million increase in non-interest income, a decline of (3%) or KD 0.7 million in operating expense, and a decline of 30% or KD 2.6 million in total provisions.

As for asset quality, the non-performing loans (NPL) ratio stood at 1.0% as of 31 March 2022, lower than the prior year level of 1.5%. Additionally, the Bank continues to have significant non-performing loans coverage ratio of 548% including total provisions and collaterals.

Total credit provisions as of 31 March 2022 reached KD 296 million whereas IFRS 9 accounting requirements (i.e., ECL or expected credit losses) were KD 180 million. As a result, the Bank has very healthy excess provisioning level of KD 116 million, above and beyond what is required by the IFRS9 accounting requirements.

Compared to first quarter 2021, total assets increased by 4% to KD 6.5 billion, gross loans and advances to customers climbed by 7% to KD 4.8 billion, and shareholders’ equity increased by 4% to reach KD 662.2 million. Customer deposits reached KD 4.3 billion, an increase of 2% compared to the prior year.

The Bank’s regulatory capital ratios remained strong as the Tier 1 ratio of 14.1% was 3.6% above the regulatory minimum of 10.5% and the Capital Adequacy Ratio (CAR) of 16.3% was 3.8% above the regulatory minimum of 12.5%. Worth noting that the capital ratios regulatory minimum has been partially restored in comparison to 2021 and will be in place during the year 2022 as instructed by the Central Bank of Kuwait.

Future Growth

Commenting on the results, Mr. Jassim Mustafa Boodai, Gulf Bank’s Chairman said: “Building on the positive momentum generated last year, I am pleased to announce that Gulf Bank has started 2022 strong, with an increase of 26% in net profit during the first quarter compared to the same period last year. Our asset quality profile and solid balance sheet fundamentals positions us very well to achieve our strategic aspirations. We continue to enjoy a strong financial position that enables us to deliver sustainable returns for our shareholders while supporting the future growth of the Bank.” Boodai added.

Mr. Boodai concluded his remarks by stating: “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. Last but not least, I want to thank our clients for their loyalty, and reiterate our commitment to offering them the best banking experiences.”

Viability Upgrade

Gulf Bank continues to be well recognized in terms of its creditworthiness and financial strength internationally. During the first quarter of the year, Fitch Ratings has upgraded Gulf Bank’s Viability Rating to 'bbb-' from 'bb+' and affirmed the bank’s Long-Term Issuer Default Rating at 'A' with a Stable Outlook.

Commenting on Fitch’s credit rating announcement, Mr. Tony Daher, Gulf Bank’s Chief Executive Officer said: “The upgrade of Gulf Bank’s Viability Rating and the affirmation of its Long-term Issuer Default Rating at ‘A’ with ‘Stable’ outlook by Fitch Ratings is a testament on the Bank’s leading market position strong balance sheet, and earnings momentum, both of which supported the implementation of our strategy that is based on domestic organic growth and digital transformation.”

In addition to Fitch Ratings’ recent Viability Rating upgrade and affirmation of its Long-Term Issuer Default Rating at 'A' with a ‘Stable’ Outlook, Gulf Bank has a Long-term Foreign Currency Rating of ‘A+’ with a ‘Stable’ Outlook by Capital Intelligence Ratings and a Long-Term Deposits rating of ‘A3’ with a ‘Stable’ Outlook by Moody’s Investor Services.

Strategic Milestones

During the quarter, Gulf Bank continued achieving notable milestones of its 2025 digital transformation strategy. Mr. Daher commented: “We continue to support the momentum of this dynamic transformation, delivering a strong financial performance while making significant progress towards our vision of becoming the Bank of the Future.” Mr. Daher continued: “As part of our ongoing digital transformation journey, we are proud to announce that we have successfully launched our new mobile application that provides fast, easy and safe customer experience. The new app features a friendly interface and new features such as ‘Pay link’ with a bill split option. In addition to launching phase I of our upgraded contact center towards the end of 2021, we aim to move forward with completing Phase II of the upgrade during this year.”

Recognition

In recognition of its role to deliver seamless, secure, and convenient payments, Gulf Bank was awarded with “Most Rewarding Prepaid Card” by Mastercard for its Mastercard “MOUJ” Cashback Prepaid Card during the first quarter of 2022. The Bank had launched the “MOUJ” Cashback Prepaid Card in partnership with Mastercard back in 2021.

Sustainability

On the ESG front, Gulf Bank remains committed towards building the blocks of its sustainability journey. In addition to the major step taken by the Bank towards gender parity in employee’s benefits, Gulf Bank continues to fulfil its social responsibilities towards the youth through its strategic partnership with “Injaz”, the non-for-profit organization that supports and educates the next generation of young entrepreneurs. The Bank sponsored and volunteered in training high school and university students through various training programs.

Gulf Bank has also participated in the ‘Environment Month 2022’, an annual environmental initiative organized by The Scientific Center. This year’s theme was “Investing in Our Planet” which included a number of initiatives related to health, water and marine resources. The initiative supports Goal 14 of the UN Sustainable Development Goals related to conserving and sustainability using the oceans, seas, and marine resources for sustainable development.